Travis County Commissioners Court
May 10, 2005
Road District #3
Good afternoon, let's call to order the northwest Travis County road district no.3, otherwise known as the golden triangle. We do not have any claims or investments. Therefore we do not need item no. 1. 2. Approve n.w.t.c.r.d.#3 minutes for voting sessions of April 5, April 12 and April 26, 2005.
>> move.
>> second.
>> all in favor? That passes by unanimous vote. With director Davis absent today. 3. Consider and adopt an order authorizing the issuance and sale of northwest Travis County road district no. 3 (golden triangle) unlimited tax refunding road bonds, series 2005; levying a tax and providing for the security and payment thereof; approving the official statement, purchase contract and escrow agreement; calling certain bonds for redemption; and enacting other provisions relating thereto. Our lawyers have been working. As this language shows.
>> good afternoon.
>> good afternoon, judge. I知 lad patillo the financial advisor for the county and road district. Some time ago you authorized us to prepare to do a current refunding and authorized us to allow first southwest company who is represented today by gary kimball on my far right and jennifer douglas to underwrite it. We had to wait until we got close to June 1st or actually 90 days prior to the call date, which is September 1st, and that really falls on a weekend of June 3rd, to clean and I have this set up to close on the 9th. That's still under federal tax law considered a current refunding, so it doesn't fall under all of the onerous rules of the advanced refunding statute. So we have hit the market last Thursday, when we got this out and it was -- it was insured by capital assurance, which means that we got a -- a triple a rating. The road district itself, which golden triangle as i've always said to you, I like to call the world's only successful road district. Got an a 1 rating, I have never seen a special district get an a 1 rating of any type. I was very happy with that, capital insurance insured the bonds, we have sold them as triple a's. I would like to turn it over first to gary kimball, glen will talk you to the documents.
>> thank you, Commissioners, judge.
>> how are you doing?
>> for the record I知 gary kimball with first southwest company. We've handed out a special pricing summary which should be familiar to you, similar to its content in what you have seen before on county refundings. We have included an interest rate draft as the first page to just give you some idea in terms of where rates have been over the last 10 years, where we are relatively speaking and as you can see, we are still at very attractive levels in the market. In fact if you go back and calculate, rates have been higher 98% of the time over the last 10 years than where they are today. So that obviously helps drive the economics, which are presented on the second page of your handout, got a debt service comparison, the gross debt service savings is $359,000 and a net present value comes in at $239,000 or 5.87% of the principal amount of the refunded bond. That is really into the money based on the parameters that we have discussed over the past few months in connection with county transactions, 3% has been sort of the threshold that we have used in connection with prior transactions, this one is almost double that level. So obviously a very attractive transaction would point out on the next page which is entitled page 2 of the pricing summary, your net interest cost is a 3.69% and that compares with a rate on the old bonds of over 5.5%. And so that's really where the savings comes from in large measure. We've included a sources and uses and debt service schedules that show the actual payments on the new bonldz, but we are taking out all of the existing bonds for the road district on this series and so the new schedule will substitute for the old debt service on the bonds and with that I will be happy to answer any questions that you might have.
>> did we extend out, gary, in terms of when these bonds were going to be finished, callable, I mean finished? Is it the same length of time?
>> the schedule has been left intact. The original mall maturity dates remains the same even with the new refund.
>> we had a lot of folks from, property owners in this district who were always asking us when is it time, when is it time? So I知 really pleased that our financial team brought us forward at the first opportunity that we really had to pass on some of the good savings that are out there in the market. Finally we can pass it on them in terms of the debt service in this market.
>> as you will recall, we first issued these bonds in '89. Then refinished them in '96 with an advanced refunding, which in federal tax law you can only do that once. We had to wait this time until the occurrence, until the call date. We have been able to lower those each time as we go. One thing that I did want to point out, if you are looking at the sources of funds, since we are so late into the year and you have already collected the taxes for the -- for the '05 payment, that money has moved into the fund to pay the -- the September 1, '05 payment.
>> so when we set the tax rate for this district come budget time lad, I mean generally speaking we are setting the rate simply to make the debt coverage, is this going to lower their rate for next year?
>> over the last three years, the -- the assessed value in this, since it's totally commercial, has gone down. That's why we had four years ago or three years ago we had a 15-cent tax rate. Then went to 16, used some of the debt service we had on hand to kind of buy it down. This would lower it back to the 15 range. At that same assessed valuation level. But art corey tells me that all of the commercial properties in this area, in this district are going to probably go up 10 to 15% this year. The commercial properties are on the rebound.
>> that's good.
>> any other questions?
>> for some, but -- [laughter]
>> not for the ones --
>> a healthy road district is a good road district.
>> I would remind, also, that the reason, as Commissioner Sonleitner pointed out is that all we collect, all of the -- all the county collects from this district to do, no maintenance and operation, is to just pay this debt service, so -- so while the person's value may go up or down, the amount they get hit to pay for their portion of the debt is it always stays the same dollar-wise.
>> there was a time I guess when trammell crow remembers quite nicely, when this was like a dollar something. There was nothing in this road district. Then the arboretum happened and gateway happened. So a lot of good stuff happened in the triangle instead of the bermuda triangle it became the golden triangle.
>> I知 very happy with the way it turned out. And actually we priced it Thursday and they were able to -- they would hold that bid over till today with the bond purchase agreement, asking you to approve and Friday the market ran up on us about 8 basis points. So I mean we got in ahead of that bump up.
>> judge, I would move approval of everything under item no. 3 in terms of what action items we need to do.
>> okay. Sorry. Didn't mean to cut you off.
>> I知 with vinson-elkins, the item you have before you is with the adoption of the order. I believe you have that in your backup material. The order that's before you is that order with just the pricing information that's reflected in the materials that you have gotten today inserted in it. With that I will answer any questions, if you have any. Ms. Douglas?
>> good to be here?
>> it's good to be here. Thank you.
>> lad, thanks to our leadership there's been phenomenal growth in this road district. [laughter] any more discussion? Our staying out of the way of that growth by the way. All in favor? That passes by unanimous vote.
>> move adjourn.
>> judge, I would like to ask before you adjourn that we coordinate all of this with p.b.o. Just like on all of your bond issues, this is the third refunding that we have done in the last eight months on various things for the county and the road district. And we couldn't to -- my assistant and I couldn't do it without all of the help we get from the tax office, also the county auditor's office, they really cooperate very well with us, thank you.
>> thank you.
>> goodman: motion to adjourn.
>> second.
>> all in favor? That passes unanimously. Thank you all very much.
>> thank y'all.
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Last Modified:
Wednesday, May 11, 2005 8:12 AM