DATE: December 1, 2015
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Russ Truell, Assistant City Administrator/CFO
SUBJECT:
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*Consideration of Resolution 2015-84, a Resolution Authorizing the Issuance of $40 Million in Water/Sewer Revenue and Tax Bonds (10/08/15 Finance 3-0; 12/08/15 WS).
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Purpose
The purpose of this memorandum is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning a Resolution authorizing the issuance and sale of water and sewer tax and revenue bonds.
Background
The City of Franklin has previously financed projects in the Water and Sewer fund in two ways: 1) with bonds backed by the revenue of the water management system AND the taxing power of the City, or 2) the State Revolving Fund program. In order to take advantage of alternate financing methods and to better diversify our sources of funding, revenue bonds are being considered for the water plant upgrades.
In the event that revenue bonds are recognized as impractical, the City may choose to issue bonds that are backed by both revenue and taxes. If any bond issue where taxes are pledged, State law requires that an initial resolution be adopted and published in order to allow citizens a protest period.
The Budget and Finance Committee unanimously approved the initial resolution for $10 million for the water plant improvements. Based on the recommendation of the City's financial advisor and the inability of the State Revolving Fund to fund the entire wastewater treatment facility upgrade, the resolution has been increased by $30 million to include a portion of the funding needed for the water reclamation (wastewater treatment) plant.
Financial Impact
Adoption of an initial resolution does not commit the City to issuing bonds. A secondary, more comprehensive resolution would be required to issue bonds. Unless the bonds are ultimately issued, there will be no financial impact.
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