HomeMy WebLinkAboutOrd 306-2007 Relating to Bonds Proposed to be issued and Delivered by GTUA.pdfORDINANCE NO. 30(.-.20 7
AN 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, dated as of April 17, 2006 (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 (in whole or in part) 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 2007 (Collin/Grayson Water Transmission Project)" (the "Bonds"), the
Texas Water Development Board (the "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 (the "Pipeline Project") attached to the Resolution of the Authority
authorizing the Bonds (the "Bond Resolution"); now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS:
SECTION 1. The facilities to be constructed, acquired, and improved by the Authority
with the proceeds of the Bonds for the Pipeline Project described in Exhibit A hereto and in
Exhibit A attached to the Bond Resolution are hereby approved. The use of the proceeds of the
Bonds, as described in Exhibit A to the Bond Resolution, is hereby approved. The Bond
Resolution is approved as to form and content, and the City 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 under and pursuant to the Contract. The City agrees to provide the reports
described in the Bond Resolution within the times specked therein, in compliance with the
Board's commitment. The City agrees with the obligations and conditions set forth in the
Board's Commitment 06-103, as amended. 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, acquired, and improved in full accordance
with the provisions of the Contract mentioned in the preamble hereof. To the extent required by
the Board or the Office of the Attorney General of Texas, the Authority is authorized by this City
Council to make changes and revisions to the Bond Resolution from the form approved by this
ordinance in order to expedite the delivery of the Bonds. It is the intent of the City to authorize
45842675.2110614682 S-1
the Authority to proceed with the construction, acquisition, and improvement 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 ii the Authority and the City agree such modification should be made.
SECTION 3. The City hereby acknowledges that it is a "Participating City" in the
Pipeline Project, together with the Cities of Howe, Texas, Melissa, Texas, and Van Alstyne,
Texas (each also a "Participating City"). As a Participating City, the City hereby agrees that
during the "Non -flow Months" (defined in the Worksheet attached hereto as Exhibit C, which
Worksheet is incorporated by reference into this Ordinance and made a part hereof for all
purposes), the City shall make payments to the Authority, under the Contract, sufficient to pay
25% of the total debt service due on the Bonds (together with 25% of all other payments, fees,
and charges due to the Authority under the Contract), and, furthermore, shall, during "Flow
Months" (also defined in Exhibit C), make payments to the Authority, under the Contract, in
amounts sufficient to pay that portion of the debt service due on the Bonds, (which may be
expressed as a percentage of the total debt service due on the Bonds) equal to the City's
fractional share thereof, calculated upon the basis set forth in Exhibit C and described under
"Pipeline Project Contract (Debt Service) Obligation during Flow Months" (together with the
same fractional share of all other payments, fees, and charges due to the Authority under the
Contract).
SECTION 4. In all respects the Contract is re -approved and shall be and remain in full
force as the agreement of the parties.
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458426'15.3
PASSED AND APPROVED, this the 23`d day of January, 2007,
ity of Anna, Texas
ATTEST:
lQL. X4f�ti
City ecretary
Ci of Anna, Texas
OF An
(City Seal)V'L, �v
y
EXHIBIT A
. ... .... •:• T... :. • •.
Construction, acquisition, and improvement of water system facilities, to include: a
pipeline with diameters between 18 inches and 36 inches beginning on the north side of the city
of McKinney, Texas, near the intersection of Wilmeth Road and Skyline Drive. This line extends
eastward along the city of Irving, Texas, water transmission line right-of-way to a pump station
site to be located near the intersection of State Highway 5 and F.M. 543. A pump station and
ground storage reservoir will be constructed at that site and the treated water will be repumped
into a second pipeline with diameters between 16 inches and 30 inches.
The second line will continue eastward along the city of Irving water transmission to the
east right-of-way line of the Dallas Area Rapid Transit ("DART") rail right-of-way (formerly S&P
rail right-of-way). From that point, the proposed pipeline will extend northward through the cities
of Melissa, Texas, Anna, Texas, Van Alstyne, Texas, and terminate at a water storage reservoir
adjacent to the existing city of Howe, Texas, water storage facilities.
