Title
Resolution Authorizing the Execution of Gainesville Regional Utilities Financial Transactions (B)
**This item is informational only.**
Explanation
Like other multi-system utilities GRU is a capital intensive operation. Every two to three years we need to access the financial markets to secure the funding necessary to assist us in acquiring, constructing and maintaining our capital infrastructure. Staff is planning a new money bond issue of up to approximately $130 million for the July-August time frame to replenish construction funds used for such infrastructure improvements. Staff is proposing issuing these bonds in two series, one of which will be issued as “green bonds” given that a portion of the proceeds will be going to fund renewable water and wastewater projects.
Additionally, working with our financial advisor PFM LLC, we have identified an opportunity to create significant present value debt service savings through a refunding of a portion of our outstanding 2012 Series A bonds. The refunding candidates bonds have maturities ranging from 2023 to 2028; the bonds issued to refund these bonds will not have a maturity longer than the refunded bonds. Given current market conditions, depending upon the refunding method chosen, the transaction could generate between $3.75 and $5.5 million in present value savings.
Outlined below are the details associated with the various refunding methodology options. We are requesting that the City Commission provide authorization to the General Manager or his designee to execute any of these prescribed options dependent upon what is most beneficial to GRU based on market conditions. This authorization will provide staff the flexibility to execute the transaction in a timely fashion and deliver the projected savings.
Taxable Advance Refunding - Several years ago Treasury regulations were changed to eliminate the authority for tax-exempt advance refundings (issuing tax-exempt bonds more than 90 days prior to the o...
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