Travis County Commissioners Court
June 6, 2006
Cultural Educational Facilities Finance Corporation
We have a well paid consultant, legal consultant here on the Travis County Cultural Educational Facilities Finance Corporation, so we need to call that one item up. Call that to order, and the one item is to consider and take appropriate action on request to have the processing fee chargeable to higher education finance corporation to obtain the permission of the Travis County Commissioners court to finance a facility located in Travis County.
>> good afternoon, I’m harvey Davis, manager for the corporation. And as you know, we have a processing fee that the corporation charges for the Commissioners court to get permission to issue bonds that are -- in which the issuer is not one of the Travis County corporations, but the facility is located in Travis County. And the orchard higher education corporation is planning to issue approximately $10 million of bonds to assist to not your ordinary charter school improvement programs. The fee would be approximately $5,000. It's 10 basis point of the amount of the issue. They have requested a waiver of the fee. In your backup is an e-mail from their attorney requesting a waiver of their fee. My recommendation to the board is that the board approve their request. I’ve listed two reasons. One is that the -- these bonds are bank qualified bonds, and the corporation would not be able to issue the bonds because of federal tax rules that say that if your entity, which includes the county government and all the corporations issue more than $10 million in a calendar year, then you could not issue any qualified bonds. The second reason is that they could -- as an alternative to getting the permission of the county government, they could go to the city government and obtain their permission and be able to issue the bonds and they wouldn't be charged the fee. So those are my recommendations. Their attorney from vin son and elkins and the executive director of the school are here and they are available to answer any questions.
>> questions?
>> one quick one. In terms of consistency with what we have done for others who have asked the exact same question -- and I think it was probably under the housing thing is what we did under westminster and there have been other things that have come up of people asking for the waiver. What has our stance been?
>> we have -- the westminster was not a bank qualified bond. There was one other situation, I believe it was for st. Edward's. And they asked for a waiver of the fee and the board denied the request. They did not -- they ended up not paying the fee because they went to the city and got the city's permission, and so the fee was never -- we denied it, but they went elsewhere and they were able to issue the bonds. So I think what I’m saying is the logic of this fee needs to be rethought and probably would come back with a recommendation of changes to this fee.
>> so in terms of the differences between this and some of the other requests is because this is a bank qualified issuance as opposed to some of the others where we've had requests and we might have reduced it some or just to the amount of hours worked by certain people. But this is not one of those. This is in a very, very, very rare category.
>> well, it's not that way. We've had several bank qualified people come and several were approved routinely because we didn't have the fee. Then we instituted the fee. Since then we've had one other -- the st. Edward's, which was a bank qualified. We didn't realize that they had the alternative of going to the city, quite frankly, so that sort of changes the whole, you know, rationale or logic for having this fee.
>> okay. Thank you.
>> and every time the board member passes their alma matter, she sort of drops her head because of that decision? [ laughter ]
>> [ inaudible ].
>> yes, right. Any more discussion? All in favor? That passes by unanimous vote.
>> move we adjourn.
>> second.
>> all in favor? That passes by unanimous vote also.
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Last Modified:
Wednesday, June 7, 2006 12:54 PM