Travis County Commissioners Court
March 8, 2005
Items 29 & 30
29, consider and adew point an order authorizing the issuance and sale of Travis County, Texas, limited tax refunding bonds, and an escrow agreement approving the at the nt.
>> excuse me, judge. You could also call up 30, we could take them together. 30, consider and adidn't an order authorizing the issuance and sale of Travis County unlimited tax refunding bonds series five, href sraoeg a tax in payment thereoff, authorizing the execution and delivery of a bond purchase agreement and an escrow disagreement. What is the difference between them?
>> judge, good morning judge and Commissioners, here to report on this --
>> is it limited and unlimited?
>> one is limited tax, the other the unlimited t limited tax bonds you issue or obligations are the certificates of obligation and the permanent improvement bonds generally what you do for buildings and parks. And the unlimited bonds that the counties can issue under state law are for roads and bridges. So we have to do them under separate series. We came to you on March 1st and laid out to you a potential refunding based on how the yield curve had changed which would allow us to get some savings for you. On the first page of the document we gave thaw says executive summary, it lays out on the left-hand side what we showed you that day, the analysis by first southwest and our other underwriters that worked on this, and we were looking at a net present value savings in dollars of just a little over 2 million. With a gross savings of 2,000,007. The market has gone in kind of like a saw-tooth pattern all through that time. We decided to price last Wednesday rather than waiting until yesterday because of the ---what was happening in market last week was scaring us so we priced it Wednesday and the results are what we see on the right- hand side of the page where the total amount of the issue was 84,415. The net present savings 2,000,625 and a gross savings of 4,000,687. So the gross savings to the county was quite a lot. Our target was three, and if you see where we came in on a blended between the two deals is 2.99. I think it's an excellent deal to grab. We couldn't refund everything that was potential because of the way the market moved. There's still about 20, 25 million out there that if for any reason there's some rally that comes up soon might be able to go back and get that. But I have with me glenn, who has the legal documents for you, and gary kimball, the lead banker on the deal. Gary, if you have anything to add.
>> just a quick thanks for letting us handle the transaction on behalf of the county. And we did get under a good amount of these bonds and hope that shows our commitment --
>> let me explain that. He's using market talk. When we priced these on Wednesday, it was a very tough day and by the afternoon there was roughly 25% of this that did not have buys' names attached. So first southwest and the other underwriters made a commitment to -- they were going to take that in. That's why we call them underwriters. They got under it and said we'll take it. And so they did. I don't think they've been hurt by that because the ups and downs in market, we don't want to see your bonds [inaudible] it doesn't do our reputation much go. Go ahead.
>> that's it. Just happy to be included and thanks for your support.
>> so for residents watching, what the county did was really to refinance outstanding debt at a lower interest rate.
>> yes, sir.
>> to take advantage of the market.
>> same thing people do when they refinance their house. We have made your phaeupltsz lower t second page just shows the principal and interest payoff and how it goes out smoothly through the years that you have to pay off. We still maintain an average payoff at less than 10 years. Actually it's closer to eight and a half or something like that which is we enjoy such good credit rating. Most counties have a 12-year.
>> we basically achieved what we could.
>> better than we thought we could when we spoke to you on February 1st.
>> questions, comments?
>> kudos to your and your staff for staying on top of this. There -r people who wrote articles on what Travis County had done and I guess that's the reason you get paid the big bucks to do this thing. Staying on top of this and as volatile as this market is, it really takes somebody that's staying on top of this to make these kind of things happen. Thanks for doing a good job.
>> I actually forgot I had sent you that article. We made the national bond buyer newspaper last week.
>> that was good.
>> it's not an idea that we had only. Part of the reason and there's a challenge in the market, everyone else in the marketplace that has been sitting on this opportunity for two to three years and couldn't do it, they can now do it as well. So the market is just flooded. Gary told me just as we came in, his underwriter, pete stair who worked on the pricing of this, priced 25 deals yesterday.
>> move approval of all of 29 and 30, limited and unlimited tax refunding bonds and authorize the appropriate members of the Commissioners court and other county officials to sign the voluminous documents that the lawyers have prepared. Discussion? Thank you very much.
>> don't bring it by my office because Commissioner Davis abstained from this particular vote. So don't bring the documents by my office. Move to second.
>> show Commissioners Gomez, Daugherty, Sonleitner and yours trulying voting in favor.
>> I am abstaining and I did supply the clerks with some affidavits. My [inaudible] is funded so thereof I cannot participate in this process. That passes by a 4-1 vote. One abstention. Thank you all very much. Appreciate it very much.
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Last Modified:
Wednesday, March 9, 2005 12:14 PM