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Home My WebLink AboutR-2010-03 Certificates of Obligation for Drainage Improvement Projects 11 REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: March 8. 2010 Appropriation Requested By: Michael G. Dolbv. Director of Finance Source of Funds: N/A Department: FINANCE Account Number: N/A Report: Resolution: XX Ordinance: Amount Budgeted: Exhibits: Resolution Amount Requested: N/A Exhibits: Financing Schedule Budgeted Item: Exhibits: SUMMARY & RECOMMENDATION At this time, we would like to issue Certificates of Obligation Bonds for the following projects: Drainage Improvements Maximum of $6,400,000 While preliminary work was begun on these projects some time ago, it was not desirable for us to issue debt until this time. City Council has previously approved resolutions that allow the City to reimburse itself from these bond proceeds for expenditures that were made prior to the issuance of the debt. This is a position that we have taken on several other projects in the past as recommended by bond counsel and required by federal law. In order to issue bonds, a city is required to publish a Notice ofIntent (NOI) to Sale. We would like to publish the initial Notice ofIntent for Certificates of Obligation up to a maximum of $6,400,000 on Wednesday March 10,2010 and the second notice on Wednesday, March 17,2010. The City is also anticipating refunding $4,375, 000 million in callable debt at the same time we issue the new debt. RBC Dain Rauscher, the City's Financial Advisors, is preparing and will make available to us a Preliminary Official Statement which will be reviewed and updated by staff that must also be approved by Council. approve and authorize the first and second publication of Notice of ~6!~ RESOLUTION NO. 2010- ()3 RESOLUTION AUTHORIZING PUBLICA nON OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION FOR THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN PUBLIC WORKS; AUTHORIZING DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT RELATING TO SUCH CERTIFICATES; AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO STATE OF TEXAS COUNTY OF HARRIS CITY OF LA PORTE s s s WHEREAS, the City Council (the 'City Council') of the City of La Porte, Texas (the 'CitY'), is authorized to issue certificates of obligation to pay contractual obligations to be incurred for the construction of public works, for the purchase of materials, supplies, equipment, machinery, buildings, land and rights-of-way for authorized needs and purposes, and for the payment of contractual obligations for professional services pursuant to Subchapter C of Chapter 271, Texas Local Government Code, as amended; WHEREAS, the City Council has determined that it is in the best interests of the City and otherwise desirable to issue certificates of obligation in a principal amount not to exceed $6.4 million styled "City of La Porte, Texas, Certificates of Obligation, Series 2010' (the "Certificates') for the design, engineering, acquisition and construction of certain public works and the purchase of certain equipment for authorized needs and purposes and for the payment of contractual obligations for professional services; WHEREAS, in connection with the Certificates, the City Council intends to publish notice of its intent to issue the Certificates (the 'Notice') in a newspaper of general circulation in the City; WHEREAS, for purposes of providing for the sale of the Certificates, the City Council intends to authorize the preparation of a Preliminary Official Statement (the''Preliminary Official Statement') to be used in the public offering of the Certificates; and WHEREAS, the City Council has been presented with and has examined the proposed form of Notice and finds that the form and substance thereof are satisfactory. