Title
Water Sewer Revenue Bonds and Revenue Bond Anticipation Notes
Action
Action:
A. Adopt bond orders and resolutions that makes certain Statements of Fact concerning the refunding of Water Sewer Revenue Bonds and Revenue Bond Anticipation Notes,
B. Provide for the issuance of Water Sewer Revenue Bonds in an amount not to exceed $535 million,
C. Provide for the issuance of Water Sewer Revenue Bond Anticipation Notes in an amount not to exceed $500 million,
D. Authorize City Officials to take necessary actions to complete the financing, including making the application to the Local Government Commission, and
E. Adopt a budget ordinance appropriating $415 million in bond proceeds to the Charlotte Water Revenue Bond Debt Service Fund.
Body
Staff Resource(s):
Teresa Smith, Finance
Matt Hastedt, Finance
Angela Charles, Charlotte Water
Explanation
§ This action provides for the issuance of up to $535 million comprised of the following:
- New revenue bonds up to $120 million to provide financing for projects listed below,
- Refunding of the 2021 Bond Anticipation Note (BAN) of approximately $250 million, and
- Refunding of both the 2006B and 2011A revenue bonds for approximately $165 million at lower rates to achieve savings.
§ This action also provides for the issuance of up to $500 million in a new Revenue BAN.
§ In 2021, the City obtained a $250 million Revenue BAN to fund projects on a short-term, interim basis and planned to convert it to long-term, fixed rate revenue bonds at the end of the 24-month construction period.
§ In 2006, revenue bonds totaling $300 million were issued at a variable rate, and the City entered into a pay-fixed interest rate agreement. Approximately $135 million of proceeds will be used to refund the outstanding 2006B debt for savings and to fund a termination fee. The 2006B bonds will only be refunded if it results in a more favorable position for the City at the time of the financing.
§ Approximately $30 million of proceeds will be used to refund outstanding 2011A revenue bonds to achieve savings.
§ The 2022 Revenue BAN of up to $500 million 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 revenue bonds and BAN will provide funding for projects concentrated in two 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.
§ These actions do not require rate increases.
Fiscal Note
Funding: Charlotte Water Revenue Bond Debt Service Fund
Attachments
Attachment(s)
Bond Orders
Resolutions
Budget Ordinance