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Item 4ECITY OF SOUTHLAKE Item 4E MEMORANDUM May 14, 2024 To: Alison Ortowski, City Manager From: Sharen Jackson, Chief Financial Officer Subject: Resolution No. 24-019, approving and authorizing publication of notice of intent to issue certificates of obligation for water and wastewater projects Action Requested: Approval of Resolution No. 24-019 as initial step to issue certificates of obligation for capital improvement projects. Background Information: Approval of this resolution is the first step in issuing certificates of obligation. Once this Resolution is approved, the City may issue less than that amount, but cannot exceed it. The approval of the resolution does the following: • Establishes the maximum amount ($11,250,00) of the certificates the city can issue. • Authorizes the publication of a notice in the newspaper of the City's intent to issue certificates of obligation. The certificates are issued and approved by the adoption of an ordinance; approval is scheduled for August 6t". The city would receive funding in early September. The proceeds from the bonds will be used for the construction of Water and Sewer capital improvement projects in accordance with the capital improvement plan approved on February 20t". All other projects included in the approved FY 2024 Capital Improvement Program will be funded with cash. Financial Considerations: The debt will be repaid through the City's utility fund. All other projects included in the approved capital improvement plan will be cash funded. Strategic Link: F2: Investing to provide & maintain high quality public assets. Page 2 of 2 Citizen Input/ Board Review: The resolution is the first step in issuing certificates of obligation. Citizen input is not a requirement of the resolution; however, the Public Hearing is scheduled for August 6, 2024, with the Ordinance. Legal Review: The law firm Norton Rose Fulbright US LLP serves as the City's bond counsel, and as such has prepared the resolution. Alternatives: In the absence of issuing the certificates, capital projects would be funded on a pay-as-you-go basis. Budgets and the timing of projects would be prioritized based on the amount of revenue projected by the fiscal year. Supporting Documents: Resolution No. 24-019 Staff Recommendation: Approval of Resolution No. 24-019 RESOLUTION NO. 24-019 A RESOLUTION approving and authorizing publication of notice of intention to issue certificates of obligation. WHEREAS, the City Council of the City of Southlake, Texas (the "City"), has determined that certificates of obligation should be issued under and pursuant to the provisions of Texas Local Government Code, Subchapter C of Chapter 271, as amended, for the purpose of paying contractual obligations to be incurred for (1) constructing, improving, extending and equipping the City's combined waterworks and sewer system, including the purchase of land and rights -of -way therefor; (2) designing, constructing and equipping a City administrative facility supporting various City divisions, including the utility billing/customer service, streets and drainage, water, wastewater, environmental services and traffic divisions and (3) professional services rendered in connection therewith; and WHEREAS, prior to the issuance of such certificates, the City Council is required to publish notice of its intention to issue the same in a newspaper of general circulation in the City, said notice stating (i) the time and place the City Council tentatively proposes to pass the ordinance authorizing the issuance of the certificates; (ii) the maximum amount proposed to be issued; (iii) the purposes for which the certificates are to be issued; and (iv) the manner in which the City Council proposes to pay the certificates; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS: SECTION 1. That the City Secretary is hereby authorized and directed to cause notice to be published of the City Council's intention to issue certificates of obligation, in one or more series, in the principal amount not to exceed $11,250,000 for the purpose of paying contractual obligations to be incurred for (1) constructing, improving, extending and equipping the City's combined waterworks and sewer system, including the purchase of land and rights -of -way therefor; (2) designing, constructing and equipping a City administrative facility supporting various City divisions, including the utility billing/customer service, streets and drainage, water, wastewater, environmental services and traffic divisions and (3) professional services rendered in connection therewith. The notice hereby approved and authorized to be published shall read substantially in the form and content of Exhibit A hereto attached and incorporated herein by reference as a part of this Resolution for all purposes. SECTION 2. That the City Secretary shall cause the aforesaid notice to be (i) published in a newspaper of general circulation in the City, once a week for two consecutive weeks, the date of the first publication to be at least forty-six (46) days prior to the date stated therein for the passage of the ordinance authorizing the issuance of the certificates of obligation and (ii) posted continuously on the City's website for at least forty-five (45) days before the date stated therein for the passage of the ordinance authorizing the issuance of the certificates of obligation. SECTION 3. That it is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Texas Government Code, Chapter 551, as amended. SECTION 4. That this Resolution shall become effective immediately from and after its passage. 201391668.2/ 1001303467 PASSED AND ADOPTED, this May 21, 2024 CITY OF SOUTHLAKE, TEXAS Mayor ATTEST: City Secretary (City seal) 201391668.2/ 1001303467 EXHIBIT A NOTICE OF INTENTION TO ISSUE CITY OF SOUTHLAKE, TEXAS CERTIFICATES OF OBLIGATION TAKE NOTICE that the City Council of the City of Southlake, Texas, shall convene at 6:00 p.m. on August 6, 2024, at City Hall, 1400 Main Street, Southlake, Texas, and, during such meeting, the City Council will consider the passage of an ordinance authorizing the issuance of certificates of obligation in one or more series in an amount not to exceed ELEVEN MILLION TWO HUNDRED FIFTY THOUSAND DOLLARS ($11,250,000) for the purpose of paying contractual obligations to be incurred for (1) constructing, improving, extending and equipping the City's combined waterworks and sewer system, including the purchase of land and rights -of -way therefor; (2) designing, constructing and equipping a City administrative facility supporting various City divisions, including the utility billing/customer service, streets and drainage, water, wastewater, environmental services and traffic divisions and (3) professional services rendered in connection therewith; such certificates of obligation to be payable from ad valorem taxes and a lien on and limited pledge of the net revenues of the City's combined Waterworks and Sewer System. In accordance with Texas Local Government Code Section 271.049, (i) the current principal amount of all of the City's outstanding public securities secured by and payable from ad valorem taxes is $57,346,000; (ii) the current combined principal and interest required to pay all of the City's outstanding public securities secured by and payable from ad valorem taxes on time and in full is $65,804,532; (iii) the estimated combined principal and interest required to pay the certificates of obligation to be authorized on time and in full is $14,466,812; (iv) the maximum interest rate for the certificates may not exceed the maximum legal interest rate; and (v) the maximum maturity date of the certificates to be authorized is February 15, 2039. The certificates of obligation are to be issued, and this notice is given, under and pursuant to the provisions of Texas Local Government Code, Subchapter C of Chapter 271, as amended. City Secretary City of Southlake, Texas Exhibit A 201391668.2/ 1001303467