Travis County Commissioners Court
Tuesday, July 6, 2010,
Item 1
Starting with number 1. 1. Consider and take action regarding: a. An order authorizing the issuance of travis county, texas, limited tax refunding bonds, series 2010, in the aggregate principal amount of not to exceed $35,000,000; levying a tax in payment thereof; providing for the award of the sale thereof in accordance with specified parameters; authorizing the execution and delivery of a bond purchase agreement and an escrow agreement; approving the official statement; and enacting other provisions relating thereto; and b. Authorization for the county judge to sign the documents after closing. We have been advised that we do not need b that. Is not a power -- that is not a power grab on the part of our county judge. But if we approve a then we have all of the necessary documents executed is what we have been advised. Is that --
>> that's correct, judge.
>> okay. So -- so --
>> good morning, judge, commissioners, lad patillo your financial advisor. We have been tracking this refinancing opportunity for the county's outstanding bonds for some time now. Last monday we did publish the preliminary official statement that's only offering document for these bonds. Currently, the way the market runs, you could -- depending on what day we can hit the market and we have no predictions on interest rates, but that we could save anywhere from 135 to $145,000 a year over the next 12 years for the county. That's why we do this. It's the same as why you would refinance the house, just to lower your payment. This process today would give us the parameters in which that we could sell the bonds, this -- this eliminates for us the necessity that we've had in the past on these type of transactions of actually pricing the bonds on a monday only because we have to bring it back to you the next day. Underwriters, when they give us a price on the bonds and price them, would not to hold it until over four or five days until your next meeting. Therefore by doing a parameters resolution or order as we presented to you, we could sell these bonds as early as tomorrow if the market is right or wednesday or -- or thursday or some other day thereafter. And then as long as we meet these parameters, then they -- we can close the deal.
>> let me explain that. Judge, commissioners, under chapter 1207 of the texas government code, chapter 1207 is a refunding statute, for a number of years, i think it may now go back almost 10 years, it has authorized the concept of a parameters order with a delegation. Whereby the -- the -- the commissioners court in this case would authorize the bonds set forth the fundamental or -- provisions of the bonds, but delegate to an officer of the court the authority upon pricing to sign a pricing certificate that will approve the pricing of the bonds. In this case, being anything from the interest rates, the redemption provisions, those things that are related to the market driven provisions of the bonds. To do that, the order sets out the maximum principal amount of bonds that may be issued at 35 million. It sets out the maximum interest rate as permitted bylaw. It also sets a narrower parameter that the yield on the bonds as computed for federal arbitrage purposes shall not exceed 4%. It also requires that for the authorized officer to be able to approve the pricing, the financing has to result in a debt service net present value savings of not less than 3%. So what -- what we do with this order is we'll set out the fundamental provisions of the bonds, which are pretty much the same as they have been for refunding bonds for the county. But then authorize in this case the county judge is the authorized officer upon pricing of the bonds to sign -- to sign a priengs certificate that identify -- pricing certificate that identifies and sets forth the pricing mechanisms of the bonds, maturities, interest rates and to sign a bond purchase contract with the underwriters.
>> a covers all of that.
>> a covers all of that.
>> okay. In laymen's language, we are authorizing you to test the market. And if we can realize a present day value savings of 3% interest, do the deal.
>> correct.
>> and we have been briefed two or three times before, but there may be questions. If so, they are ready to answer them. That's when you all perk up and look -- look --
>> [laughter]
>> right now what we have put on the front of the cover of the offering document is the numbers worked out to 29 million-two. The 35 just gives us some head room in case the interest rates were to change and the amounts change.
>> if no questions, i move approval of a.
>> second.
>> discussion of the motion? All in favor? Show commissioners eckhardt, huber, yours truly voting in favor.
>> commissioner davis abstains. My son is employed with first southwest, may have affiliation with this particular project and i submitted the proper documentation to the clerk, judge, to show --
>> okay.
>> support this abstention.
>> thank you.
>> thank you.
>> for those wondering, the law require that's four be present.
>> four be present.
>> three can support it, but four must be present.
>> correct.
>> that's why we needed commissioner davis to come off of his bahamas vacation and join us.
>> [laughter]
>> yes, sir.
>> thank you.
>> judge, i failed to introduce richard ramirez for southwest who is the lead banker on this.
>> good to see you again, richard. Lad, we know him well. Thanks for working with us again. Let's put number 2 on the consent motion unless there is an objection.
>> i object, i would like to bring it up.
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Last Modified:
Tuesday, July 6, 2010 2:35 PM
