HomeMy WebLinkAboutOrd 288-2006 Relating to Bonds Proposed to be issued by GTUA.pdfAN ORDINANCE by the City Council of the City of Anna, Texas, relating to
bonds proposed to be issued and delivered by the Greater Texoma Utility
Authority, approving the issuance thereof, and the facilities to be constructed or
acquired by such Authority.
WHEREAS, the Greater Texoma Utility Authority (the "Authority") and the City of Anna,
Texas (the "City"), have previously executed and delivered an Amended and Restated Contract
for Water Supply and Sewer Service (the "Contract") whereby the Authority is to provide water
and sewer services to the City;
WHEREAS, under Section 4.15 of the Contract, it is provided that the City shall approve
the issuance by the Authority of any bonds that are to be payable from certain moneys that the
City has contracted to pay under the provisions of the Contract;
WHEREAS, in connection with the proposed "Greater Texoma Utility Authority Contract
Revenue Bonds, Series 2006" (Cities of Anna and Melissa Project) (the "Bonds"), the Texas
Water Development Board has agreed, pursuant to an Application Requesting Financial
Assistance (the "Application"), to purchase the Bonds and, therefore, it is neither necessary nor
advisable for the Authority to prepare a Notice of Sale because, insofar as the City is
concerned, the Application contains sufficient information to accomplish the purpose of a Notice
of Sale; and
WHEREAS, the net effective interest rate on the Bonds will not exceed fifteen percent
(15%) per annum and it is now appropriate for this Council to approve the Application (in lieu of
approving a Notice of Sale with respect to the Bonds) as well as the issuance and delivery of
the Bonds and the facilities to be constructed or acquired with the proceeds of the Bonds for the
Project described in Exhibit A attached to the Resolution of the Authority adopted
September 18, 2006 (the "Bond Resolution"), authorizing the Bonds; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS:
Section 1: The facilities to be acquired and/or constructed by the Authority with the
proceeds of the Bonds for the Project described in Exhibit A attached to the Bond Resolution
are hereby approved. The use of the proceeds of the Bonds, as described in Exhibit A attached
to the Bond Resolution, is hereby approved. The Bond Resolution is approved as to form and
content and the City of Anna acknowledges that the payment of principal of and interest on the
Bonds is payable, in whole or in part, from payments to be made by the City of Anna under and
pursuant to the Contract. The City agrees to provide the reports described in Section 21 of the
Bond Resolution within the times specified therein. The City agrees with the obligations and
conditions set forth in the Board's Commitment 06-72 including, without limitation, to make
payments pursuant to the Contract in the amounts specified in Section I.F. of the Application
with respect to "Series A" as referred to therein as approved by the Commitment. A copy of
such commitment is attached hereto as Exhibit B.
Section 2: It is the purpose and intent of the City Council of the City to approve the
Bond Resolution, and the facilities to be constructed or acquired in full accordance with the
provisions of the Contract mentioned in the preamble hereof. To the extent required by the
Texas Water Development Board or the Office of the Attorney General of Texas, the Authority is
authorized by this City Council to make changes and revisions from the form approved by this
45820141.1/10511848
ordinance in order to expedite the delivery of the Bonds. It is the intent of the City to authorize
the Authority to proceed with the construction or acquisition of the facilities at the earliest
possible date, but nothing herein shall be construed as a limitation upon the right and power of
the City to approve a change in the facilities for which the Bonds are to be issued (but not the
purpose for which the Bonds are to be issued as set forth in the Bond Resolution), the City
specifically reserving the right to modify the facilities for which the Bonds are being issued if the
Authority and the City agree such modification should be made.
Section 3: The Contract is amended to include the definition of Project attached
hereto as Exhibit A. A copy of Exhibit A shall be attached to the Contract, as Exhibit A.
Additionally, the Contract is reapproved and shall be and remain in full force as the agreement
of the parties.
45820141.1/10511848 2
PASSED AND APPROVED, this �i L day of -Sc , 2006.
