Fiscal Note
This resolution authorizes the issuance of up to $107,860,000 $108,005,000 in general obligation promissory notes and an irrevocable property tax sufficient for the purpose of paying principal and interest on the notes. These notes will be used to finance current year projects and programs authorized in the 2024 adopted capital budget. A description of the specific expenditure purposes is included in the resolution. The total amount includes cost of issuance.
The notes will be structured with a tax-exempt series of 10 and 20 year amortization periods that total approximately $82 million, a "green" note tax-exempt series of 10 and 20 year amortization periods that total approximately $18 million, and an affordable housing / tax increment financing series of $6.3 million, that may be either issued as taxable or tax-exempt debt . "Green" notes have become attractive to certain investors that are interested in supporting projects that have a benefit to the environment.
This year's borrowing is utilizing a recent change to state law that authorizes municipalities to issue promissory notes with a maturity of up to 20 years. The previous maximum allowable maturity for promissory notes was 10 years; borrowing with a longer maturity was considered to be bonds under prior state law. Issuing the debt as promissory notes allows municipalities to forego the initial resolution and other requirements associated with issuing bonds.
The resolution establishes parameters for maximum amount issued (described above) and a maximum true interest cost (interest rate) of 5.0 percent for tax-exempt debt and 6.25 percent for taxable debt. Under the resolution, the Finance Director is authorized to certify that the qualifying low bid based on the parameters. The Mayor and City Clerk are authorized to approve the sale as certified by the Finance Director. It is expected that the sale will occur prior to September 30, 2024.
Interest on the $108 million is estimated t...
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