DALLAS — Dallas may come to market in March with a delayed general obligation bond package, backed up by a new $350 million commercial paper program that will provide temporary construction financing for city bond projects.

The City Council will decide Wednesday on a proposal developed by chief financial officer David Cook and others for a $164.5 million negotiated bond sale, rather than the scheduled $314.5 million issue.

The bonds are to be priced on March 9.

The plan includes a commercial paper program that would allow the city to go ahead with projects from a $1.35 billion bond program approved by voters in 2006 without issuing GOs again until late 2011.

Proceeds from the March sale would finance ongoing projects until Sept. 30, Cook told the council last week in a briefing on the plan. By that time, he said, Dallas expects to have in place a program for short-term debt to finance bond projects until the contracts are completed.

The council last year delayed a planned bond sale from November until March to reduce debt service payments during fiscal 2010 as tax revenue fell.

The fiscal 2010 budget included $31.5 million of debt service for the bonds, but city manager Mary Suhm recommended a six-month delay to reduce debt service for the year by half.

The new proposal calls for a bond issue in March of $164.5 million, with $128.9 million of new money and $35.6 million to refund existing debt.

Bank of America Merrill Lynch will be senior manager. Ramirez & Co. will be co-senior manager. Other members of the underwriter team will be Citi, ­JPMorgan, Morgan Keegan & Co., and Rice Financial.

Vinson & Elkins LLP and West & Associates LLP are the city’s co-bond counsels for the March sale. Co-financial advisers are First Southwest Co. and ­Estrada Hinojosa & Co.

Dallas’ GOs are rated Aa1 by Moody’s Investors Service and AA-plus by Standard & Poor’s. The city has issued $654 million of the $1.35 billion of bonds in the 2006 authorization.

The city’s bond program would operate with the 270-day commercial paper debt until the projects are completed. Dallas would reimburse itself with proceeds from annual GO sales.

Cook said a former provision in the Dallas municipal code required the city to issue bonds and have the proceeds available before signing a construction contract, even when the project was years from completion.

Voters removed that provision as part of a charter revision election in 2005, Cook said.

The city water utilities has been involved in a CP program for several years, Cook said, and the department’s success with the financing prompted the new proposal.

The new money includes $5.7 million from a 1998 authorization and $123.2 million from the 2006 authorization.

The $35.6 million of refunding bonds would retire outstanding debt from 1996 and 2000 and advance refund a 2001 issue and that is expected to result in cash savings of $3.1 million.

Net present-value savings of $2.2 million is 5.6% of the par of the refunded bonds, based on current market conditions.

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