``-Mayor
City of Anna, Texas
ATTEST:
City ecretary
Cit of Anna, Texas
OF
(Seal) °�'� .. • 2',',
45820141.1!10511848 S-1
EXHIBIT A
PROJECT DESCRIPTION
The Project consists of the design and construction of sanitary sewer system
improvements for the Throckmorton Creek and Trinity River drainage basins, located within the
City Limits of Melissa and Anna, Texas. The project will serve the Cities of Melissa and Anna,
Texas. Phase I of the Project, a 21 -inch interceptor along the southern end of the service area,
was constructed in 2001. Two additional phases of design and construction of sanitary sewer
improvements in the Throckmorton Creek and Trinity River drainage basins are proposed under
the current project. Phase II consists of design and construction of the northern portion of the
project. Phase II improvements will be constructed and connected to Phase I improvements.
Phase III of the project consists of constructing a new interceptor parallel to Phase I
improvements.
45820141.1/10511848 A-1
COMMITMENT OF TEXAS WATER DEVELOPMENT BOARD
45820141.1/10511848 B-1
E. G. Rod Pittman, Chairman Jack Hunt, Vice Chairman
William W. Meadows, Member J. Kevin Ward Thomas Weir Labatt III, Member
Dario Vidal Guerra, Jr,, Member Executive Administrator James E. Herring, Member
August 17, 2006 '?ECEIVPD
Mr. Jerry W. Chapman, General Manager AVG 2 1 20%,,
Greater Texoma Utility Authority
5100 Airport drive GTUA.
Denison, Texas 75020
Re: Texas Water Development Board Loan Closing Requirements
Dear Mr. Chapman:
The Texas Water Development Board (Board) would like to thank the Greater Texoma Utility
Authority /Cities of Melissa and Anna (Authority) for utilizing the Board's financial assistance
programs. On August 15, 2006, the Board approved the Authority's financial assistance request
of $7,300,000 from the Clean Water State Revolving Fund.
The loan will be evidenced by the Board's purchase of $3,870,000 GTUA Contract Revenue
Bonds, Proposed Series 2006 and $3,430,000 GTUA Contract Revenue Bonds, Proposed Series
2007. The loan commitment will expire on August 31, 2008. Rates used in the Board
approval for this commitment are for illustrative purposes only. A signed copy of the Board
resolution and the News Release are enclosed.
Prior to closing, the Authority's bond counsel must submit, for Board approval, two (2) copies of
the following: draft bond counsel's legal opinion, the No Litigation Certificate, the No -Arbitrage
Certificate and the proposed resolution authorizing the bondsrp for to adoption of the resolution
by the Authority's governing body. Please forward all closing documents to Mr. Mike Smith as
he will handle the loan closing.
After Board staff has reviewed the information, the Authority should submit a letter stating that it
has sufficient funds to construct the project and request a loan closing and release of planning
phase funds. At that time, the Authority's bond counsel or financial advisor should request
interest rates from the Board and the Authority should adopt the bond resolution. After adoption
of the bond resolution, please instruct bond counsel to forward a certified copy to the Board.
When all of the above requirements have been satisfied, including all conditions of the Board's
commitment resolution, a loan closing date will be scheduled.
Our Mission
To provide leadership, planning, financial assistance, information, and education for the conservation and responsibh
P.O. Box 13231 • 1700 N. Congress Avenue • Austin, Texas 78711-3231
Telephone (512) 463-7847 • Fax (512) 475-2053 • 1-800-RELAYTX (for the hearing impaired)
www.twdb.state.tx.us • info@twdb.state.tx.us
TNRIS - Texas Natural Resources Information System • www.tnris.state.tx.us
A Member of the Texas Geographic Information Council (TGIC)
water for Texas.
Mr. Jerry W. Chapman
August 17, 2006
Page 2
Please be reminded that the environmental review and the engineering feasibility report must be
approved before design and construction funds are released. The remaining design and
construction funds will be placed in an escrow account until the bid documents are approved and
executed construction contracts are contingently awarded. Please refer to the Planning Phase
section of the Program Guidance Manual for further guidance.
The team that will be managing the Authority's project consists of the following Board staff.
Mr. Gene Davis, Environmental Reviewer, 512-475-2060
Mr. Bill Murray, Engineer Reviewer, 512-463-8505
Mr. Mike Smith, Financial Analyst, 512-936-2193
Ms. Marisol Saenz, Attorney, 512-463-0643
The Board looks forward to working with the Authority to help make this a successful project. If
you have any questions or desire any additional information, please feel free to contact the
aforementioned team members or myself at 512-463-7779.
