South Manville Development Authority authorizes distribution of preliminary statement for Series 2024 tax-increment contract revenue bonds

The South Manville Development Authority voted unanimously to approve and authorize distribution of the preliminary official statement (POS) for its Series 2024 tax-increment contract revenue bonds.

Kathleen Olesen, who identified herself in the meeting as a presenter, told the board the plan is to post the offering materials next Tuesday so the underwriter’s sales team can distribute them and that the bond sale is scheduled for the following week with a target closing date of Dec. 11. "Next Tuesday, we would print what I call print... and then the underwriter will pick that up," Olesen said, describing the timeline and distribution process.

The POS includes risk factors because the bonds are not rated, Olesen said. She outlined the security measures investors rely on, including a coverage test (she said rating agencies often look for about 120% coverage) and a debt-service reserve that would cover a one-year shortfall. "We're higher than that," Olesen said of the authority’s coverage, noting that history of revenues and an insurance-backed reserve provide additional protection for bondholders.

Olesen also summarized development metrics included in the POS as evidence of future tax base growth: 93 homes under construction and 451 vacant lots in the zone, figures she said were derived from appraisal district and county tax records. She told the board bond counsel has provided an opinion that bond interest will be tax-exempt and described the annual disclosure obligation for the authority.

Board members discussed a cybersecurity disclosure added to page 12 of the POS after a recent incident. The chair emphasized wording matters and said the city did not "lose" $450,000 but that the funds were stolen; he asked that the POS be updated if the stolen money is later recovered as part of a criminal investigation. Olesen said she would update the language and requested the authority provide an official city press release as the source for any corrective language.

The board approved a motion to authorize the underwriter, identified in the meeting as FMS Bonds, to post and distribute the POS to potential investors. The motion passed unanimously, 4 to 0. The authority will receive the actual sale interest rates after the underwriter markets the bonds.

The meeting record shows the board also handled other routine items and closed with unanimous procedural votes. The authority did not record objections or split votes on the authorization; board members did request that cybersecurity wording reflect whether funds are recovered before the POS is posted.