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: Section 1. Preamble. The facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct. HOU:2987731.1 Section 2. Authorization of Notice. The City Secretary is hereby authorized and directed to deliver the Notice, in the form set forth in Exhibit A hereto, and to publish such Notice on behalf of the City once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be at least thirty-one (31) days before the date tentatively set in the Notice for the passage of the ordinance authorizing the issuance of the Certificates. Notwithstanding any other provision of this Resolution, the Mayor and City Manager are each hereby authorized to make or approve such revisions, additions, deletions, and variations to the Notice as, in the judgment of the Mayor and/or City Manager and in the opinion of Bond Counsel to the City, may be necessary or convenient to carry out or assist in carrying out the purposes of this Resolution, or as may be required for approval of the Certificates by the Attorney General of Texas; provided, however, that any change to the Notice resulting in material substantive amendments shall be subject to the prior approval of City Council. Section 3. Authorization of a Preliminary Official Statement. This City Council hereby approves the preparation and distribution by the City's financial advisor to prospective purchasers of the Certificates of the Preliminary Official Statement, as the same may be completed, modified, or supplemented with the approval of the Mayor or other authorized officers and agents of the City. Section 4. Authorization of Other Matters Relating Thereto. The Mayor, City Secretary and other officers and agents of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this Resolution. Section 5. passage. Effective Date. This Resolution shall take effect immediately upon its Section 6. Public Meeting. It is officially found, determined and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered at such meeting, including this Resolution, was given all as required by the Texas Government Code, Chapter 551, as amended. 2 HOU:298773\.\ CITY OF LA PORTE, TEXAS ATTEST ~AAuit/ City ecretary (SEAL) S-l HOU:2987731.l EXHIBIT A NOTICE OF INTENTION TO ISSUE CERTIFICATES NOTICE IS HEREBY GIVEN that the City Council of the City of La Porte, Texas (the 'CitY) will meet at its regular meeting place at City Council Chambers, City Hall, 604 West Fairmont Parkway, La Porte, Texas at 6:00 p.m. on April 12, 2010, which is the time and place tentatively set for the passage of an ordinance and such other action as may be deemed necessary to authorize the issuance of the City's certificates of obligation, payable from ad valorem taxation and a limited (in an amount not to exceed $1,000) subordinate pledge of certain revenues of the water and sewer system of the City, in the maximum aggregate principal amount of $6.4 million, bearing interest at any rate or rates, not to exceed the maximum interest rate now or hereafter authorized by law, as shall be determined within the discretion of the City Council at the time of issuance and maturing over a period of years not to exceed forty (40) years from the date thereof, for the purpose of evidencing the indebtedness of the City to pay all or any part of the contractual obligations to be incurred for the construction of public works, the purchase of materials, supplies, equipment, machinery, buildings, land and rights-of-way for authorized needs and purposes, to wit: street improvements, drainage improvements and parks improvements throughout the City and professional services rendered in connection with the above listed projects. S-l HOU:2987731.1 CERTIFICATE FOR RESOLUTION THE ST ATE OF TEXAS COUNTY OF HARRIS CITY OF LA PORTE s s s We, the undersigned officers of the City of La Porte, Texas (the "City"), hereby certify as follows: 1. The City Council of