Sincerely,
JeW r
Team ead/Financial Applications
Policy and Program Development
JW/sbh
Enclosures
cc w/enc.: Mr. Mark Westergard, Bond Counsel, Fulbright & Jaworski
Mr. Garry Kimball, Financial Advisor, First Southwest Company
Mr. Robert Helmberger, Engineer, R&B Associates, Inc.
Mr. Mike Wynne. -.Legal Counsel, Nal1,'Pelley & Wynne
cc w/o enc.: The Honorable Craig Estes, Texas Senate
The Honorable Jodie Laubenberg, Texas House of Representatives
bcc: Inspection and Field Support Services
Audit and Funds Manager
A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD
APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE
IN THE TOTAL AMOUNT OF $7,300,000
CONSISTING OF THE PURCHASE OF
$3,870,000 GREATER TEXOMA UTILITY AUTHORITY
CONTRACT REVENUE BONDS, PROPOSED SERIES 2006 AND
$3,430,000 GREATER TEXOMA UTILITY AUTHORITY
CONTRACT REVENUE BONDS, PROPOSED SERIES 2007
(06-72) ,
WHEREAS, Greater Texoma Utility Authority (the "Authority"), on behalf of the Cities
of Melissa and Anna (the "Cities"), has filed an application seeking financial assistance in the
total amount of $7,300,000 from the Clean Water State Revolving Fund to finance improvements
to the Cities' wastewater systems; and
WHEREAS, the Authority seeks financial assistance from the Texas Water Development
Board (the "Board") in the total amount of $7,300,000 consisting of the Board's purchase of
$3,870,000 Greater Texoma Utility Authority, Contract Revenue Bonds, proposed Series 2006
and $3,430,000 Greater Texoma Utility Authority, Contract Revenue Bonds, proposed Series
2007, all as is more specifically set forth in the application and in recommendations of the
Deputy Executive Administrator for the Office of Project Finance and Construction Assistance,
to which documents express reference is made; and
WHEREAS, the Board hereby.finds:
1. that in its opinion the revenue pledged by the Authority will be sufficient to meet
all the obligations assumed by the Authority;
2. that the application and assistance applied for meet the requirements of.the
Federal Water Pollution Control Act, as amended (33 U.S.C. 1251 et seq.) and
state law;
3. that the Authority will consider cost-effective innovative methods of treatment;
and
4. that the Authority has submitted a proposed program of water conservation for the
more efficient use of water that will meet reasonably anticipated local needs and
conditions and that incorporates practices, techniques or technology prescribed by
the Texas Water Code and rules of the Board.
NOW, THEREFORE, based on said considerations and findings, the Texas Water
Development Board resolves as follows:
A commitment is made by the Board to Greater Texoma Utility Authority, on behalf of
the Cities of Melissa and Anna, for financial assistance in the total amount of $7,300,000
consisting of the Board's purchase of $3,870,000 Greater Texoma Utility Authority,
Contract Revenue Bonds, proposed Series 2006 and $3,430,000 Greater Texoma Utility
Authority, Contract Revenue Bonds, proposed Series 2007. This commitment will expire
August 31, 2008.
