HomeMy WebLinkAboutRes 2024-06-1637 Direct Publication of Notice of Intention to Issue up to $25,000,000 in Combination Tax & Revenue Certificates of Obligation Series 2024EXHIBIT A
CITY OF ANNA, TEXAS
NOTICE OF INTENTION TO ISSUE COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION
NOTICE IS HEREBY GIVEN that the City Council of the City of Anna, Texas, at its meeting to
commence at 6:00 P.M. on August 13, 2024, at the Anna Municipal Complex – Council Chambers,
120 W. 7th Street, Anna, Texas, tentatively proposes to adopt an ordinance authorizing the
issuance of interest bearing certificates of obligation, in one or more series, in an amount not to
exceed $25,000,000 for paying all or a portion of the City’s contractual obligations incurred in
connection with (i) acquiring and equipping fire trucks for the Anna Fire Department; (ii) acquiring
land sites for future municipal buildings, including a police station and administrative office
buildings housing the public works department; (iii) acquiring, constructing, installing, and
equipping additions, improvements, extensions, and equipment for the City’s sewer system,
including wastewater interceptor line to new wastewater treatment plant, related infrastructure
improvements, and the acquisition of land and interests in land as necessary therefor; and (iv) legal,
fiscal and engineering fees in connection with such projects. The ordinance may authorize an
authorized officer of the City to effect the sale and delivery of the certificates of obligation on a
date subsequent to the adoption of the ordinance. The maximum interest rate for the certificates
may not exceed the maximum legal interest rate. The maximum maturity date for the certificates
is February 15, 2049. The estimated combined principal and interest required to pay the
certificates to be authorized on time and in full is $41,071,557. The current principal of all
outstanding debt obligations of the City is $160,695,000. The current combined principal and
interest required to pay all outstanding debt obligations of the City on time and in full is
$250,507,389. The City proposes to provide for the payment of such certificates of obligation
from the levy and collection of ad valorem taxes in the City as provided by law and from a pledge
of certain surplus revenues of the City’s waterworks and sewer system, remaining after payment
of all operation and maintenance expenses thereof, and all debt service, reserve, and other
requirements in connection with all of the City's revenue bonds or other obligations (now or
hereafter outstanding), which are payable from all or any part of the net revenues of the City's
waterworks and sewer system. The certificates of obligation are to be issued, and this notice is
given, under and pursuant to the provisions of V.T.C.A., Local Government Code, Subchapter C
of Chapter 271.
CITY OF ANNA, TEXAS
Memorandum
Memorandum No: 24-120
Date: June 4, 2024
To: Honorable Mayor and City Council
From: Ryan Henderson, City Manager
Re: Combination Tax and Revenue Certificates of Obligation, Series 2024
_____________________________________________________________________________________
At the June 11, 2024 City Council meeting, our financial advisors, Hilltop Securities, will present a Plan of
Finance for the issuance of approximately $25,000,000 Combination Tax and Revenue Certificates of
Obligation.
Anna continues to see our needs for City facilities expand as we continue to grow. One means of financing
large capital projects is through the use of municipal debt. Bonds are the most common type of municipal
debt. In the City of Anna, debt is used to fund roads, facilities, parks, equipment and water and sewer
infrastructure.
Municipalities use debt to:
• Ensuring future beneficiaries pay their “fair share” for public improvements and services; debt is
repaid over time by neighbors who are using the debt-financed asset.
• Financing larger projects on a more timely basis as compared to pay-as-you-go funding.
• Helping minimize the impact on property tax and/or user rates as compared to pay-as-you-go
funding.
• Taking advantage of tax-exempt, low-cost, long-term financing.
The City of Anna does not use debt to finance its operating expenses. The City’s charter and state law
requires the City to maintain a balanced budget. Anna does NOT operate at a deficit like the federal
government. Additionally, all debt obligations must be approved by the City Council and the Texas
Attorney General.
Texas state law generally requires local governments to seek voters’ approval before issuing debt that will
be repaid from tax revenues. One common form of borrowing, however, represents an exception to this
rule: certificates of obligation (COs). COs provide local governments with important flexibility when they
need to finance projects quickly. COs can be particularly attractive when a local government wishes to,
for example, take quick advantage of lower interest rates, purchase a newly available property, or
maintain a level property tax rate. CO bonds afford local officials flexibility in responding to critical and
emerging public needs, allowing them to act without having to wait for or pay for an election. As Anna
continues to grow rapidly, this flexibility will help to build expanded facilities and acquire critical public
safety equipment.
