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HomeMy WebLinkAbout05-28-86 Meeting of the La Porte Area Water Authority Minutes (approved on 6-4-86) LA PORTE AREA WATER AUTHORITY BOARD HINUTES MAY 28, 1986 1. The meeting was called to order by President Jerry Bramlett ay 6:10 P.M. MEMBERS PRESENT: President Jerry Bramlett, Vice-President Al Fields, Secretary Rick Matthews. MEMBERS ABSENT: Cary Burnley OTHERS PRESENT: Authority Attorney John ArmstrDng, Director of Public Works Jerry Hodge, Cecil Allen of Turner Collie & Braden. 2. The minutes of the May 7, 1986, meeting were read and approved. 3. Mr. Cecil Allen presented the probable cost summary for purchasing capacity in the Southeast Plant. He also presented a letter from Mike Marcotte of the City of Houston on the subject. It was decided that a meeting of the Authority would be held on Wednesday, June 4, 1986, at 7:00 P.M., and that Mr. Marcotte would attend to answer any questions the Board might have concerning the Southeast Plant. It was also decided to try and fund any correspondence for or with the City of Houston and/or CIWA showing their commitment to the Authority to provide raw water. 4. Due to the absence of Jack Owen there was no managers report. 5. There being no further business the meeting was adjourned at 7:25 P.M. Respectfully Submitted, Rick Natthevls Secretary/Treasurer PASSED AND APPROVED THI~THE ~ ~ DAY OF ~ ~ '\ JL~~~~i~ , 19.11 CITY OF HOUSTON Kathryn J. Whitmire, Mayor Post Office Box 1562 Houston, Texas 77251 CITY COUNCIL MEMBERS: Lorry McKaskle . Ernest McGowen. Sr. . George Greanias . Rodney Ellis . Fronk 0. Mancuso . John G. Goodner . Christin Hartung Dole M. Gorczynski . Ben T. Reyes' Jim Westmoreland . Eleanor Tinsley' Jim Greenwood' Anthony W. Hall. Jr. . Judson Robinson. Jr. . CllY CONTROLLER: Lance Lalor June 16, 1986 -- z:: C r- i! L: ~ ,- 1 'i r= r! - ~---~ Mr. Jack Owen LaPorte Area Water Authority P.O. Box 1115 Laporte, Texas 77571 J UN ') 0 ~OQ" '''' l"uQ CITY :;;~oFFiCE SUbject: Capital Cost Sharing Southeast Water Purification Plant Dear Mr. Owen: I appreciated the opportunity to meet with you and the Board Members of the LaPorte Area Water Authority last Wednesday evening to discuss the status of the Southeast Water Purification Plant and to answer the various questions raised about capital cost participation in the project. The following points summarize our discussions: 1. We have received bids for construction of the Southeast Water Plant and expect to execute a construction contract and issue a notice to proceed with construction within the next two months. 2. The general conditions for capital cost participation in the Southeast Plant are outlined in the agreement with Webster previously submitted to you. We would expect that all capital cost participants would have a proportional "voice" in establishing the operating budget of the facility; and that, while there is no true "equity ownership" in the plant, each participant would have the right to transfer capacity, resell water, and utilize its "share" of the capacity in much the same way that it would had the plant actually been constructed and owned by the participant. 3. Our current contract form obligates each participant to pay a proportional share of the plant operations and maintenance 'costs based on water actually used. Thus, there is not "take or pay" provision for operations and maintenance costs. Each participant would have "right of first refusal" to participate in any future plant expansion projects, but would not be obligated to do so. Mr. Jack Owen Ju ne 16, 1986 Page 2 4. Our recommendation that the Authority seriously consider participation in the Southeast Plant is based on the acceleration of the schedule for construction of this plant, our belief that the project represents the most cost-effective approach to providing water to the LaPorte area, and our realization that our long-range surface water resources are limited and that this limitation will require us to seriously re-evaluate raw water contracts in approximately 10 years. 5. We would be happy to entertain a specific proposal from the Authority concerning a schedule of capital payments, provisions for assuring future capacity in the event of unexpected growth, and participation by the City in certain planning activities already accomplished by the Authority. At your request, I am enclosing information concerning interest rates and redemption schedules for the recent City's recent revenue bond issue. 6. While our plans for extension of treated water lines are not yet firm, and depend in part on the interest of other potential customers, it is possible that the City would request that the line serving the Authority be increased in size to meet other needs. In this case, participation by the City (or another customer) in the cost of the line would be possible. 7. The layout of your service area suggests that only two of your possible members (Seabrook and El Lago) might benefit by exploring an alternate point of delivery from the Southeast Plant system. The options facing these communities are not yet entirely clear, and it is possible that they might also best be served through a redistribution system operated by the Authority. While the points above summarize our general discussions, they should not be construed as modifying or expanding upon any future contractual agreement which might be entered into between the City and the Authority. Again, I enjoyed meeting with you last week, and trust that the information provided will be helpful to the Authority as it weighs options for surface water delivery to the area. Truly yours, ~~. -;.