45842675.2!10614682 A-1
COMMITMENT OF THE TEXAS WATER DEVELOPMENT BOARD
45842675.2110614682 B-1
A RESOLUTION OF THE TEXAS WATER DEVELOPMENT BOARD
APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE
IN THE AMOUNT OF $6,520,000
CONSISTING OF THE PURCHASE OF
$6,520,000 GREATER TEXOMA. UTILITY AUTHORITY,
CONTRACT REVENUE BONDS,
PROPOSED SERIES 2007-
(06-103)
WHEREAS, Greater Texoma Utility Authority (the "Authority'), on behalf of the Cities
of Howe, Van Alstyne, Anna and Melissa (the "Cities"), has filed an application seeking -
financial assistance in the amount of $6,520,000 from the Texas Water Development Funds to
finance improvements to the Cities' water systems; and - -
WHEREAS, the Authority seeks financial assistance from the Texas Water Development
Board (the `Board") in the amount of $6,520,000 consisting of the Board's purchase of
$6,520,000 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, in.accordance with Section 17.124 of the Texas Water Code, as revised, the
Board has carefully considered all matters required by law and in particular the following:
1. the needs of the area to be served by the water supply project, the benefit of the
water supply project to the area, the relationship of the water supply project to the
overall, statewide water needs, and the relationship of the water supply project to
the approved regional and state water plans; and
2. the availability of revenue to the Authority, from all sources, for the ultimate
repayment of the cost of the water supply project, including interest. -
WHEREAS, the Board hereby finds:
1. that it has approved a regional water plan for the region of the state that includes
the area benefiting from the project and that the needs to be addressed by the
project will be addressed in a manner that is consistent with the approved regional
and state water plans;
2. that the public interest requires state assistance in the water supply project;
3. that in its opinion the revenue pledgedbythe Authority will be sufficient to meet
all the obligations assumed by the Authority during the succeeding period of not
more than 50 years;
4. that the Authority and the Cities have adopted and implemented a program of
water conservation forthe 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; and
5. that the current water audit as required by Texas Water Code §16.0121 has been
completed by the Authority and filed with 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 GreaterTexomaUtility Authority, on behalf of
the Cities of Howe, Van Alstyne, Anna and Melissa, for financial assistance in the
amount of $6,520,000 from the Texas Water Development Funds to be evidenced by the
Board's purchase of $6,520,000 Greater Texoma Utility Authority, Contract Revenue
Bonds, proposed Series 2007. This commitment will expire November 30, 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 obligations 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 rho 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 pmceeds.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(6) of the
Internal Revenue Code;
10. that this commitment is contingent on a future sate 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 their water and sewer systems sufficient to pay the Contracting
Parties obligations secured by and made payable from the revenues derived from.
the operation of their 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 the Contracting Parties for the Executive Administrator's review;
and
16. that the loan is approved for funding under the Board's pre -design funding option
as specified in Board rule 31 TAC §363.16, and initial and future releases of funds
are subject to all rules of the Board relating to such funding option.
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,
andPoliciesof the Texas Water Development Board.
APPROVED and ordered of record this the 14th day of November 2006.
TEXAS WATER DEV
EL
OPMENT BOARD
E.G. Rod Pittman, Chairman
ATTEST:.. - - -
7.W d -� -
Executive Administrator
EXHIBIT C
GREATER TEXOMA UTILITY AUTHORITY— PIPELINE PROJECT WATER AND DEBT
SERVICE COSTS ALLOCATION WORKSHEET
Each Participating City has entered an Amended and Restated Contract for Water
Supply and Sewer Service with the Authority ("Service Contract'. Under the Service Contract,
a Participating City makes a monthly payment to cover (i) debt service costs on Authority
obligations issued to finance improvements to the Participating City's system and (ii) other
costs. With respect to the period of time commencing when any Authority obligations relating to
the Collin/Grayson Water Transmission Project (the "Pipeline Project") are issued and
outstanding ("Pipeline Bonds") until water has been delivered to each Participating City for three
(3) calendar months (and during any period of time thereafter [upon a monthly basis, with part of
a month being considered a whole month] when water is not flowing to each Participating City)
("Non -flow Months'), each Participating City shall be charged under its Service Contract a debt
service component in respect of the Pipeline Project equal to 25% of the total debt service due
in that fiscal year of the Authority, payable in monthly amortization payments as set forth in the
respective Service Contracts. For example, if total debt service in the Authority's fiscal year
2007 will be $200,000, and if all of the Authority's fiscal year 2007 consists of Non -flow Months,
each Participating City will make Service Contract payments totaling $50,000 within such fiscal
year of the Authority for Pipeline Project debt service (exclusive of other Service Contract costs
due), payable in monthly amortization payments.
