Travis County Commissioners Court
Tuesday, April 26, 2011 (Agenda)
Items 7, 8, 9, and 10
>> we're back from our recess.
we going to go ahead with item 7 8, 9 and 10.
item 7 is consider and take action on an order authorizing issuance and sale of Travis County Texas unlimited road bonds series 2011 in the aggregate principal amount of $3 765,000, levving a tax and pavement thereof, approvaling a bond purchase contracts, the official statement and enacting other provisions relating there to.
wown at a time or should I read all of them?
>> john, can they take them at once?
>> she can.
>> okay, item 8, consider and take action on an order authorizing sale of permanent improvement bonds limited tax in the aggregate principal amount of $1,855,000leavying a tax and payment thereof, approvaling a purchase contract, the oh statement, and enacting other provisions relating there to.
item 9, consider an order issuing a sale of certificates of obligation series 2011 limited tax in the aggregate principal amount of approximately $2,000, approving a purchase contract, approving the official statement and enabble acting other provisions relating there to.
the final amount will be discussed in a moment.
item 10, consider and take action on an order authorizing the issue and sale of Travis County, Travis County, certificates ol gages, taxable series 2011, limited tax, in the aggregate principal amount of $22,600,000, and that number will also be discussed, leavying a tax and payment thereof, approvaling a purchase contract, approving the official statement and enacting other provisions relating there to.
>> thank you, we're here to bring you the good news of the sale yesterday which was conducted by our underwriters first southwest company, represented today by richard ramirez to my right.
the sale was successful.
I want to introduce the others, tim from benson and elkins is here, and of course from pbo, I want to thank you all the work we get out of the tax and auditors office and others helping us the prepare and get the information to mart.
we published the statement and it was very well accepted.
triple a by moody and standard and poors, woth with stable outlook.
as of last Tuesday the united states government aa outlook was lowered to negative so we have a better rating than the federal government right now.
and the sale went very well yesterday.
the taxable c.
on owes, which are your item number 10, were oversubscribed so we were able to go back in and lower the interest rates because we had in some cases five times as many buyers as we had, or bidders, you know, as we had bonds or co's.
so the onth thing I want--other thing is I want you to I know, mentioned the proximal amounts.
the amounts are more than we expected because of the offset.
when you are operating in an environment as low as the rates are for us, in the case of the taxables it's a bit higher than we were anticipating.
it's 22,715 but that was on the ten-year taxable bonds at low interest rates.
our true cost is 344, a tremendous reception in the market.
I would like to turn it over to richard ramirez and I may have stolen some of your details to speak about the sale.
>> thank you, lad, that is quy okay.
I wish all my clients were aaa because selling the bonds and telling the story is quite easy for Travis County.
the market for municipals has not been very favorable.
if you have seen the press we have been berated quite a bit.
fortunately in the last week or so we see improvement in the treasuris and some, since the negative outlook on the u.s.
debt, some slight quality which helped improve rates from when we started out looking at the transaction.
fortunately a 3.44 interest rate is very favor able, I think the majority of the folks wish they could get those kinds of rates.
we were ecstatic to market the deal for you to do this trade.
we appreciate the business.
I'm happy to answer more questions or give you and color.
specifically in the market, we went aggressive on the rates from Thursday.
because of a long weekend buyers are not quite ready early Monday to gauge.
nothing really happened in terms of a critical event that caused us to change thoughts from Thursday when we actually had a call to say these are the expected rates.
so we ended up actually leaving the rates the same, actually improved it on the taxable because we did get five times the orders for some of the maturities.
so we adjusted those basis points for the taxable and the overaldeal.
I'm happy to take questions.
we appreciate the confidence in letting us do this and appreciate the work of our associates.
I'm happy to take any questions.
>> richard, I'm looking at the 3.44 rate.
it really is an astoundingly good rate considering the market movements right now.
so would you say that with regard to our aaa bond rating, the fact we are obviously a really really good risk as far as paying back our debts.
>> right.
>> that now is the time to rent money for us?
>> I would think if you have more to do, I would say by all means.
and we would love to do it for you.