the City convened in a regular meeting on March 8, 2010, at the regular meeting place thereof, within the City, and the roll was called of the duly constituted officers and members of the City Council, to wit: Mayor Mayor Pro Tern Council Member Council Member Council Member Council Member Council Member Council Member Council Member and all of such persons were present except thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION FOR THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN PUBLIC WORKS; AUTHORIZING DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT RELATING TO SUCH CERTIFICATES; AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO (the "Resolution") was duly introduced for the consideration of the City Council. It was then duly moved and seconded that the Resolution be adopted on first reading pursuant to Section 3.09 of the City Charter; and, after due discussion, such motion, carrying with it the adoption of the Resolution, prevailed and carried by the following vote: AYES: q NAYS: ABSTENTIONS: 2. That a true, full and correct copy of the Resolution adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that the Resolution has been duly recorded in the City Council's minutes of such meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of HOU:2999397.! such meeting pertaining to the adoption of the Resolution; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of the City Council as indicated therein; that each of the officers and members of the City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and subject of the aforesaid meeting, and that the Resolution would be introduced and considered for adoption at such meeting, and each of such officers and members consented, in advance, to the holding of such meeting for such purpose; that such meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of such meeting was given as required by the Open Meetings Law, Chapter 551, Texas Government Code. SIGNED AND SEALED this j.... ~ ,2010. ~tULJ~A City Secretary City of La Porte, Texas (SEAL) S-1 HOU:2999397.! AFFJ:DA VlT OF NEWSPAPER PUBLISHER THE STATE OF TEXAS ~ ~ S COUNTY OF HARRIS Before me, the undersigned authority, on this day personally appeared Adam Yanelli , who being by me duly sworn, deposes and says that he/she is the Edi tor /Publisher 0f The Bayshore Sun and that said newspaper (i) devotes not less than 25% of j,ts total column lineage to general interest items, (ii) is published at least once each week, (iii) is entered as a second-class postal matter in the county in which it is published and is genel.'aUy circulated within the territory of the City of La Porte, Texas (the "City"), and (iv) was publi-shed regularly and continuously for at least 12 months before March 10, 2010, the fIrst date on which the City published the attached notice in said newspaper. SUBSCRIBED AND SWORN TO before me this the ~hlay of March, 2010. ~~ Notary Public, State of Texas Deborah Sue stout U 1111111111111111/ 11111111111111111111111111/ 1II1111l 5' ~.,.y .,,~'c> DE80RAH SUE STOUTg 5 * ~ * NOTARY PUBLIC ~ = ....... ~ ~ STATE OF TEXAS = :: "'~o".1-. Comm. Exp. 03-13-2012 = Rill III II 1/1 Will/III ilium J1111 J 111111 J 1111 J 1 J J fi My commission expires: 03/ 1 3 /201 2 l'l'OU,30tl2'37 U City of La Porte, Texas Overview of: $6,105,000 * Certificates of Obligation, Series 2010 $4,375,000 * General Obligation Refunding Bonds, Series 2010 March 8, 2010 I.~~ . . . ~ RBC Capital Markets~ · Preliminary, subject to change, City of La Porte, Texas - Current Market Conditions ~i:;:tfud;x of20 Municipal Bonds an~ 25 Municipa;---- .January 1990 8.50 - 8.00 Fixed Rates of Interest Bond Buyerlndex of20 Muoi. General Obligation Bonds High 7.56% / Low 3.94% / Average 5.40% Bond Buyerlndex of25 Muoi. Revenue Bonds High 7.83% /Low4.38% / Average 5.74% 7.50 7.00 - 6.50 ]] 6.00 - 5.50 5.00 .94% 4.50 .36% 4.00 3.50 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I. I RBC Capital Markets: City of La Porte, Texas - Current Market Conditions -.