Pipeline Water Rates:
From the time water has been delivered to each Participating City through the Pipeline
for one month and forward, on a monthly basis, each Participating City shall be charged for
water at the greater of its minimum take -or -pay amount under the Potable Water Supply
Contract made and entered between such Participating City and the Authority ("Water
Contract') or the actual amount of water taken, also as specified in each Water Contract.
Pipeline Protect Contract (Debt Service) Obligation during Flow Months:
From the time water has been delivered to each Participating City through the Pipeline
for three (3) months (i.e., beginning in the fourth month in which water has flowed through the
Pipeline to all Participating Cities) and forward and while water continues to flow to each
Participating City, upon a monthly basis ("Flow Month'J, each Participating City shall be charged
its percentage (or, fractional) share of debt service on Pipeline Bonds to be paid in the following
month based upon: the amount of water to be paid by such Participating City under the Water
Contract (numerator) divided by the total amount of water to be paid by all Participating Cities
under the Water Contract. The sum of the four (4) fractional amounts shall always equal 100%
of the debt service on the Project Bonds to be paid by the Authority.
For Example: In month 5, assume the aggregate minimum take -or -pay is 800,000
gallons. In the aggregate, 1,000,000 gallons are delivered. (For water, each Participating City
pays the greaterofits take -or -pay or the cost of the. water taken, as set forth in the Water
Contract.) Assume $20,000 is the aggregate month] v amortization amount of debt service to be
paid on Pipeline Bonds. Each Participating City's share of the total debt service obligation is as
follows:
45e42762.311MMU C-1
Participating
City
Minimum Take-
or -pay Amount
- Gallons-
Month 5
Actual
Amount
Taken -.
Gallons-
Month 5
Amount of
water to be
paid for in
month 6
under Water
Contract
Percentage of
debt service
liability based
upon water to be
paid for under
Water Contract
Pro -rated
amount of
debt service
paymentdue
in month 6
Anna
200,000
350,000
350,000
33.3%
$6,660.00
Howe
150,000
100,000
150,000
14.3%
$2,860.00
Melissa
300,000
400,000
400 000
38.1%
$7,620.00
Van Alst ne
150,000
150,000
150,000
14.3%
$2,860.00
-------r$-20,000.00
Total
800,000
1 1,000,000
1 1,050,000
1 100.0%
$20000.00
Additional Exam les changing only the amount of water actual) taken:
Participating
City
Minimum Take-
or -pay
Amount-
Gallons-
Month 6
Actual
Amount
Taken-
Gallons-
Month 6
Amount of
water to be
paid for in
month 7
under Water
Contract
Percentage of
debt service
liability based
upon water to be
paid for under
Water Contract
Pro -rated
amount of
debt service
payment due
in month 7
Anna
200,000
150,000
200,000
25.00%
$5,000,00
Howe
150,000
100,000
150,000
18.75%
$3750.00
Melissa
300,000
250,000
300,000
37.5%
$7,500.00
Van Als ne
150,000
100,000
150,000
18.75%
$3,750.00
-------r$-20,000.00
Total
BOO 000
600 000
800,000
1100.0%
$20,000.00
Participating
City
Minimum Take-
or -pay
Amount-
Gallons-
Month 7
Actual
Amount
Taken-
Gallons-
Month 7
Amount of
water to be
paid for in
month 8
under Water
Contract
Percentage of
debt service
liability based
upon water to be
paid for under
Water Contract
Pro -rated
amount of
debt service
payment due
in month 8
Anna
200,000
300,000
300,000
27.3%
$5460.00
Howe
150,000
0
150,000
13.6%
$2,720.00
Melissa
300,000
450,000
450,000
40.9%
$8,180.00
Van Als ne
1501000
200,000
200,000
18.2%
$3,640.00
-------r$-20,000.00
Total 1800,000
950,000
1,100,000
100.0%
44042M.3110614682 C-2