Title
Water and Sewer Revenue Bond Anticipation Note
Action
Action:
A. Adopt a bond order and resolution authorizing the issuance of up to $250,000,000 of revenue bond anticipation notes and calling for the execution and delivery of various documents in connection with the issuance, and
B. Authorize city officials to take necessary actions to complete the financing, including making the application to the Local Government Commission.
Body
Staff Resource(s):
Kelly Flannery, Finance
Angela Charles, Charlotte Water
Explanation
§ City Council adopts the Charlotte Water Capital Investment Plan which includes capital projects to be funded with debt proceeds. The debt issuance is planned in two steps; a short-term construction period draw program lasting up to 36 months which will then be converted into long-term, fixed rate revenue bonds once construction nears completion.
§ This financing approach reduces interest cost, promotes rate stability, and provides flexibility in the timing of the spending.
§ The construction period financing will be in the form of a $250,000,000 privately placed drawdown program, allowing the city to reimburse expenses on a monthly basis during construction and eliminating interest expense on funds not yet expended on the projects.
§ The projects being funded are concentrated in two different areas:
- Maintenance of existing treatment facilities to ensure reliable treatment process and regulatory compliance, and
- Rehabilitation and replacement of existing water and sewer infrastructure that has met its useful performance life.
§ This action does not require rate increases.
§ The North Carolina Local Government Commission is expected to review and approve this financing on June 1, 2021.
Fiscal Note
Funding: Charlotte Water Revenue Bond Debt Service Fund
Attachments
Attachment(s)
Bond Order
Resolution