-.--..--------...-..-- .__.~ -- -. ----~ - Didex of20 Municipal Bonds and 25 Municipal Bonds I January 3, 2008 to c ;,.> >x 6.48% , 650 A I .3 "I. , , , I " Bond Buyer Index of20 Muni. General Obligation Bonds 625 High 6.01 % I Low 3.94% I Average 4.71 % - cO ~ I) \ Bond Buyer Index of 25 Muni. Revenue Bonds 6.00 .8 "1.1\ High 6.48% I Low 4.63% I Average 5.36% - 575 J A /1\ I........... I r, ,/ 1\, ...... Tl' 550 'i II .... 1\ ~ , h \ ~. .40/. I .. 525 . '-' No- "'N V iF' ..... ..... 'J " 4.\ ~% "C ..... IV "il 5.00 '...- 5 ;;: 4.75 450 I I 425 - 4.00 - BBI 25 - Revenue Debt 3_75 ~'b 'b 'b 'b 'b ~'b ~'b ~'b ~'b ~'b 'b ~'b <s>'b <s>'b ~'b ~'b<s>'b <s>'b 'b <s>'b <s>'b ~'b 'b ~'b ~'b 'b 'b !'1 !'1<s><>' !'1 rg, rg, <s><>' rg, rg, !'1 rg, !'1 <s><>' rg, rg, <s><>' <s><>' !'1 !'1 !'1 rg, !'1 rg, rg, !'1 !'1 ,,<:> ,,<:> ,,<:> ,,<:> oSS ",<S>",<S>,,<S>,,<S>oSS ~ ^SS ,,<:s ~ ,,<s>~ 0; 0; ,,<:S ~ 0; 0; ,,<s>,. ,. ~ ,,<s>~ ,,<:s "<S>,,<S>,,<S>,,,<SS0; ,,<s>~ ~ ,. ~ ~ ,,<SS,,<:s ,,<SS0; ~ ~ 0; 0; ,,<SS,,<SS,,<SS~ "'<SS~ ,,<:S "<SS,,<SS,,,<:> ",<:> ,,<:> ,,<:> :,\'0-" ''?''~'~'''?'V.' ,<:>'1"",'b'v' ~"'{\ ':\"','\''?'~~~,,'b.,' ,{>, ,<>' ',,'0' ,b'",<:>' ,I>'~',?' ""'{I'v,,,,b""",,b',~ <>, '",'0":1 '\'"v ~I>' ~':\' ',b',?<:>~ ,'?~v ',<:>'1",'b:..,"" ,,,',<>,. ,'0'" ',?<:>'~'~'" .{>, .# .i'l~,"', .,<:1 ",<:I ~"> ~"> 9.'~ l ~~"'"', ,-<>"'",<? \~<>-\$> sf" ~-s> ",,6 ",,6 if'~~' ~~""~' ~~""~\<>~~<\~,"', -,<:I ,,<:1 ~"> ~"> '1"f 9.'~ ~~,,"', ,,,,"',,,<? ,~<>-\<>-;~t d' ",,6 ",,6 if'''",~' ~~ ""~' <f'~ ""~' ",,~':i-~'"', ,,<:1 ,,<:1 ,,"" <;>' ~~'~" '1" '1" '> v if>;;' ~~ ~ ~ $' ~ $' $' ~ ~~'~" '1" '> v ;;. if> ~~ ,0 ~ $' ~, $' $' ~ ~ 0,; '''''"'>'~i5'<<.i5' '1" '1" ~~ If oo~o" "~<:l ~~ ~~ ,>'''"o,;''';,,5\i5' '1" '1" ~,<I:f ~~ oo~~o" ,,~<)~~ ~~ ~~o,;'''"o,;'~i5'<<.i5' S~ S~ ~o <)~ <)~ S~ S~ ~o <)~ <)~ I"" I RBC Capital Markels" .. . 2 City of La Porte, Texas II Estimated Debt Serv ice Requirements - $6,105,000* Certificates of Obligation, Series 2010 Less: Fiscal Self- Plus: Series 2010 Year Current Total Supporting Certificates ofObli~ation Total Debt (9/30) Debt Sernce Debt (a) Principal * Interest (b) Total Service 2010 $3,657,710 $1,534,015 $2, 123,695 2011 3,642,879 1,525,418 $326,760 $326,760 2,444,221 2012 3,624,641 1,529,723 $315,000 233,400 548,400 2,643,318 2013 3,657,576 1,571,723 325,000 223,800 548,800 2,634,653 2014 3,640,318 1,578,970 335,000 213,900 548,900 2,610,248 2015 3,613,542 1,571,098 345,000 203,700 548,700 2,591,144 2016 3,573,804 1,558,516 355,000 193,200 548,200 2,563,488 2017 3,278,281 1,284,459 365,000 181,488 546,488 2,540,310 2018 3,251,394 1,284,590 380,000 168,450 548,450 2,515,254 2019 3,225,585 1,286,262 395,000 153,900 548,900 2,488,223 2020 3,072,866 1,280,477 410,000 137,800 547,800 2,340,189 2021 2,738,210 1,135,599 430,000 119,925 549,925 2,152,536 2022 2,739,096 1,143,657 445,000 100,238 545,238 2,140,677 2023 2,725,178 1,147,237 470,000 79,650 549,650 2,127,591 2024 2,716,271 1,150,776 490,000 58,050 548,050 2,1l3,545 2025 2,702,514 1,155,433 510,000 35,550 545,550 2,092,631 2026 596,392 462,545 535,000 12,038 547,038 680,884 2027 599,430 465,621 133,809 2028 596,330 477,064 119,266 2029 597,285 477,828 119,457 Totals $54,249,301 $23,621,01l $6,105,000 $2,441,848 $8,546,848 $39,175,138 · Preliminary, subject to change. I. I RBC Capital MarkelS: (a) Includes debt services which is paid from other revenue sources than ad valorem taxes. (b) Interest estimated a current market conditions for illustration purposes only. City of La Porte, Texas Refunding Optimization Refunded Refunded Series .MlII.1i!:iJ): !:wuIm Rf'fnodfa:d Par ~ .cau..f.til:t New Yield (a) General Obligaton Bonds, Series 1998 03/15/2011 4.250% 125,000 05/01/2010 100.00 1.350% 03/15/2012 4.250"/0 125,000 05/01/2010 100.00 1.690% 03/15/2013 4.250"/. 