The City Council is scheduled to vote Tuesday on an ordinance that would let Frisco borrow up to $38.5 million for water and sewer work and a new facility for its sanitation utility.
The item, on the regular agenda for the Oct. 20 meeting, authorizes the sale of tax-exempt Certificates of Obligation, Series 2026A. A memo from Debt and Treasury Officer Brett Peterson lists the uses as waterworks infrastructure, sanitary sewer infrastructure, reuse water system improvements and construction of a new Environmental Services facility for the sanitation utility.
The draft ordinance describes the projects as transmission lines for the combined water and sewer system and a new sorting and transfer station for the sanitation utility, plus legal, fiscal and engineering fees.
Limits on the sale
The council would not set the final terms itself. The ordinance names the mayor, the city manager and the chief financial officer as pricing officers, each able to complete the sale within these limits from the memo:
- no more than $38.5 million in principal
- a true interest cost of no more than 5.5% a year
- a final maturity no later than Feb. 15, 2046
- a sale within 90 days of adoption
- a rating in one of the four highest categories from a national rating agency before delivery
The memo says the ordinance allows competitive bids for the certificates and that staff will report the actual results of the sale at a later council meeting. It also says two national rating agencies reviewed the city's credit for these sales and reaffirmed Frisco's AAA rating.
How it would be repaid
Under the draft ordinance, the city would levy an annual property tax to cover principal and interest. The certificates would also be backed by a pledge of surplus revenues from the water and sewer system, meaning money left after that system's operating costs and its own revenue debt are paid.
