HomeMy WebLinkAbout2023 02_OPWA Series 2023 Loan Note OWRBPURSUANT TO THE LEGAL NOTICE AS IS REQUIRED BY THE OKLAHOMA
OPEN MEETING ACT INCLUDING THE POSTING OF NOTICE AND AGENDA AS IS
REQUIRED BY THE TERMS THEREOF, THE BOARD OF TRUSTEES OF THE OWASSO
PUBLIC WORKS AUTHORITY, TULSA COUNTY, OKLAHOMA, MET IN REGULAR
SESSION IN THE OLD CENTRAL BUILDING, 109 NORTH BIRCH, OWASSO, OKLAHOMA,
ON THE 11TH DAY OF JULY, 2023, AT 6:00 P.M.
PRESENT: Vice Chair Alvin Fruga, Trustee Doug Bonebrake, Trustee Paul Loving,
Trustee Lyndell Dunn
ABSENT: Chair Kelly Lewis
Thereupon, the Vice Chair introduced a Resolution which was discussed. Trustee Doug
Bonebrake moved that the Resolution be adopted and Trustee Lyndell Dunn seconded the motion.
The motion carrying with it the adoption of the Resolution prevailed by the following vote:
AYE: Vice Chair Alvin Fruga, Trustee Doug Bonebrake, Trustee Paul Loving,
Trustee Lyndell Dunn
NAY: None
The Resolution as adopted is as follows:
RESOLUTION NO. 2023-02
A RESOLUTION OF THE OWASSO PUBLIC WORKS AUTHORITY (THE
"BORROWER ") AUTHORIZING A LOAN FROM THE OKLAHOMA WATER
RESOURCES BOARD IN THE TOTAL AGGREGATE PRINCIPAL AMOUNT
OF NOT TO EXCEED $9,000,000.00; APPROVING THE ISSUANCE OF A
SERIES 2023 PROMISSORY NOTE TO OKLAHOMA WATER RESOURCES
BOARD IN THE TOTAL AGGREGATE PRINCIPAL AMOUNT OF NOT TO
EXCEED $9,000,000.00, SECURED BY A PLEDGE OF REVENUES AND
AUTHORIZING ITS EXECUTION; DESIGNATING A LOCAL TRUSTEE;
APPROVING AND AUTHORIZING THE EXECUTION OF A TRUST
AGREEMENT; APPROVING AND AUTHORIZING THE EXECUTION OF A
LOAN AGREEMENT; APPROVING AND AUTHORIZING THE EXECUTION
OF A SECURITY AGREEMENT; RATIFYING AND CONFIRMING A LEASE
AGREEMENT; APPROVING AND AUTHORIZING A NOTE PURCHASE
AGREEMENT; AUTHORIZING DOCUMENTS PERTAINING TO A YEAR -TO-
YEAR PLEDGE OF CERTAIN SALES TAX REVENUE; APPROVING
VARIOUS COVENANTS; APPROVING AND AUTHORIZING PAYMENT OF
FEES AND EXPENSES; APPROVING AND AUTHORIZING APPLICATION TO
THE OKLAHOMA WATER RESOURCES BOARD; APPROVING AND
AUTHORIZING PROFESSIONAL SERVICES AGREEMENTS; AND
CONTAINING OTHER PROVISIONS RELATING THERETO.
