Title
Ordinance - An Ordinance of the City of Mansfield, Texas, Authorizing the Issuance and Sale of City of Mansfield, Texas Waterworks and Sewer Revenue Refunding Bonds, Series 2015; Providing for the Security and Payment of Said Bonds; Prescribing Form of Said Bonds; Approving Execution and Delivery of an Escrow Agreement and a Bond Purchase Agreement; Approving the Official Statement; Approving an Engagement Letter; and Enacting Other Provisions Relating Thereto
Requested Action
Approve the Sale of Bonds to Refund existing Bonds for the sole purpose of saving money.
Recommendation
Approve the Sale of Bonds to Refund existing Bonds for the sole purpose of saving money.
Description/History
The City of Mansfield, Texas is responsible for managing the City’s Municipal Water & Sewer System within the City of Mansfield, Texas. The City Water & Sewer System is funded by Ordinance as defined by the City Council of the City of Mansfield, Texas.
The City’s Water and Wastewater System have several issuances outstanding. The issuances that are recommended for refunding are Series 2004, 2004A and Series 2007. The combined amount being refunded is $9,875,000.
Interest rates in the Municipal Bond Market have been fairly low over the past two years and because of these low rates the City is able to issue new bonds to refund older bonds that have higher interest rates. This allows the City of Mansfield, Texas to reduce the annual principal and interest payments of the older bonds to the new principal and interest payments of the new bonds which ultimately reduces the interest cost of the City compared to the payments of the older bonds. In this particular Refunding or Refinancing the expected average annual savings is $48,175.20 over the remaining life of the bonds. Moreover the total expected savings before final pricing or sale of the new bonds is $541,960.09. These savings are preliminary estimates and could change based on actual sale results on the day of...
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