DALLAS — Dallas will take as much as $330 million of general obligation debt to market next week after the City Council voted Wednesday to increase the refunding component to a maximum of $170 million.

The issue, which is set for institutional and retail pricing on March 10, will also provide $129 million of new money. The GOs include $86.6 million of taxable Build America bonds.

The city will also issue $23 million of combination tax and revenue certificates of obligation in conjunction with the GO sale. The proceeds will be used to purchase equipment and build a police substation.

The underwriting team for the two sales is headed by senior manager Bank of America Securities Merrill Lynch with Ramirez & Co. as co-senior. Other underwriters include Citi, JPMorgan, Morgan Keegan & Co. and Rice Financial Products Co.

The city’s co-bond counsel are Vinson & Elkins LLP and West & Associates LLP. Co-financial advisers are First Southwest Co. and Estrada Hinojosa & Co.

Dallas’s GO debt is rated AA-plus by Standard & Poor’s and Aa1 by Moody’s Investors Service.

In January, the council gave the go-ahead to a bond sale of $164.5 million, with $128.9 million of new money and a $35.6 million refunding. The revised plan was developed due to favorable market conditions, the city’s co-financial advisers said.

“We were able to identify some additional refunding opportunities that worked well for the city, and achieves their goals,” said Wayne Placide, senior vice president at First Southwest. “It looks like the total refunding will be about $160 million rather than the full $170 million that the council authorized.”

Noe Hinojosa of Estrada Hinojosa said the restructuring of the debt will result in a $600,000 drop in Dallas’ debt service in fiscal 2011.

“The city typically structures its debt service with a level principal amount rather than level total debt service,” Hinojosa said. “They pay out their principal fairly rapidly, so a restructuring will reduce annual debt service by a significant amount.”

Dallas will refund various maturities of bonds issued between 1996 and 2008.

Jeanne Chipperfield, who in February replaced the retired David Cook as the city’s chief financial officer, said the refunding would result in cash savings of $9 million and a net present-value savings of $8.7 million or 5.074% of the par of the refunding bonds.

“The city has a policy of refunding debt if the net present value savings of at least 4%, and we’re going to exceed that,” Hinojosa said.

The new-money bonds include $5.7 million from $543.5 million of GOs approved by voters in 1998 and $123.2 million from a 2006 authorization totaling $1.35 billion. With the sale, Dallas will have $610.3 million of unissued bonds from the 2006 election.

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