Tulsa Sets $70 Million of GOs For Street Improvement Program

DALLAS — Tulsa, Okla., will finance the next 12 months of its five-year street improvement program with the proceeds from Thursday’s competitive sale of $70 million of general obligation bonds.

The sale also includes two series of GO refunding bonds totaling $35.4 million.

The new-money bonds are the second tranche from $285 million of bonds approved by voters in December 2008 for the $451.6 million street improvement effort. Tulsa sold $11 million of the bonds authorized in 2008.

Tulsa GOs are rated AA by Standard & Poor’s and Aa2 by Moody’s Investors Service.

Hilborne & Weidman PC is the city’s bond counsel.

Tulsa has $251.5 million of outstanding GO bonds, and $147.2 million of revenue debt.

The refunding bonds are being issued in two series. The $14.7 million 2009A series will refund most of the $18.6 million of outstanding bonds from 1999, and the $20.7 million 2009B series will refund most of the $25.3 million of outstanding GO bonds issued in 2001.

Matt Cooper, a treasury analyst with the city, said the two refunding series would provide net present-value savings of slightly under $2.5 million.

“Based on the interest rate scale that we anticipated when we did the analysis of the outstanding bonds, we’ll see a saving of almost $1.5 million on the 1999 bonds, or just under 8% of the refunded bonds,” he said. “We expect savings of right at $1 million on the 2001 bonds, or 4.08% of the refunded bonds.”

The sale does not include taxable Build America Bonds, Cooper said, but later sales could have a BAB component.

“We had considered BABs, but it was brought up late in the process,” he said. “We’ll probably look at them for the planned sale in 2010, because we’ll complete that sale before the BABs program ends.”

Tulsa issued the first $11 million from the 2008 authorization in May as part of a $51.8 million GO sale from a 2005 authorization of $250 million, Cooper said.

“We had a project from the 2005 authorization that was pushed back, so we moved one of the new projects up and sold the first tranche from 2008,” he said. “We will issue the remaining $11 million from the 2005 election with the sale next year.”

Tulsa finance director Michael Kier said the sales schedule for the 2008 authorization, which is subject to revision, calls for a $58.9 million sale in fiscal 2011, $50 million in fiscal 2012, $45 million in fiscal 2013, and $50 million in fiscal 2014.

The $285 million of GO bonds were approved by 60% of the voters in December 2008 election. Voters also approved generating $166.6 million for the street program by extending for two years the city’s 1% “third penny” sales tax set to expire in early 2013, and taking over and extending Tulsa County’s 0.167% sales tax that will expire in 2012.

With a population of approximately 384,000, Tulsa is the second-largest city in Oklahoma. Net assessed property valuation is $2.8 billion.

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