HomeMy WebLinkAboutItem 09 - Certificates of ObligationJ
MEMO TO:
FROM:
MEETING DATE:
SUBJECT:
RECOMMENDATION:
ITEIYI A►
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
ROGER NELSON, CITY MANAGER���
DECEMBER 3, 2002
RESOLUTION DIRECTING PUBLICATION OF A NOTICE OF
INTENTION TO ISSUE CERTIFICATES OF OBLIGATION
City Council to consider approving a Resolution directing publication of a Notice of
Intention to issue Certificates of Obligation in the amount of $3,500,000.
FUNDING SOURCE:
Future issue of Certificates of Obligation for the purpose of acquisition of authorized
vehicles and equipment; for acquisition of real property; and, for issuance costs for
refunding bonds.
BACKGROUND:
This item is placed on the agenda pursuant to direction from Bond Counsel in order to
meet necessary requirements for selling Certificates of Obligation. Funding from the sale
of the Certificates will be used as follows:
To acquire vehicles and equipment authorized for purchase in the FY 2003 Budget.
To acquire two parcels of property. One piece of property is the old GTE building, located
at 402 South Barton Street, a parcel of 0.369 acres and including two buildings ($215,000).
The second parcel is a parking lot located at the Southeast corner of Main Street and
Franklin Street, a parcel of 0.6652 acres (estimated cost $368,000).
Thirdly, Bond Counsel advises that in order to get an optimum rate for the refinancing of
$10,970,000 of General Obligation Bonds, it is recommended that the bond sale will be a
negotiated sale, which will require issuance costs to be paid from par amounts of the
bonds. It is necessary, therefore, to add an additional amount of $300,000 to the notice to
allow for this additional debt.
The amounts and uses for the CO's stated in the Notice of Intention are as follows:
Authorized Vehicles and Purchases (FY 2003 Budget) $1,618,107
Bronto Fire Apparatus 951,210
Real Property 583,000
Refunding Bond Issuance Costs 300,000
CO Issuance Costs 47.638
Total Debt Issuance $3,500,000
The sale date for the Certificates of Obligation is scheduled for January 7, 2003, along with
the fourth sale of bonds from the December 1998 bond election and a General Obligation
Refunding sale to refinance $10,970,000 of General Obligation Bonds, which can be
refinanced at a more optimum rate. The refinancing is estimated to save the City in excess
of $500,000 over the life of the bonds.
If approved by the Council, the required notice will be published December 5, 2002 and
December 12, 2002. A copy of the notice is attached.
Staff recommends approval.
A RESOLUTION RELATING TO THE GIVING OF NOTICE
OF INTENTION TO ISSUE CITY OF GRAPEVINE, TEXAS
COMBINATION TAX AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2003 AND PROVIDING AN
EFFECTIVE DATE
WHEREAS, the City of Grapevine, Texas (the "City"), pursuant to Subchapter C,
Chapter 271, Texas Local Government Code, as amended, is authorized to issue its certificates of
obligation for the purpose of paying contractual obligations to be incurred for the purposes set
forth below; and
WHEREAS, the City Council of the City has found and determined that a notice of
intention to issue certificates of obligation should be published in accordance with the
requirements of applicable law;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF GRAPEVINE, TEXAS, THAT:
Section 1. The findings and determinations set forth in the preambles hereto are
hereby incorporated by reference for all purposes.
Section 2. The City Secretary of the City is hereby authorized and directed to issue a
notice of intention to issue certificates of obligation in substantially the following form:
NOTICE OF INTENTION TO ISSUE CITY OF
GRAPEVINE, TEXAS COMBINATION TAX
AND REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2003
"NOTICE IS HEREBY GIVEN that on January 7, 2003, the City Council of the City of
Grapevine, Texas, at 7:30 p.m. at a regular meeting of the City Council to be held at the City
Hall, 200 Main Street, Grapevine, Texas, the regular meeting place of the City Council, intends
to pass an ordinance authorizing the issuance of not to exceed $3,500,000 principal amount of
Certificates of Obligation for the purpose of paying contractual obligations to be incurred for the
following purposes, to wit: (i) acquisition of the GTE building located near the intersection of
Falls Street and Barton Street for various municipal services of the City; (ii) acquisition of land
and a parking lot in downtown Grapevine for City parking and City festivals, and improvements
thereto; (iii) acquisition of equipment and vehicles for police department; (iv) acquisition of
equipment and a fire truck for fire department; (v) acquisition of equipment and a vehicle for
public works department; (vi) acquisition of equipment and vehicles for utility department,
(vii) acquisition of equipment and golf carts for City golf course; (viii) acquisition of computers,
hardware, software and related equipment for various City departments (collectively, the
GRA32511
Resolution giving notice of intent to issue bonds
"Project"); and (ix) to pay for professional services of attorneys, financial advisors and other
professionals in connection with the Project and the issuance of the Certificates. The Certificates
shall bear interest at a rate not to exceed fifteen percent (15%) per annum, and shall have a
maximum maturity date of not later than forty (40) years after their date. Said Certificates shall
be payable from the levy of a direct and continuing ad valorem tax against all taxable property
within the City sufficient to pay the interest on this series of Certificates as due and to provide
for the payment of the principal thereof as the same matures, as authorized by Subchapter C,
Chapter 271, Texas Local Government Code, as amended, and from all or a part of the surplus
revenues of the City's waterworks and sewer system, such pledge of surplus revenues being
limited to $1,000.
"THIS NOTICE is given in accordance with law and as directed by the City Council of
the City of Grapevine, Texas.
"GIVEN THIS December 3, 2002.
/s/ Linda Huff
City Secretary
City of Grapevine, Texas"
Section 3. The foregoing notice shall be published once a week for two consecutive
weeks, the date of the first publication being not less than the fourteenth (14th) day prior to the
date set forth in the foregoing notice for passage of the ordinance authorizing the Combination
Tax and Revenue Certificates of Obligation. Such notice shall be published in a newspaper of
general circulation in the area of the City of Grapevine, Texas.
Section 4. That this resolution shall take effect from and after the date of its passage.
PASSED, APPROVED AND EFFECTIVE
-2-
GRA325/1
Resolution giving notice of intent to issue bonds
PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 3rd of
December, 2002, by a vote of ayes and _ nays at a regular meeting of the City
Council of the City of Grapevine, Texas.
Mayor, City of Grapevine, Texas
ATTEST:
City Secretary, City of Grapevine, Texas
• a a a 1 2 K0 I 1 [0) • kyj I
L-8
City Attorney, City of Grapevine, Texas
Signature Page for Resolution