~ 1 ....-'~. 4'Y/ "." -,.. ~:. ........I:=------ Michael S. Marcotte, P.E. Assistant to the Director Department of Public Works MSr1:pr cc: Mr. Cecil Allen (' OFFICIAL STATEMENT $193,610,000 City of Houston, Texas Water System Prior Lien Revenue Bonds Series 1986 This Official Statement provides certain information in connection with the issuance by the City of the Bonds. The Bonds are authorized to be issued under certain provisions of Vernon's Texas Civil Statutes, as amended, and an ordinance adopted by the City Council on May 21, 1986 (the "Ordinance"). Certain provisions of the Ordinance are summarized herein, Certain terms not defined herein are defined in the Ordinance and under the caption "Excerpts from the Ordinance:. PURPOSE OF FINANCING The Bonds are being issued for the construction, expansion and renovation of the City.s water system (the "System'.) and for the additional purpose of refunding a portion of the City's Water System Prior Lien Revenue Bonds, Series 1983 (the "Series 1983 Bonds"). The proceeds of the Bonds (net of that portion issued for refunding purposes, and issuance costs) will be applied to the construction of the City.s new Southeast Water Treatment Plant (the "Southeast Plant") and to other projects in the Fiscal Year 1986-1990 Capital Improvement Plan (the "CIP"). THE BONDS Description The Bonds are dated May Ib, 1986; bear interest from that date payable semi-annually on June 1 and December 1 of each year, commencing December 1, 1986; and mature on December 1 in the years and in the principal amounts set forth on the cover page of this Official Statement. The Bonds are issued as fully registered bonds in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds is payable by check or draft mailed by the Paying Agent/Registrar on or before each Interest Payment Date to the registered owners of record as of the 15th day of the month next preceding the Interest Payment Date. The principal, redemption price, and any accrued interest at maturity or redemption of the Bonds shall be payable on presentation and surrender at the principal corporate office of the Paying Agent/Registrar. Optional Redemption The Bonds maturing on and after December 1, 1997. are subject to redemption prior to maturity at the option of the City on and after December 1, 1996, in whole or in part at any time, at the following redemption prices, plus accrued interest to the dute of redemption. Redemption Period (Dates Inclusive) Redemption Price December 1, 1996 to May 31, 1997 .............................. June 1, 1997 to November 30, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 1. 1997 to May 31, 1998 .............................. June 1, 1998 to November 30, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 1, 1998 and thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 % 101.5 101 100.5 100 If less than all of the Bonds are to be so redeemed, the City may select the maturity or maturities to be redeemed. If less than all of the Bonds of any maturity are to be redeemed, the particular Bonds of such maturity or portions thereof to be redeemed shall be selected by lot or other random method in integral multiples of $5,000. In selecting for redemption portions of Bonds in denominations larger than $5,000, each such Bond wil! be treated as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond by $5,000. Mandatory Redemption The Bonds maturing on December 1, 2016 are subject to mandatory redemption prior to maturity OP. December 1 in each of the years and in the respective principal amounts set forth below, in each case at a redemption price equal to 100% of the principal amount plus accrued interest to the date of redemption, if any. Year Amount 2011. ... .. . .. . ... .............................. 2012......................................,... . 2013.......................................... . 2014. ... .... ........... ........... ............. 2015.......................................... . 2016.......................................... . $12,995,000 14,040,000 15,160,000 16,370,000 17,685,000 19,100,000f f Final maturity Notice of Redemption In the case of either optional or mandatory redemption, notice of such redemption identifying the numbers of the Bonds or portions thereof to be redeemed shall be given to the registered owners thereof by first class mail at least 30 days prior to the date fixed for redemption. Ownership The City, the Paying Agent/Registrar, and any other person may treat the person in whose name any Bond is registered as the absolute Owner of such Bond for the purpose of making and receiving payment of the principal thereof and premium, if any, thereon, and for the further purpose of making and receiving payment of the interest thereon, and for all other purposes, whether or not such Bond is overdue. Neither the City nor the Paying Agent/R~gistrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Owner of any Bond in accordance with the Ordinance shall be valid and effective and shall discharge the liability of the City and the Paying Agent/Registrar for such Bond to the extent of the sums paid. Transfers and Exchanges So long as any