Such commitment is conditioned as follows:
1. that the bond counsel opinion must include an opinion that the interest on the
obligations is excludable from gross income or is exempt from Federal income
taxation. Bond counsel may rely on covenants and representations of the issuer in
rendering this opinion;
2. that the bond counsel opinion must include an opinion that the obligations are not
"private activity bonds." Bond counsel may rely on covenants and representations
of the issuer on rendering this opinion;
3. that the resolution authorizing the issuance of the obligations must include that the
proceeds of the obligations and the facilities financed with the proceeds. of the
obligations will not be used in a manner that would cause the obligation's to be
"private activity bonds;"
4. that the resolution authorizing the issuance of the obligations must include that the
issuer will comply with the provisions of Section 148 of the Internal Revenue
Code of 1986 (relating to arbitrage);
5. that the resolution authorizing the issuance of the obligations must include that the
issuer will make any required rebate to the United States of arbitrage earnings;
6. that the resolution authorizing the issuance of the obligations must include that the
issuer will take no action which would cause the interest on the obligations to be
includable in gross income for Federal income tax purposes;
7. that the transcript must include a No Arbitrage Certificate or similar certificate
setting forth the issuer's reasonable expectations regarding the use, expenditure
and investment of the proceeds of the obligations;
8. that the transcript must include evidence that the information reporting
requirements of Section 149(e) of the Internal Revenue Code of 1986 will be
satisfied. This requirement is currently satisfied by filing IRS Form 8038 with the
Internal Revenue Service. A completed copy of IRS Form 8038 must be provided
to the Executive Administrator prior to release of funds;
9. that the Authority will not cause or permit the obligations to be treated as
"Federally Guaranteed" obligations within the meaning of Section 149(b) of the
Internal Revenue Code;
10. that this commitment is contingent on a future sale of bonds or on the availability
of funds on hand;_
11. that the resolution authorizing the issuance of obligations will state that
obligations can be called for early redemption only in inverse order of maturity,
and on any date beginning on or after the first interest payment date which is 10
years from the dated date of the obligations, at a redemption price of par, together
with accrued interest to the date fixed for redemption;
12, that the Authority, or an obligated person for whom financial or operating data is
presented either individually or in combination with other issuers of the
Authority's obligations or obligated persons, will, at a minimum, covenant to .
comply with requirements for continuing disclosure on an ongoing basis
substantially in the manner required by Securities and Exchange Commission
(SEC) rule 15c2-12 and determined as if the Board were a Participating
Underwriter within the meaning of such rule, such continuing disclosure .
undertaking being for the benefit of the Board and the beneficial owner of the
Authority's obligations, if the Board sells or otherwise transfers such obligations,
and the beneficial owners of the Board's bonds if the Authority is an obligated
person with respect to such bonds under SEC rule 15c2-12;
13. that the resolution authorizing the obligations contain a provision that the
Authority will maintain rates and charges to -the Contracting Parties sufficient to
meet the debt service requirements on the outstanding obligations of the Authority
that are supported by such revenues, and that the Authority will require in its
contracts with the Contracting Parties that the Contracting Parties maintain rates
and charges for its water and sewer systems sufficient to pay the Contracting
Parties obligations secured by and made payable from the revenues derived from
the operation of its water and sewer systems;
14. that prior to closing, the Authority will submit documentation evidencing the
adoption and implementation of sufficient system rates and charges or, if
applicable, the levy of an interest and sinking tax rate sufficient for the repayment
of system debt service requirements;
15. that upon request by the Executive Administrator, the Authority shall submit
annual audits of Contracting Parties for the Executive Administrator's review;
16. that prior to or at closing, the Authority shall pay to the Board a 1.85 percent
origination charge calculated pursuant to Board rules;
17. that the loan is approved for funding under the Board's pre -design funding option
as specified in Board rule 31 TAC §375.39, and initial and future releases of funds
are subject to all rules of the Board relating to such funding option;
18. that prior to closing, the Authority shall submit an executed consulting engineer
contract, the form and substance of which is satisfactory to the Executive
Administrator of the Board; and
19. that prior to closing: (a) the Authority shall adopt and implement the program of
water conservation as approved by the Board; and (b) the Authority shall include
in its contract with the Contracting Parties a requirement that the Contracting
Parties adopt a water conservation plan that complies with Board rules and that is
approved by the Authority.
PROVIDED, however, the foregoing resolution is subject to the following additional
requirements prior to funding of the loan: .
1. issuance of a written approving opinion of the Attorney General of the State of
Texas stating that all of the requirements of the laws under which said obligations
were issued have been complied with; that said obligations were issued in
conformity with the Constitution and laws of the State of Texas; and that -said
obligations are valid and binding obligations of the issuer; and
2. compliance with all applicable requirements contained in the Rules, Regulations,
and Policies of the Texas Water Development Board.
APPROVED and ordered of record this the 15th day of August 2006.
TEXAS WATER DEVELOPMENT BOARD
�J G!�/
�-
E.G. Rod Pittman, Chairman
ATTEST:
J evin Ward
Executive Administrator