Travis County Commissioners Court
May 4, 2010,
Item 31
31 is to consider and take appropriate action on an order authorizing the issuance and sale of travis county, texas, unlimited tax road bonds series 2010 in the aggregate principal amount of $3,555,000, levying a tax in payment therefore, approving a bond purchase contract, approving the official statement, and enacting other provisions relating thereto.
>> judge, on this, if you will refer back to the comments i made on the permanent improvement bonds, the par amount on this change is for the same reason those did, because of the way the couponing and all the work, we wound up with the par amount here being 3,000,610, 3,610,000. And these have an interest rate --
>> the true interest cost is 3.68% with an average life of 11.36 years.
>> questions, comments?
>> judge, before we -- as long as we're in the discussion phase, i would like to point out that we had -- the underwriters discount i told you that we would -- that's the negotiable part of this type of transaction. Also, that we were able to use the technique of working with the coupons, working with buyers, making sure that we could give them what they were looking for. Yesterday it worked out very, very well and the blended overall underwriters discount is about $5.08 a bond. Bond buyer newspaper had an article last week that says on the average most year most under writings are going at $6.46, and also if we had done -- in yesterday's market if we had taken bids on a competitive bid basis, it would have, in my opinion, been closer to $8 because of the risk people were taking of buying bonds in that market.
>> so 3.68 --
>> no, 5.08.
>> good work.
>> where did i get 3.68?
>> oh, that -- 3.68 was his -- was the yield on this last bond, was the average cost to you, but the underwriters discount, what we pay the underwriters, what they get paid for the transaction --
>> oh, okay.
>> -- was 5.08 and the national average over this -- the past 12 months is more like 6.46. So i think we got an excellent transaction and i appreciate the underwriters working with us on that.
>> move approval.
>> second? Discussion? Here we're changing 3,555,000 to $3,610,000.
>> i have a question, if you don't mind. With all this money just sloshing around, i just -- i wonder, is there -- is there any way that -- i mean, i never come across any kind of -- i go for coupons and things like that to save pennies, but how does this money -- is there some kind of sloshing fund that just kind of flows around and, well, we had a --
>> sloshing may not a good word on that. So the interest rate that we're given here compares to the market how? Is that your question?
>> yeah, i guess -- $105,000 difference, i don't understand.
>> how would you explain --
>> i would say compared to the market this is about the lowest interest rate you could earn because the safety is the high he did, and if -- highest, and if you were looking to protect the principal of your investment, one of these type of bonds or treasury, u.s. Treasury bond, frankly, i'd buy this today rather than a treasury bond, and they're very safe because of travis county's credit rating and credit record. If a person is looking to make a lot of money on their investments this isn't the body to buy. If you're the issuer, and all of the taxpayers in travis county this is a super deal.
>> all of these are directly connected with specific projects for which we don't have current cash, so we're borrowing.
>> uh-huh.
>> that's what this is.
>> okay.
>> this is 700 lavaca.
>> all right.
>> and the others are mostly road projects and other capital improvements.
>> well, thanks for your guidance.
>> we got a motion and second. Did we get a vote? All in favor. So commissioners, eckhardt, huber, and yours commissioner voting in favor.
>> davis abstaining because i have submitted the proper documents to our clerk, my son has a direct relation to one of the providers of this particular process. Thank you.
>> motion carries by a vote of 3-0-1, 1 abstention. Anything else?
>> no, thank you, judge. And congratulations, we'll close the bond issue on june the 8th and be cash in the bank for you.
>> thank you all for your --
>> richard --
>> i just want to add, judge and commissioners, i want to thank -- your finance staff for working closely with us to getting this trade executed for you.
>> thank you. We appreciate your help. And thank all of those that -- we retained our aaa rating from both firms. Let's make sure our consultants get paid on time this year. That's post-vacation humor.
>> [laughter]
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Last Modified:
Tuesday, May 4, 2010 1:50 PM