General Obligation Bonds Certificates of Obligation
Public Approval / Notice
Requirements Bond election Notice of Intent to Issue published
in local paper
Security / Pledge Taxes only Taxes and/or revenues
Other Considerations Long timeline to issue Subject to petition by 5% of
registered voters
Municipal tax rates are divided into two components:
• Interest and Sinking (I&S) which can only be used to pay the City’s annual bonded debt
payments.
• Maintenance and Operations (M&O) which is used for the operating expenses of the City.
Each year the Collin Central Appraisal District determines the market value of all taxable property in Collin
County, Texas. Based on the current year’s values, each taxing unit must decide how much property tax
revenue is necessary to fund its budget and what tax rate produces that amount. It must also determine
the tax rate it needs to pay its long-term debt. As the appraised value grows, the tax rate required to pay
the City’s annual bonded debt payments decreases. Because of Anna’s rapid appraised value growth, each
year the City has additional debt capacity to meet the City’s needs while maintaining a level tax rate.
The issuance of these Combination Tax and Revenue Certificates of Obligation will fund the following
projects:
• $1,500,000 for fire apparatus.
• $10,000,000 for land for a future police station and/or administrative office building.
• $12,000,000 for a wastewater interceptor line to the new Hurricane Creek Wastewater
Treatment Plant.
The action required at the June 11 City Council meeting will be to direct staff and our financial advisors to
implement the Plan of Finance and approve a resolution authorizing publication of a Notice of Intent to
issue Certificates of Obligation.
c: Terri Doby, Budget Manager
Taylor Lough, Assistant City Manager
Greg Peters, Assistant City Manager
Management Team
Jun-24 Jul-24 Aug-24 Sep-24
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HOLIDAY HOLIDAY HOLIDAY HOLIDAY
Regular Scheduled City Council Meeting
Presentation of Plan of Finance to City Council
City Council directs staff and consultants to implement Plan of Finance
City Council approves a Resolution authorizing publication of a Notice of Intent to issue Certificates of Obligation
First Publication of Notice of Intent to issue the Certificates of Obligation, Series 2024 (must be no later than June 28, 2024)
Publication of Notice of Intent on City's website (Notice to be on Citys website continuously until the Ordinance is adopted)
Second Publication of Notice of Intent to issue the Certificates of Obligation, Series 2024 (must be 7 days after first publication)
1st draft of POS and NOS sent out for comments
Deadline to provide comments to 1st draft of POS and NOS
Distribution of 2nd draft POS and NOS and to Rating Agency
Deadline to provide comments to 2nd draft of POS and NOS .
Distribution of 3rd draft POS and NOS for final comments
Credit rating and due diligence conference calls.
Deadline to provide final comments on 3rd draft POS and NOS
Rating due from Rating Agency
POS and NOS Publication
Pricing of Certificates of Obligation, Series 2024, Bids due 10:00 am Central Time
Regular Scheduled City Council Meeting
City Council considers and approves Ordinance Authorizing the Issuance of the Certificates of Obligations, Series 2024
Deadline to publish Final Official Statement
Attorney General Approves Sale
Closing of the Series 2024 issue and delivery of funds to the City
Key Actions to be Taken by City Council
Key Actions to be Taken by City Staff
**Preliminary, subject to change.
TBD City Staff, BC
Tuesday, 06/11/24
City Staff / FA
City Council
TBD City Staff, BC
CITY OF ANNA, TEXAS
APPROX. $25,000,000* COMBINATION TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2024
As of May 30, 2024
Responsible
Date Event Party
Tuesday, 06/18/24 FA
Tuesday, 06/25/24 All parties
Wednesday, 06/26/24 FA
Tuesday, 09/10/24 UW, BC, PA, EA
Tuesday, 08/13/24 FA
City Council
Prior to Closing AG, BC
FA
Friday, 07/12/24
FA
Thursday, 08/22/24
Friday, 08/2/24 RA
7/17/2024 - 7/19/2024 All parties
Wednesday, 07/17/24
All parties
FA
Friday, 07/26/24 All parties
Hilltop Securities Inc. Page 1 Public Finance Department