Page 118 - CityofBurlesonFY26Budget

governmental lending agency or authority can provide beneficial interest rates or
terms compared to financing in the public market.

The City’s debt obligations may be sold by competitive sale, negotiated sale or
private placement methods. The selected method of sale depends upon the
option which is expected to result in the lowest cost and most favorable terms to

the City given the financial structure used, market conditions, and prior
experience. When considering the method of sale, the City Council may consider
the following issues:

1. Financial conditions;
2. Market conditions;
3. Transaction-specific conditions;

4. City-related conditions;
5. Risks associated with each method;

6. Complexity of the Issue – Municipal securities with complex security
features require greater marketing and buyer education efforts on the part
of the underwriter, to improve the investors’ willingness to purchase;
7. Volatility of Bond Yields – If municipal markets are subject to abrupt

changes in interest rates, there may be a need to have some flexibility in
the timing of the sale to take advantage of positive market changes or to
delay a sale in the face of negative market changes;

8. Familiarity of Underwriters with the City’s Credit Quality – If underwriters
are familiar with the City’s credit quality, a lower (TIC) may be achieved.
Awareness of the credit quality of the City has a direct impact on the TIC an
underwriter will bid on an issue. Therefore, where additional information in

the form of pre-sale marketing benefits the interest rate, a negotiated sale
may be recommended. The City strives to maintain an excellent bond
rating. As a result, the Municipal Bond Market is generally familiar with the

City’s credit quality; and
9. Size of the Issue – The City may choose to offer sizable issues as negotiated
sales so that pre-marketing and buyer education efforts may be done to

more effectively promote the bond sale.

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