WHEREAS, The Owasso Public Works Authority, Tulsa County, Oklahoma (the
"Borrower "), was organized under Title 60, Oklahoma Statutes 2021, Sections 176 - 180.4, as
amended, for the purpose of furthering the public functions of the City of Owasso, Oklahoma (the
"City"); and
WHEREAS, the Borrower is authorized and has determined to finance the costs of certain
improvements to the Borrower's sanitary sewer system (the "Project") in order to better serve the
customers of said Borrower and in payment of part of the cost thereof, to seek money in the form of
a loan from the Oklahoma Water Resources Board (the "Board ") in the amount of not to exceed
$9,000,000.00; and
WHEREAS, the Borrower has heretofore issued its (i) Series 2009B Clean Water SRF
Promissory Note to Oklahoma Water Resources Board dated December 8, 2009, issued in the original
principal amount of $10,795,000.00; (ii) Series 2009C Clean Water SRF Promissory Note to
Oklahoma Water Resources Board dated December 8, 2009, issued in the original principal amount
of $4,510,000.00; (iii) Series 2011 Clean Water SRF Promissory Note to Oklahoma Water Resources
Board dated November 17, 2011, issued in the original principal amount of $3,115,000.00; (iv) Series
2013 Clean Water SRF Promissory Note to Oklahoma Water Resources Board dated December 13,
2013, issued in the original principal amount of $3,425,000.00; and (v) Series 2019 Promissory Note
to Oklahoma Water Resources Board dated July 30, 2019, issued in the original principal amount of
$23,805,000 (collectively, the "Existing Indebtedness "); and
WHEREAS, the Board has under consideration a loan application of the Borrower and the
Borrower has determined to borrow money from the Board for the purpose of financing the Project
and to evidence such loan by the issuance of the Borrower's Series 2023 Promissory Note to
Oklahoma Water Resources Board in the original principal amount of not to exceed $9,000,000.00
(the "2023 Note "), said 2023 Note being secured by a lien on the revenues derived from the water,
sanitary sewer, garbage and trash collection systems and the Bailey Ranch Golf Club (collectively,
the "System") and the revenue generated pursuant to a two percent (2 %) sales tax received by the
Borrower from the City, which sales tax is levied pursuant to Ordinance No. 103 of the City, as
amended by Ordinance No. 153 of said City (the "Sales Tax Revenue "); provided, said pledge and
lien shall be on a parity in all respects with the Borrower's Existing Indebtedness; and
WHEREAS, it is the desire of the Borrower to authorize the execution and delivery of any
and all documents necessary or attendant to the issuance of the 2023 Note.
NOW, THEREFORE, BE IT RESOLVED BY THE TRUSTEES OF THE OWASSO
PUBLIC WORKS AUTHORITY, TULSA COUNTY, OKLAHOMA:
Section 1. Issuance of 2023 Note. The Borrower is hereby authorized to accept said loan and
issue its 2023 Note payable to the Board and secured by a pledge of revenue derived from the
operation of the System and the Sales Tax Revenue. The officers of the Borrower are hereby
authorized and directed to execute said 2023 Note and to do any and all lawful things to effect said
loan and secure said loan from the Board. The principal amount of the 2023 Note shall not exceed
$9,000,000.00, the Net Interest Cost on the 2023 Note shall not exceed 5.5% per annum, and the
maturity date shall be not later than October 1, 2053. The Chairman or Vice Chairman shall be
authorized to execute a Certificate of Determination establishing the principal amount, maturity, and
rate of interest on the 2023 Note. It is contemplated that interest on the Note will be excludable from
gross income for federal income tax purposes. In the event it is recommended by Borrower's Financial
2
Advisor that the Note be issued on a taxable basis (interest would be included in gross income for
federal income tax purposes), the Chairman or Vice Chairman shall also be authorized to make this
determination pursuant to the Certificate of Determination.
Section 2. Designation of Local Trustee. The Borrower hereby designates BancFirst, to serve
as the Local Trustee of certain funds in relation to the 2023 Note.
Section 3. Execution of Trust Agreement. The Trust Agreement by and between the
Borrower and the Local Trustee, pertaining to the 2023 Note is hereby approved and the Chairman or
Vice Chairman and Secretary or Assistant Secretary are hereby authorized to execute same for and
on behalf of the Borrower, and to do all other lawful things to carry out the terms and conditions of
said Trust Agreement.
