TOWN STAFF REPORT RECOMMENDATIONS
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Discuss and take action to adopt Ordinance 1027 Authorizing the Issuance of up to $9,540,000 Town of Westlake, Combination Tax and Revenue Certificates of Obligation, Series 2025, to fund water projects, including pump stations and a water tower, and the Sam & Margaret Lee Arts & Science Center; Levying an Annual Ad Valorem Tax and Providing for the Security for and Payment of said Certificates of Obligation; Approving an Official Statement; and Enacting other Provisions relating to the Subject (Cayce Lay Lamas, Finance Director)
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STAFF: Finance Director Cayce Lay Lamas
BACKGROUND:
The Town Council will discuss and take action to adopt an Ordinance authorizing the issuance and sale of combination tax and revenue certificates of obligation, in an amount not to exceed $9,540,000, to fund pump station improvements, land acquisition and design services for a future water tower, and an expansion of the Sam & Margaret Lee Arts & Sciences Center at Westlake Academy; levying an annual ad valorem tax and providing for the payment of said certificates of obligation; approving an official statement; and enacting other provisions relating to the subject. The amount being considered for issuance is less than the amount included in the Notice of Intention published by the Town on May 23, 2025 and May 30, 2025; the Town will not issue any additional debt associated with said Notice of Intention, and said Notice of Intention will be extinguished upon approval of this Ordinance.
DISCUSSION:
The Town Council approved a Notice of Intent to issue debt at the May 20, 2025, meeting in response to pending legislation that would have severely limited the Town’s borrowing opportunities going forward. Projects originally planned over the next three (3) fiscal years were presented for consideration in a bond issuance and notice was given in an amount not to exceed $30 million. The notice was correctly published in the Star Telegram and on the Town’s website.
When the concerning legislation failed to pass, the project list was scaled back to include only items requiring funding during Fiscal Year 2026. The issuance for approval is now limited to $9,540,000 and is projected to be facilitated as follows:
• $4,000,000 for the expansion of the Arts & Sciences Center on campus. This portion of the debt will be serviced by property taxes, which is anticipated to require an approximately 0.5-cent increase.
• $5,500,000 for utility projects, including the purchase of land for a future water tower, design/engineering for a future water tower, and pump station improvements identified during the water system study. This portion of the debt will be serviced by water rates, which are anticipated to require an approximately 18% increase.
• Up to $40,000 for issuance costs; these costs will be split proportionately between the two projects, pending the final sale.
The final property tax rate and water rates will be calculated with the actual issuance costs, tax year 2025 certified valuation of property, and revised utility projections ahead of any potential increase for fiscal year 2026. These increases, if needed, will be publicly discussed and voted on during future Council meetings.
FISCAL IMPACT:
The Town anticipates receiving $9,500,000 in bond proceeds, to be repaid over 30 years. The debt, along with the estimated $40,000 in issuance costs, are anticipated to require an approximately 0.5-cent property tax increase and 18% water rate increase.
STAFF RECOMMENDATION:
Staff recommends approval of the item as presented.
ATTACHMENT(S):
Ordinance 1027 - Authorizing the Issuance
Exhibit A - Written Procedures for Continuing Compliance
TOWN COUNCIL ACTION/OPTIONS:
1) Motion to approve
2) Motion to amend with the following stipulations (please state stipulations in motion)
3) Motion to table
4) Motion to deny