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HomeMy WebLinkAbout2013 06_OPWA_Debt Refunding_Series 2006 DWSRF Promissory Note to OWRB_2013.11.19RESOLUTION NO. 2013-06 A RESOLUTION AUTHORIZING THE OWASSO PUBLIC WORKS AUTHORITY (THE "AUTHORITY ") TO ISSUE ITS UTILITY SYSTEM AND SALES TAX REVENUE NOTE, SERIES 2013 (THE "NOTE ") IN THE AGGREGATE PRINCIPAL AMOUNT OF $2,915,000.00; WAIVING COMPETITIVE BIDDING AND AUTHORIZING THE NOTE TO BE SOLD ON A NEGOTIATED BASIS; RATIFYING AND CONFIRMING A SECURITY AGREEMENT BY AND BETWEEN THE CITY OF OWASSO, OKLAHOMA (1HE "CITY ") AND THE AUTHORITY PERTAINING TO A YEAR -TO -YEAR PLEDGE OF CERTAIN SALES TAX REVENUE; APPROVING AND AUTHORIZING EXECUTION OF A SERIES 2013 SUPPLEMENTAL NOTE INDENTURE AUTHORIZING THE ISSUANCE AND SECURING THE PAYMENT OF THE NOTE; PROVIDING THAT THE ORGANIZATIONAL DOCUMENT CREATING THE AUTHORITY IS SUBJECT TO THE PROVISIONS OF THE INDENTURE; RATIFYING AND CONFIRMING A LEASE AGREEMENT; ESTABLISHING THE AUTHORITY'S REASONABLE EXPECTATION WITH RESPECT TO THE ISSUANCE OF TAX - EXEMPT OBLIGATIONS BY THE AUTHORITY IN CALENDAR YEAR 2013, AND DESIGNATING THE NOTE AS A QUALIFIED TAX - EXEMPT OBLIGATION; AUTHORIZING AND DIRECTING THE EXECUTION OF THE NOTE AND OTHER DOCUMENTS RELATING TO THE TRANSACTION, INCLUDING PROFESSIONAL SERVICES AGREEMENTS; AND CONTAINING OTHER PROVISIONS RELATING THERETO. NOW, THEREFORE, BE IT RESOLVED BY THE TRUSTEES OF THE OWASSO PUBLIC WORKS AUTHORITY: SECTION 1. INDEBTEDNESS AUTHORIZED. The Owasso Public Works Authority (the "Authority") is authorized to incur an indebtedness by the issuance of its Utility System and Sales Tax Revenue Note, Series 2013 for and on behalf of the City of Owasso, Oklahoma (the "City"), in the aggregate principal amount of $2,915,000.00 (the "Note ") for the purpose of (i) advance refunding the outstanding principal amount of the Authority's Series 2006 Drinking Water SRF Promissory Note to Oklahoma Water Resources Board dated March 8, 2006, issued in the original principal amount of $4,853,250; (ii) funding a debt service reserve fund; and (iii) paying certain costs associated with the issuance of the Note. The Note shall bear interest at the rate of 1.52% per annum. The principal installments on the Note shall be paid as set forth on Exhibit "A" hereto. SECTION 2. COMPETITIVE BIDDING WAIVED. Competitive bidding on the sale of said Note is waived and the Note is authorized to be sold to JPMorgan Chase Bank, N.A., at a price of par. SECTION 3. SECURITY AGREEMENT. The Authority hereby ratifies and confirms the Security Agreement dated as of December 1, 1997, by and between the City and the Authority (the "Security Agreement "), which Security Agreement pertains to a year -to -year pledge of certain Sales Tax revenue as security for the Note. SECTION 4. SERIES 2013 SUPPLEMENTAL NOTE INDENTURE. The Series 2013 Supplemental Note Indenture, as it supplements and amends that certain General Bond Indenture dated as of December 1, 1997, as previously supplemented and amended (collectively referred to herein as the "Indenture "), all by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor Trustee Bank, authorizing the issuance of and securing the payment of the Note approved in Section 1 hereof, is hereby approved and the Chairman or Vice - Chairman and Secretary or Assistant Secretary of the Authority are authorized and directed to execute and deliver same for and on behalf of the Authority. SECTION 5. ORGANIZATIONAL DOCUMENT SUBJECT TO THE INDENTURE. The organizational document creating the Authority is subject to the provisions of the Indenture referenced in Section 4 hereof. SECTION 6. LEASE AGREEMENT. The Lease dated July 31, 1973, as amended by Amendment to Lease dated as of July 1, 1996 (collectively, the "Lease Agreement "), both by and between the City and the Authority, whereby the City leases unto the Authority its then existing and thereafter acquired water, sanitary sewer, garbage and trash collection systems and the Bailey Ranch Golf Club, is hereby ratified and confirmed. SECTION 7. CERTIFICATE OF DESIGNATION. The Authority anticipates that the total amount of tax- exempt obligations (other than private activity bonds) issued by the Authority or other issuers on behalf of the City, will not exceed $10,000,000 for calendar year 2013, and hereby designates the Note to be a qualified tax- exempt obligation with respect to the financial institution interest deduction provisions contained in the Internal Revenue Code of 1986, as amended, and authorizes the Chairman or Vice Chairman of the Authority to execute and deliver on behalf of the Authority a Certificate of Designation to that effect. SECTION 8. EXECUTION OF NECESSARY DOCUMENTS. The Chairman or Vice - Chairman and Secretary or Assistant Secretary of the Authority are hereby authorized and directed on behalf of the Authority to execute and deliver the Note to JPMorgan Chase Bank, N.A., upon receipt of the purchase price and are further authorized and directed to execute all necessary documentation and closing and delivery papers required by Bond Counsel, including but not limited to professional services agreements with The Public Finance Law Group PLLC, as Bond Counsel, Municipal Finance Services, Inc., as the Authority's Financial Advisor, and Hawkins, Delafield & Wood LLP, as Special Tax Counsel; approve the disbursement of the proceeds of the Note, including any costs of issuance; to approve and make any changes to the documents approved by this