125,000 05/01/2010 100.00 1.930"/0 03/15/2014 4.250"/. 125,000 05/01/2010 100.00 2.220"/0 03/16/2014 4.250"/0 125,000 05/01/2010 100.00 2.600% 03/17/2014 4.250"/0 125,000 05/01/2010 100.00 3.040"/0 03/18/2014 4.250"/. 125,000 05/01/2010 100.00 3.360"/0 03/19/2014 4.250"/. 125,000 05/01/2010 100.00 3.620"/0 03/20/2014 4.250"/. 125,000 05/01/2010 100.00 3.810"/0 1,125,000 General Obligation Bonds, Series 2000 03/15/2011 5.200"10 175,000 05/01/2010 100.00 1.350"/0 03/15/2013 5.300"10 175,000 05/01/2010 100.00 1.690"/0 03/15/2013 5 .400"/0 175,000 05/01/2010 100.00 1.930"/0 03/15/2014 5.125% 175,000 05/01/2010 100.00 2.220"/. 03/15/2015 5.000"10 175,000 05/01/2010 100.00 2.600% 03/15/2016 5.000"/0 175,000 05/01/2010 100.00 3.040"/. 03/15/2017 5.000"/0 175,000 05/01/2010 100.00 3.360"/. 03/15/2018 5.000"/0 175,000 05/01/2010 100.00 3.620"/0 03/15/2019 5.000"/0 175,000 05/01/2010 100.00 3.810"/. 03/15/2020 5.000"/0 175,000 05/01/2010 100.00 3.970"/0 1,750,000 C-ertificates of Obligation, Series 2000 03/15/2011 5.000"/. 150,000 05/01/2010 100.00 1.350"/0 03/15/2013 5.000"/. 150,000 05/01/2010 100.00 1.690"/0 03/15/2013 5.000"/. 150,000 05/01/2010 100.00 1.930"/0 03/15/2014 5.000"/0 150,000 05/01/2010 100.00 2.220"/0 03/15/2015 5.000"/0 150,000 05/01/2010 100.00 2.600"/. 03/15/2016 5.000"/. 150,000 05/01/2010 100.00 3.040"/0 03/15/2017 5 .000"/0 150,000 05/01/2010 100.00 3.360"/0 03/15/2018 5.000"/. 150,000 05/01/2010 100.00 3.620"/0 03/15/2019 5.000"/0 150,000 05/01/2010 100.00 3.810"/0 03/15/2020 5.000"/. 150,000 05/01/2010 100.00 3.970"/0 1 ,500,000 Grand Total 4,375,000 (a) Market Rates as of3/1/2010. (b) Savings are inclusive of estimated transaction expenses. - Sa\'inps (h) 677 3,185 5,391 6,712 6,763 5,014 3,687 2,776 1,910 36,113 2,387 7,183 11,501 12,946 13,384 12,757 11,958 10,985 10,015 9,594 102,710 1,650 6,053 9,773 9,403 10,468 9,928 9,244 8,410 7,578 6,791 79,299 218,122 I. I RBC Capital Markets: City of La Porte, Texas II Schedule of Events I I B I~ I \ I{ \ - ~1I111 S M T W T F S ] 2 3 4 5 6 7 8 9 10 ]] 12 ] 3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 " \ I~ ( II - ~II III S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2] 22 23 24 25 26 27 28 29 30 31 \ I' I~ I I - ~1I111 S M T W T F S 1 2 3 4 5 6 7 8 9 10 I] ]2 ]3 14 15 16 ]7 18 ]9 20 21 22 23 24 25 26 27 28 29 30 " \ \ - ~II III S M T W T F S I 2 3 4 5 6 7 8 9 ]0 ]] 12 13 14 ]5 16 ] 7 ]8 19 20 21 22 23 24 25 26 27 28 29 30 31 · Preliminary, subject to change. $6,105,000* Certificates of Obligation, Series 2010 Dav/Date Friday, February 26 Friday, March 5 Monday, March 8 Wednesday, March 10 Friday, March 12 Tuesday, March 16 Wednesday, March 17 Wednesday, March 17 Monday, April 12 Tuesday, April I3 Monday, April 19 Tuesday, May 11 $4,375,000* General Obligation Refunding Bonds, Series 2010 Action First Draft of Preliminary Official Statement (p.O.S.) and Notice of Sale (N.O.S.) Second Draft ofP.O.S. and N.O.S. (Forward to all Participants) City Council Reviews Schedule of Events, Plan of Finance, and Authorizes Publication of Notice oflntention to Issue Certificates of Obligation (Regular Council Meeting) Publish I st Notice of Intention to Issue C. 0.' s Third Draft ofP.O.S. (Forward to Rating Agency and Bond Insurers) Final Comments Due on P,O.S. Print and Distribute P.O.S. Publish 2nd Notice of Intention to Issue C.O. 's Bond and CO. Sale City Council Adopts Order Authorizing the Issuances R~rewFinalOfficialStatemem Print Final Official Statement Delivery of Bonds PARTICIP^,"ITS City - City of La Porte, Texas RBC - RBC Capital Markets Corporation AK - Andrews Kurth r r p ParticiDants RBC RBC, City, AK RBC, City, AK City, AK RBC, City, AK RBC, City, AK RBC City, AK RBC, City, AK RBC, City, AK RBC RBC, City, AK I. I RBC Capital Markets: