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HomeMy WebLinkAbout2013 21_Debt Refunding _ Series 2006 DWSRF Promissory Note to OWRB_2013.11.19RESOLUTION NO. 2013-21 A RESOLUTION OF THE CITY OF OWASSO, OKLAHOMA (THE "CITY") APPROVING THE INCURRENCE OF INDEBTEDNESS BY THE OWASSO PUBLIC WORKS AUTHORITY (THE "AUTHORITY") ISSUING ITS UTILITY SYSTEM AND SALES TAX REVENUE NOTE, SERIES 2013 (THE "NOTE"); PROVIDING THAT THE ORGANIZATIONAL DOCUMENT CREATING THE AUTHORITY IS SUBJECT TO THE PROVISIONS OF THE INDENTURE, AUTHORIZING THE ISSUANCE OF SAID NOTE; WAIVING COMPETITIVE BIDDING WITH RESPECT TO THE SALE OF SAID NOTE AND APPROVING THE PROCEEDINGS OF THE AUTHORITY PERTAINING TO THE SALE OF SAID NOTE; RATIFYING AND CONFIRMING A SECURITY AGREEMENT BY AND BETWEEN THE CITY AND THE AUTHORITY PERTAINING TO THE YEAR-TO-YEAR PLEDGE OF CERTAIN SALES TAX REVENUES; RATIFYING AND CONFIRMING A LEASE AGREEMENT: ESTABLISHING THE CITY'S REASONABLE EXPECTATION WITH RESPECT TO THE ISSUANCE OF TAX-EXEMPT OBLIGATIONS BY OR ON BEHALF OF SAID CITY IN CALENDAR YEAR 2013, AND DESIGNATING THE NOTE AS A QUALIFIED TAX-EXEMPT OBLIGATION; AND CONTAINING OTHER PROVISIONS RELATING THERETO. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA: SECTION 1. INDEBTEDNESS AUTHORIZED. The Owasso Public Works Authority (the "Authority") is hereby authorized to incur an indebtedness by the issuance of its Utility System and Sales Tax Revenue Note, Series 2013 in the amount of $2,915,000.00 (the "Note"), according to the terms and conditions of a General Bond Indenture dated as of December 1, 1997, as previously supplemented and amended and as further supplemented and amended by a Series 2013 Supplemental Note Indenture (collectively, the "Indenture"), all by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as successor Trustee Bank, provided that said Note shall never constitute a debt of the City of Owasso, Oklahoma (the "City"). SECTION 2. ORGANIZATIONAL DOCUMENT SUBJECT TO INDENTURE. The organizational document creating the Authority, is hereby made subject to the terms of the Indenture authorizing the issuance and securing the payment of the Note as more fully described in Section 1 hereof. SECTION 3. WAIVING COMPETITIVE BIDDING: APPROVAL OF SALE PROCEEDINGS. The waiving of competitive bidding for the sale of the Note and the sale of said Note by the Authority to JPMorgan Chase Bank, N.A., at a price of par, is hereby approved. SECTION 4. SECURITY AGREEMENT. The City hereby ratifies and confirms a 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 5. 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 6. CITY'S EXPECTATIONS. The City anticipates that the total amount of tax- exempt obligations (other than private activity bonds) issued by The Owasso Public Works Authority or other issuers on behalf of said City, will not exceed $10,000,000 for calendar year 2013, and the City 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 Mayor or Vice Mayor to execute and deliver on behalf of the City a Certificate of Designation to that effect. SECTION 7. AUTHORIZING EXECUTION. The Mayor or Vice-Mayor and City Clerk or Deputy City Clerk of the City representing the City at the closing of the above-referenced note issue are hereby authorized to execute and deliver on behalf of the City any and all certifications and documentation necessary or attendant to the delivery of the Note, as directed by Bond Counsel. [Remainder of Page Left Blank Intentionally] 1) PASSED AND APPROVED THIS I9T" DAY OF NOVEMBER, 2013. CITY OF OWASSO, OKLAHOMA r~ (SEAL) j~ ' GO 'May9 ;rte Z A 'LS or ,(,T A CERTIFICATE OF CITY COUNCIL ACTION I, the undersigned, hereby certify that I am the duly qualified and acting City Clerk of the City of Owasso, Oklahoma. I further certify that the City Council of the City of Owasso, Oklahoma, 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 City Council 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 Council members 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: BROWN AYE: BONEBRAKE, KELLEY, MOBERLY, BROWN, ROSS NAY:NONE WITNESS MY HAND THIS 19TH DAY OF NOVEMBER, 2013. (SEAL) OT City Wit out Limits. TO: The Honorable Mayor and City Council City of Owasso FROM: Sherry Bishop Assistant City Manager, Administrative Services >'V©~, ~~~Ultr SUBJECT: Debt Refunding - Series 2006 DWSRF Promissory Note to OWRB City Resolution No. 2013-21 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% 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 City resolution authorizes the OPWA to incur debt in the ornount of $2,915,000 and approves and authorizes other related provisions. RECOMMENDATION: Staff recommends approval of City Resolution No. 2013-21 approving the incurrence of indebtedness by the OPWA and containing other related provisions. ATTACHMENT: Draft City Resolution No. 2013-21