Travis County Commissioners Court
December 6, 2005
Item 22
22. Consider and take appropriate action to approve resolution regarding section 147(f) approval for delivery of loan for the financing of education facilities within Travis County, Texas for st. Edward's university.
>> good morning, I知 harvey Davis, manager for the corporation. Him here with our -- I知 here with our attorney cliff blunt and edward mccourse to my left who is representing st. Edward's university. And mayor mays, the assistant manager for the corporations. St. Edward's university is asking the Commissioners court to approve a resolution that -- that okays a five $445 million loan from frost bank. This loan is being fansed through the saint leanas education facilities corporation. With a qualified tax exempt obligation. These qualified tax exempt obligations are limited to $10 million per issuer and because Travis County and its corporations issues more than $10 million a year, then they went to san leanna instead of to the Travis County education facilities corporation. This is the second part of a financing project. The first one was approved by the court in may of 2004. And in June of this year, the corporation adopted some policies in which a processing fee equal to 10 basis points of a financing is charged for the Commissioners court to approve a project in Travis County in which the -- in which the Travis County education facilities corporation is not the issuer. So the 10 basis points is 1/10th of 1%. That fee would be $5,445. The st. Edward's is here to request that the Commissioners court reconsider this fee and mr. Mccourse, if it's of course, will give the reasons.
>> good morning. As mentioned this is phase 2 of the building project out there. These are dorms on the st. Edward's university campus. Rightly or wrongly, we were not aware that the Commissioners court had passed this additional fee. I guess back in June. And learned of it this week. Since this is part of a phased project, we are seeking a one-time waiver of that one-10th of 1% fee in this instance.
>> is there some hardship that is -- you know, I would feel really uncomfortable that we make an exception for one very worthy organization and every single one of these I think somebody could make the exact same argument. It's a very small fee and we decided to pass it because it's just the idea that, you know, to get our approval on these kinds of things we were not getting any other kind of financing, we established something very, very modest. I could understand if you all were doing a $50 million authorization, but I feel very uncomfortable, there were good reasons why we established the policy. It seems like I would hate to want to pick and choose, we love st. Edward's, which we do, but there have been others that have had to pay that fee that were equally as worthy if we said well, we love you, too. So ... Establishes for good public policy purposes and I don't think it's a deal killer in terms of -- of doing this. [indiscernible] at this point.
>> can you tell me, I知 sorry, Commissioner --
>> I知 finished, thank you.
>> can you tell me what the first loan was? I guess the one that you acquired in may of 2004.
>> yes, in may of 2004 --
>> can you give me background information on what you are doing, just give a little background, a little catchup information, please.
>> yes, your honor. In may of 2004 they began on a project to build some more dorms on the university campus. Updated dorms. They have got some older dorms that were built approximately 30 years ago. And so in may of 2004 they came before the court and began the process. At that time they got the approval to get the loan through the eanna financial corporation, through the construction, update of utilities. This is the second phase, this is a separate building, but phase two of the project. This is a 78 bed, two story -- two story, actually two buildings, but one complex dormitory. What you have got is a plan at saint ed's to try to improve and update the housing provided to students on campus.
>> what did we do in may of 2004 as far as you coming in, requesting us to -- to I guess bless it and tell the-back over there, hey, we kind of support what they are doing and what's different except for the -- except for the -- for the fee that's been upon the -- upon the 10 basis point fee, 1/10th of 1%, that's different than -- is that the only difference in what we did then as far as what we are doing now? I know there's been a policy change apparently, I知 just trying to look at this, it was a two phase -- it was a two step project, apparently it was two phases. This phase 1 and then this is a continuation I guess of the completion of that project, is that correct or incorrect.
>> that's correct. This is phase 2 of the project.
>> phase 2. I guess at that time were the court aware of it being a two phase project opposed to this is a one-time thing, you come here and of course we did not assess, I don't think we assessed any fee. I guess I need to ask that question. Was any fee assessed in may of 2004, harvey?
>> no, sir.
>> okay, it was no, okay. That's my concern. Would the court I guess then aware of the fact that this was a two phase project as opposed to a one phase project? Was that brought to the court's attention.
