Travis County Commissioners Court
September 21, 2004
Item 41
That is number 41 and they have an opportunity that is time sensitive. 41
is consider and take appropriate action on request to authorize staff and
financial add visitor and certain underwriters to proceed to investigate and
develop a plan to refinance various county bonds to achieve economic savings.
After the introductions, the opportunity is [indiscernible]
>> I’m the financial advisor, and with me this morning I
have jodi giles op my right and his colleague gary pot erand gary kim ball
from first southwest company who you've dealt with in the past. What we're
here to talk to you about is there are probably 8 or 9 series of bonds that
you have outstanding that have certain maturities out there with could coupons
at a high enough range if we did advanced funding at this point in time we
could probably say the county somewhere in between a million and a half, two
million dollars n. Debt service over the next several years. I just brought
these along to show you that first albany and both first southwest have been
giving me proposals and showing me numbers, we've been following this, but
the way the market has been going up and down in our range, you know, by the
time I get one, david sent me some numbers one time that looked really good
and I was going to come to you and the market moved and it didn't look good
anymore and it's been doing this. We all do believe right now the time sensitive
nature is the bias on interest rates is upward. We've been in this range for
about three years where the interest rates have been sometimes on the municipal
bonds lowest 40 to 45 years. I think, gary, you were just telling me yesterday
over the bond buyer index, the bmi, the one we look at in the bond market
right now is probably lower than it's been what, 8 of the last ten years?
So, we all know if you read the morning paper, the fed is looking at raising
the fed funds right again. After the election, regardless of the outcome,
whatever happens we feel that things are maybe going against us and I hope
not too much since I know you have your own county bond issue right after
the first of the year. But this gives us an opportunity to save some money
and all I wanted to do this morning was to ask you to give me these folks,
glen opel, christian smith's folks, the green light to put something together
and bring back to you and see if we can catch this market and refund these
bonds. If, jodi, if you would like to say a few words, I would like to say
jodi and david got to me first, we've always had a way of rewarding folks
that bring us the idea. I've known jodi a long, long time, and he does actually
into some of the underwriting groups for me, when I serve on the Texas veteran's
land board and he ease done a lot of good issues and I would recommend that
these two firms be appointed to do this type of an underwriting if we can
make it work and that -- that first albany get a chance to run the books on
this one. Jodi?
>> well, first and foremost, we've been monitoring the debt
for quite some time. This is an opportune time. David has been doing all the
work and i've been reviewing it. So david has all of the details. If you give
half a unit, boy, I shower like to congratulate-- oh sure like to congratulate
yellow on the performance based economic development activity. That is outstands.
Congratulations. I apologize for the sidebar, but congratulations again. I’m
sorry.
>> just appreciate the opportunity to be working with you
again. We jeef underwritten several of the county's past bond issues and I
think we can do a good job for you again.
>> how quick can all of this get turned around, if we're
trying to catch the wave before it breaks? Anticipation of this, i've begun
working on a document. I will have to get to the rating agencies but they
can do that rather quickly on a refunding issue. We're actually lowering our
debt service, nothing we have to visit with them about eye to eye, and I think
we can probably turn it around in maybe three to four weeks.
>> okay.
>> they have brought us a deal who basically contract with
that team to carry it out. Initiate the deal ourselves or think it up think
it up then we compete?
>> yes,.
>> so consistent with our practice and I think which is a
good inwritten policy, in this time we would award the contract to the team
that has done the work. We have quite a bit of work that still needs to get
done to pull this off.
>> the process is we would come back to you on the day after
we priced, I would of course not price letting you know we would be going
to market. You are not ultimately committed to cellular bonds to these two
firms until the day you pass this bond order and sign the document.
>> so in layman's language, you basically would refinance
the same things but at a lower interest rate.
>> exactly.
>> thereby generate savings so we're paying yes, sir?
>> yes, sir. We can actually get much lower rates on many
of those maturities and what we've done in the past we've actually tried to
look for 3% present value savings. That is an p.o. We had numbers run yesterday.
A 3% present value savings right now by targeting that, we can do about 42
and a half million. If we lowered that a bit, if we think market is going
to move away from us for a new cycle and who knows, cycles can run 3 to 7
years, if it's going to move away from us, maybe we lower that target and
take what savings we can have. Savings are savings.
>> what day do you lock in the interest rate.
>> on the day we price the bonds which would probably be
on a Monday before we come to you on Tuesday.
>> how long do you think...
>> three or four weeks from now. We'll go as quickly as we
can.
>> okay. Questions or comments?
>> one of those things that you don't have to ask. You have
the -- you have the confidence -- I mean obviously we do. And I agree. Who
is going to have crystal balls and sometimes who is looking into them. The
way these rates are, I’m glad you're on top of them.
>> be authorized to proceed. Discussion? Thank y'all very
much.
>> judge, show me abstaining, due to the previous comment
with my son.
>> we understand, Commissioner.
>> I have to abstain on this one.
>> Commissioner Davis abstains. Voting in favor is Commissioner
Sonleitner, Commissioner Gomez, Daugherty an yours truly. Kristen, thank you
for your pair shens. -- patience. [indiscernible]
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Last Modified: Thursday, October 27, 2005 9:40 AM