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Item 7B MemoCity of Southlake, Texas MEMORANDUM TO: Billy Campbell, City Manager FROM: Sharen Elam, Director of Finance Ext. 1713 SUBJECT: Ordinance No. 866, approving and authorizing the issuance of "CITY OF SOUTHLAKE, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 2004A" Action Requested: Approval of Ordinance No. 866 authorizes the issuance of certificates of obligation for the purpose of funding capital improvement projects. Background Information: On May 4, 2004, the Council approved Resolution No. 04 -030. This authorized 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 adoption of an ordinance. Approval of Ordinance No. 866 will set in motion the legal requirements to obtain the proceeds. After approval, the legal documents must be reviewed by the Texas Attorney General's Office. The City would receive funding in early July. The proceeds from the bonds will be used for water and sewer improvements and extensions. Financial Considerations: The debt will be repaid through the utility fund's revenue. The proceeds from the bonds will be used to fund the approved projects in the 2003 -04 capital improvement budget. Bond package is a total of $3,500,000. Citizen Input/ Board Review: Public Hearing is scheduled for June 1, 2004. Legal Review: Ed Esquivel with the law firm Fulbright and Jaworski serves as the City's bond counsel, and as such has prepared the Ordinance. 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 fiscal year. Supporting Documents: Ordinance No. 866 Staff Recommendation: Approval of Ordinance No. 866