>> I can answer that.
>> can you do that, please.
>> I think the court was aware that it was in the backup. The reason for the two phases was because the total amount or one reason, the total amount was going to be over the $10 million. So that was one reason to divide it up. But it was a two step project and the board was aware of it at that time.
>> my next question I guess is the one that you brought up as far as that answer, less than $10 million being the cutoff points, if it's less than $10 million, we looked at policy change, but I guess I didn't want to get caught up in the middle of this and I guess have this been -- have there been other -- other projects that we have dealt with that are in phases that we did not -- when the policy changed, there was not a fee, but since the policy has changed that there is a fee but yet there were phases of the project; has anybody out there in a phased mode as far as projects are concerned that we know currently that we are dealing with?
>> I know goodwill came to the Commissioners court before the policy change, and that may be one that they are planning in phases.
>> what did we do about that?
>> that was approved -- it was prior to June of 2004 when this -- when this policy was adopted.
>> so -- so goodwill come -- come on their return, what will be looking at basically the same thing?
>> yes, sir. Have we been asked to waive the fee for the policy --
>> we have not been asked to waive the fee.
>> paid the fee.
>> one entity has paid the fee since the policy was adopted.
>> okay.
>> that was out of the health facilities corporation.
>> so st. Edward's position on the fee is what? Obviously no payment is better than paying one percent of one percent.
>> yes.
>> one 10th of 1%.
>> 25,000 bucks.
>> $5,400 in this case.
>> 5,000 bucks.
>> why would you like to see the fee waived other than to save $5,000.
>> really, the only reason is we are not asking for permanent exception, just a waiver in this instance since this was part of a phased program we have been talking about and brought up prior to the time of the implementation of the fee.
>> what fee will you pay san Leander for issuing the bonds for you, do you know that?
>> I don't have that figure.
>> do you have a sense.
>> I don't. I thought that I had it in these documents but I do not.
>> is it more than $5,000?
>> I don't have that figure. I just don't.
>> you believe they are waiving that fee for you?
>> they are not. This is -- the only -- your honor, I want to make -- we are not asking and saying that this is a hardship and that this is a situation, I am not up here to plea and try to -- to justify it based on any reason other than this was a phased project that was begun prior to the implementation of the fee. I知 not trying to pit the university against several other worthy entities. It's just a matter of making this request based upon the timing of our project and the timing of the implementation of the fee.
>> I think if san leeana was waiving its fee, I知 with you. They are not. One of the reasons we wound up doing this is that because of the requirements on some of these things, we were being avoided, people were having to go other ways to get these done. We were gaining nothing for our permission to sign-off on this. We thought that there was a very modest way that we could say you know what, we need to be we, the corporations, need to be accommodated here because this was an issuance cost. These were fee that's we could not have gotten going through us. So there was a reason that we tried to stop the bleeding on all of these because there were so many things being issued. Not only just by san leanna, creedmore has their little thing going on, a bunch of them up in the dallas area. You know what, there was a reason we came up with this policy. Again san leanna is not waiving its fees for you. I don't know.
>> are we posted to waive the fee? Did you read that?
>> [indiscernible]
>> you put consider and take appropriate action. The fee is tied into this kind of thing. Can I just add one other thing that I haven't heard mentioned, there's a lot of time, not a lot of time, but there's some time that I have put in on reviewing the documents, I know that mary and [indiscernible] put in time as county employees. There's administrative cost, the fact that your time has been spent reviewing this matter this morning.
>> would you like for us to approve the resolution even if we don't waive the fee?
>> yes, your honor.
>> I move approval of the resolution regarding section 147 f for delivery of loan for the financing of education facilities within Travis County, Texas for st. Edward's university.
>> second.
>> seconded by Commissioner Gomez. Any more discussion? I think that this sets us on a path where we don't waive the fee. Unless there are like compelling circumstances. All in favor? That passes by unanimous vote. Good luck to you.
>> thank you.
>> anything further on this item?
>> no, sir.
>> thank you all very much.
>> thank you all.
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Last Modified:
Wednesday, December 7, 2005 7:31 AM