Bonds remain Outstanding, the Paying Agent/Registrar shall keep the Register at its principal corporate trust office in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of the Bonds in accordance with the terms of the Ordinance. Each Bond shall be transferable only upon the presentation and surrender thereof, accompanied by an assignment duly executed by the owner or his authorized representative in form satisfactory to the Paying Agent/Registrar. Upon due presentation of a Bond for transfer, the Paying Agent/Registrar is required to authenticate and deliver in exchange therefor, within 72 hours after such presentation, a new Bond or Bonds, registered in the name of the transferee or transferees, in authorized denomina- tions and of the same maturity and bearing interest at the same rate as the Bond or Bonds so presented. All Bonds shall be exchangeable upon the presentation and surrender thereof at the principal corporate trust office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in aggregate principal amount equal to the unpaid principal amount of the Bond or Bonds delivered for exchange. Any Bond issued on transfer or in 2 .--~.. _....7,. :" l (4) 10.123% of the maintenance and operation expenses of the Wallisville salt water barrier at the mouth of the Trinity River (the "Wallisville Project"), if and when it becomes operational; (b) All debt service of CW A bonds ($172,000,000 outstanding as of June 15,' 1986); (c) All debt service ofTRA Livingston Project bonds ($72,805,000 outstanding as ofJune 15, 1986); and (d) If completed, 16.168% of the capital costs of the Wallisville Project to be amortized over a period of 50 years plus interest thereon at the rate of 3.222%. Rate Covenant The City has covenanted in the Ordinance that so long as any Bonds remain Outstanding, it will fix, charge and collect amounts based on rates and charges for the use and services of the System which are calculated to be fully sufficient t(\ produl't' Net Revenues in each Fiscal Year, as defined in the Ordinance, at least equal to the sum of: (a) 120% of the principal and interest requirements scheduled to Occur in such Fiscal Year on all Prior Lien Bonds then Outstanding plus an amount equal to the sum of all deposits required to be made to the Prior Lien Bond Reserve Fund in such Fiscal Year; plus (b) 110% of the principal and interest requirements scheduled to Occur in such Fiscal Year on all Junior Lien Bonds then Outstanding. In no event shall Net Revenues ever be less than the amount required to establish and maintain the Prior Lien Bond Interest and Sinking Fund and the Prior Lien Bond Reserve Fund as provided in the Ordinance, to maintain the Junior Lien Bond Interest and Sinking Fund and the Junior Lien Bond Reserve Fund as provided in the Ordinance, and to the extent that funds for such purposes are not otherwise available, to pay all other outstanding obligations payable from the Net Revenues of the System as and when the same become due. The City has also covenanted that it will not grant or permit any-free service from the System except for public buildings and institutions operated by the City. Flow of Funds All Gross Revenues of the System must be deposited as collected into the Revenue Fund. Money from time to time on deposit to the credit of the Revenue Fund shall be applied as follows in the following order of priority: (a) First, to pay Maintenance and Operation Expenses, and to provide by encumbrance for the payment of all obligations incurred by the City for Maintenance and Operation Expenses and to establish and maintain an operating reserve equal to one month's estimated Maintenance and Operation Expenses; (b) Second, to make all deposits into the Prior Lien Bond Interest and Sinking Fund; (c) Third, to make all required deposits into the Prior Lien Bond Reserve Fund; (d) Fourth, to make all required deposits into the Junior Lien Bond Interest and Sinking Fund and Reserve Fund; (e) Fifth, to make all required deposits into the Renewal and Replacement Fund; (f) Sixth, to use for any lawful purpose. 4 l;;j::;;': bond reserve fund sufficient to provide for the accumulation therein of the increased reserve requirement by not later than 60 months from the date of the issuance or such additional bonds. The City also reserves the right to issue bonds, notes or other obligations secured in whole or in part by liens on Net Revenues that are junior and subordinate to the liens on Net Revenues securing payment of Prior Lien Bonds for any lawful pu,rpose, as well as revenue bonds secured by liens on and pledges of revenues and proceeds derived from Special Projects. Net Revenues Available for Debt Service The following schedule sets forth the Net Revenues of the System for the Fiscal Years ended June 30, 1985, 1984 and 1983, and for the six months ended December 31, 1985, and was prepared by the City Controller in conformity with the provisions of the City of Houston.s ordinances authorizing its water revenue bonds. This Schedule, as it relates to annual periods, was derived from the Statements of Revenues, Expenses and Changes in Fund Equity of the Water Revenue Fund which are presented in a combining fonnat with the City's other Enterprise Funds in the City's Comprehensive Annual Financial Reports for the respective Fiscal Years. This schedule should be read in conjunction with Appendix A of this Official Statement. 6