>> many of our constituents are concerned about our borrowing, what appears to be a glut of borrowing by the county.
in actual ty, if you look over our history, this is not an unusual borrowing pattern that we're in.
there isn't a spike.
you know, maybe we ought to have a spike, considering our enviable position right now.
but I'd like to hear from jessica or perhaps rodney.
just to put this in perspective, we're renting money.
but for projects that will be paid out over time so that we can spread the burden intergerngenerationally.
the burden of these infrastructure projects isn't all on today's taxpayer, it's spread out for, what is the term on these?
>> some of these bonds are out to 20 years.
>> right.
>> so I don't know if jessica would like to comment.
>> pbo, I did send an e-mail to the Commissioners court reminding you of the projects that you have approved already that are included in the certificates of obligation as well as the amounts that were included in the voter approved.
some of the projects, for example, include two 22 and a half million for the land for the courthouse, a portion of the be fit, our new financial system the court is going forward with and we're all working especially the auditor's office diligently on that project.
some additional funds for lavaca all long-term cos.
as land discussed.
we have other items that are just run of the mill yearly items that we need to keep up with.
improvements in our facilities, traffic signals, road improvements, et cetera.
>> and they are all necessary items for services to improve our services to our taxpayers.
but I think that one of the things that hasn't happened very much at the county, we don't really toot our horn when it comes to our financial status.
for nine years now we have gotten the aaa rating.
and so many thanks to the team that put that together.
and certainly lynn opal and lad, you all accompany us to the meeting with the bondage assist and help us understand their questions.
and also respond is to those questions.
we're very straight forward with those folks.
I think they could spot a hesitancy in our voice if we, in answering any questions.
they are tough and business like and I appreciate that very much.
and so we don't toot our horn enough.
when it comes to this sort of thing.
I think we need to do more of i.
>> I agree with you, Margaret, and I just want to stress that in an effort to explain what we are doing here, this is not a buying spree.
and if you look at our debt to revenue comparison as well as our debt to revenue projection for the next several years, for the next couple of decades, y'all have done an amazing job at spreading the burden so that that is a favorable comparison and a very stable comparison both in the past and future.
this is not a buying spree.
>> not at all.
>> one of the things too, just to remind the court, a few weeks ago when we were talking about doing the sale, we had talked about doing the taxable sale at 20 year which is what we would typically do for the purchase that we did.
but you know, with the advice of our financial advisers and in consultation with the county auditor, the recommendation was made to shorsten that to a ten-year period, translating into close to $10 million, I believe, in interest earning savings over the life of the bonds.
so we have looked at that.
as we run our debt model projections, we take great strides to ensure that we are at the very least working toward a flat debt service rate.
we do anticipate some fluctuation but not signature fluctuation--significant fluctuation.
I believe back in January we brought the innings to the court.
be happy to continue to update as you need to.
>> I'm very proud of our budget process as well.
we are very careful to not overuse the credit card.
>> we have a credit card?
>> no, but in essence when you overspend, you are overspending your credit card.
>> we are that conservative.
>> Commissioner Gomez, I'd just like to say to reiterate what Commissioner Eckhardt has said, as of yesterday, in the municipal bond market, nobody borrowed any money cheaper than we did in the united states.
so I'm very proud of that and proud of the county.
the county has a very strong financial position.
>> that says a lot about Travis County.
>> tim is here from benson elkins who has the resolutions with the exact amounts on the two co's, and if you would like to explain those, tim, that they accomplish what Commissioner Gomez read.
>> yes, these orders basically accomplish exactly what the action items present.
they authorize and approve the financial terms of the bonds.
the orders that we brought in this morning are in substantially the same form as those predominant usely disseminated to the existers with the only exception being the insertion of the final pricing information, as lad explained.
these orders also authorize and approve the execution of the bond purchase contracts between the county and the underwriters and approve the form of the official statements.
and I'm happy to answer any questions anyone might have.
>> no other questions.
can we approve these in one fell swoop?
>> yes, ma'am.
>> I move approval of 7, 8, 9, and 10.
>> second.
>> all those in favor.
precincts 2, 3 and 4 in favor.
>> Commissioner Davis abstain.
I have provided the clerk with my documentation for this abstention.
thank you.
>> okay.
>> thank you very much, Commissioners.
>> thank you.
>> congratulationss.
>> thanks very much.
>> thank you all.
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