SUMMARY:
The San Antonio Water System District Special Project (DSP) requests City Council approval of an ordinance amending the City of San Antonio, Texas District Special Project Waterworks System Tax-Exempt Flexible Rate Revolving Note Private Placement Program.
BACKGROUND INFORMATION:
In June 2012, City Council approved an ordinance authorizing the City of San Antonio, Texas District Special Project Waterworks System Tax-Exempt Flexible Rate Revolving Note Private Placement Program (Program) in an amount not to exceed $100,000,000. The Program provided $68,700,000 to fund the redemption of a portion of the outstanding debt of the Bexar Metropolitan Water District (BexarMet) to provide interest expense savings to assist the DSP in maintaining compliance with its bond covenants and cash flow requirements, and provide funding for capital projects of the DSP. The Program, dated June 28, 2012 with Wells Fargo Bank, has an expiration date of May 1, 2015. The Program notes were issued as variable rate revolving notes with interest rates reset monthly to take advantage of the historically low interest rates on the short-end of the yield curve. There is a 20 basis point (.20%) fee that applies to any unissued notes under the Program.
The Program has served as a beneficial financial tool by providing the DSP with ready access to capital as necessary to improve, operate and maintain the DSP System. Since the inception of the Program, the DSP has saved approximately $4.7 million in interest expense by redeeming a portion of the BexarMet debt.
To provide capacity to fund capital needs of the DSP System until integration with SAWS, an amendment to the Program is being requested to extend the termination date of the Program to May 1, 2107, and increase the amount of the Program to $115,000,000.
ISSUE:
The proposed ordinance requests authorization to amend the terms of the Program to increase the amount of the Program to $115,000,000 and extend th...
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