Department of Finance
Reference: 2016 Revenue Bond Refunding Ordinance
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Catrina Asher, Finance Director
Date Prepared: September 15, 2026
PURPOSE
To request City Council’s approval to refund the 2016 Water Activity Enterprise Bonds to secure a lower interest rate.
BACKGROUND
This proposal was presented to City Council at Study Session on September 8, 2026. The following background information is taken from the staff report from that meeting.
In 2009, the City issued $30,165,000 in water activity enterprise bonds to fund improvements to the City’s water and wastewater facilities. Those bonds carried interest rates ranging from 2.00% to 5.25% annually and were to be paid through 2037.
In 2016, the City refunded the 2009 bonds in order to secure a better interest rate. The new bonds accrue interest at rates ranging from 2.00% to 5.00% annually and held the same maturity date of 2037. These bonds are currently outstanding and had a balance as of December 31, 2025 of $12,420,000 and $4,205,000 in the water and wastewater funds, respectively.
The 2016 bonds are now eligible for refunding. Analysis of those bonds by the City’s Municipal Advisor (Hilltop Securities) indicates that a refunding could lower overall interest costs. At this time, the estimated savings of refunding would be $59 thousand annually, or $650 thousand through the remainder of the life of the bonds. If refunded, the bonds would mature in 2037, following the same timeline as the original 2009 bonds.
If the bonds were to be refunded, the process and approvals needed would be similar to the issuance of new bonds. The steps and proposed timeline are listed below:
September 8 – Staff proposes bond refunding at Study Session.
September 15 – Staff presents Borrowing Ordinance for initial approval.
October 6 – Staff presents Borrowing Ordinance for final approval and a budget amendment for t...
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