Resolution, for and on behalf of the Authority, the execution and delivery of such documents being conclusive as to the approval of any changes contained therein by the Authority; and to execute, record and file any and all the necessary financing statements and security instruments, including but not limited to the documents approved hereby, and to consummate the transaction contemplated hereby. [Remainder of Page Left Blank Intentionally] 2 PASSED AND APPROVED THIS 19TH DAY OF NOVEMBER, 2013. THE OWASSO PUBLIC WORKS AUTHORITY w CERTIFICATE OF AUTHORITY ACTION I, the undersigned, hereby certify that I am the duly and acting Secretary of The Owasso Public Works Authority. I further certify that the Trustees of The Owasso Public Works Authority held a Regular Meeting at 6:30 o'clock p.m. on November 19, 2013, after due notice was given in full compliance with the Oklahoma Open Meeting Act. I further certify that attached hereto is a full and complete copy of a Resolution that was passed and approved by said Trustees at said meeting as the same appears in the official records of my office and that said Resolution is currently in effect and has not been repealed or amended as of this date. I further certify that below is listed those Trustees present and absent at said meeting; those making and seconding the motion that said Resolution be passed and approved, and those voting for and against such motion: PRESENT: BONEBRAKE, KELLEY, MOBERLY, BROWN, ROSS ABSENT: NONE MOTION MADE BY: ROSS MOTION SECONDED BY: MOBERLY AYE: BONEBRAKE, KELLEY, MOBERLY, BROWN, ROSS NAY:NONE WITNESS MY HAND THIS I 9 DAY OF NOVEMBER, 2013. THE OWASSO PUB4IE''WORKcS AUTHORITY O (SEAL) Sfftary of Authorr`6S+ ^Duty 4 "1'i�0MA lI1 0��aa --------'—` [Principal Payment Schedule] )'------'---~ October 1, 2014 April 1, 2015 October 1, 2615 April 1, 2016 1, 2017 October 1, �617 October 1, 2018 Exhibit A-| C2,0C,ty Wit out li miYs. mIluv 19 om 2013 TO: The Honorable Chair and Trustees Owasso Public Works Authority FROM: Sherry Bishop Assistant City Manager, Administrative Services SUBJECT: Debt Refunding - Series 2006 DWSRF Promissory Note to OWRB OPWA Resolution No. 2013 -06 DATE: November 15, 2013 BACKGROUND: Several weeks ago, our financial advisors, Municipal Financial Services, Inc., informed us there could be an opportunity to refinance the existing Series 2006 Oklahoma Water Resources Board (OWRB) loan at a reduced interest rate. The obligation proposed to be refinanced is the OPWA's Series 2006, Drinking Water State Revolving Fund (DWSRF) Promissory Note to the OWRB dated March 8, 2006 with principal outstanding of $2,720,271 and a September 15, 2026 maturity date. The savings is possible due to the following factors: • The OWRB 2006 Series Note is subject to being called in April 2014 at par with no penalty. This 2006 Note was originally scheduled to mature in September of 2026. • Interest rates are generally lower than the 3.55 %n rate charged on the 2006 Series Note. • The proposed 2013 Series annual debt service payments would increase as 2004 and 2012 Series debt payments end, keeping total OPWA annual debt service payments essentially flat. • The final 5% allocation of Vision 2025 funding for this project is now available to be applied towards this debt. PROPOSED REFINANCING: The proposed refinancing would replace the OWRB note with bank financing with a shorter term and a lower interest rate. At the November 5, 2013 meeting, the OPWA Trustees voted to authorize the bid packet distribution related to this refinancing. On November 8, the following email bid notice was sent by Municipal Financial Services, Inc. to banks along with documents related to the bid process: The Owasso Public Works Authority is seeking bids from financial institutions for the purchase of its $2,915,000 Utility System and Sales Tax Revenue Note, Series 2013 for the purpose of refinancing an existing note originally issued in 2006. The 2013 Note will mature on October 1, 2018, representing a term of slightly less than 5 years. The note will be designated by the City as a "tax - exempt bank qualified obligation" and secured by a pledge of utility revenues and sales tax on a senior lien basis with certain other obligations. The bids are due on the attached Bid Form no later than 11:00 a.m., Tuesday, November 19, 2013 and the Authority is set to consider the bids that evening. The issue would close on or about Friday, December 13, 2103, at which time the note would be paid for in full by the successful purchaser. PROPOSED ACTION: The OPWA resolution authorizes the issuance of a note in the amount of $2,915,000 for the purpose of refunding the Series 2006 DWSRF Promissory Note to the OWRB and confirms existing agreements between the City and the OPWA. The attached draft resolution is blank for the interest rate for which bids are due at 11:00 am, Tuesday, November 19. The final resolution for approval will be provided at the meeting Tuesday night. The resolution also authorizes the payment of costs, waives competitive bidding, hires the Financial Advisor and Bond Counsel, and authorizes execution of documents and other related provisions necessary for completion of the transaction, Staff recommends approval of OPWA Resolution No. 2013 -06 authorizing the issuance of a note and containing other related provisions. ATTACHMENTS: Draft OPWA Resolution No. 2013 -06 Bid Information Document for $2,915,000 Utility System and Sales Tax Revenue Note, Series 2013 dated November 7, 2013