Section 4. Execution of Loan Agreement. The Loan Agreement by and between the
Borrower and the Board (the "Loan Agreement ") is hereby approved and the Chairman or Vice
Chairman and Secretary or Assistant Secretary are hereby authorized to execute same for and on
behalf of the Borrower, and to do all other lawful things to carry out the terms and conditions of said
Loan Agreement.
Section 5. Execution of Security Agreement. The Security Agreement by the Borrower in
favor of the Board (the "Security Agreement "), whereby the Borrower gives a lien on the revenues of
the System to the Board to secure payment of the 2023 Note is hereby approved and the Chairman or
Vice Chairman and Secretary or Assistant Secretary are hereby authorized to execute same for and
on behalf of the Borrower, and do all other lawful things to carry out the terms and conditions of said
Security Agreement.
Section 6. Lease Agreement. The Lease dated July 31, 1973, as amended by an Amendment
to Lease dated as of July 1, 1996, between the City and the Borrower (collectively, the "Lease
Agreement"), whereby the City leases its water, sanitary sewer, garbage and trash collection systems
and the Bailey Ranch Golf Club to the Borrower, is hereby ratified and confirmed and the term of
said Lease, as amended, shall extend until the 2023 Note is paid.
Section 7. Note Purchase Agreement. The Borrower hereby approves the Note Purchase
Agreement by and between the Borrower and the Board (the "Note Purchase Agreement ") and the
Chairman or Vice Chairman and Secretary or Assistant Secretary of the Borrower be and are hereby
authorized to execute and deliver said Note Purchase Agreement.
Section 8. Sales Tax Pledge. That the Chairman or Vice Chairman and Secretary or Assistant
Secretary of the Borrower be and are hereby authorized to execute and deliver any and all
documentation on behalf of the Borrower pertaining to the year -to -year pledge of the Sales Tax
Revenue for purposes of securing the 2023 Note.
Section 9. Covenants of Borrower. Until payment in full of the 2023 Note and performance
of all obligations owing to the Board under the Loan Agreement and the instruments executed
pursuant hereto, unless the Board shall otherwise consent in writing, the Borrower hereby represents
its intent to abide by and carry out the covenants contained in Security Agreement and the Loan
Agreement, which covenants are incorporated herein in their entirety.
Section 10. Fees and Expenses. Upon closing of the referenced loan, the officers of the
Borrower are hereby authorized to disburse (from loan proceeds or other available funds of the
Borrower) those fees and expenses set forth on Exhibit "A" hereto, together with such other fees and
expenses as will be set forth on the Borrower's Closing Order to be executed by the Chairman or Vice
Chairman and Secretary or Assistant Secretary of the Borrower.
Section 11. Application. The Borrower shall file an Application(s) with the Oklahoma
Water Resources Board seeking financial assistance through the OWRB State Loan Program
(FAP); and the Chairman or Vice Chairman and Secretary or Assistant Secretary of the Borrower
are hereby authorized to execute said Application(s) for and on behalf of the Borrower. The
Borrower is further authorized to advance to the Oklahoma Water Resources Board the necessary
application fees in connection with the referenced Application(s).
Section 12. Professional Services Agreements. The Borrower is authorized to enter into
legal services agreements with The Public Finance Law Group PLLC, as the Borrower's Bond
Counsel, and professional services agreements with Municipal Finance Services, Inc., as the
Borrower's Financial Advisor.
Section 13. Necessary Action. The Chairman or Vice Chairman and Secretary or Assistant
Secretary of the Borrower are hereby further authorized on behalf of the Borrower to approve the
disbursement of the proceeds of the 2023 Note and other funds of the Borrower in connection with
the issuance of the 2023 Note and the accomplishment of the transaction contemplated herein, and
further, to accept, receive, execute, attest, seal and deliver the above mentioned documents and all
additional documentation, certifications and instruments and to take such further actions as may be
required in connection with the transaction contemplated hereby, including the Letter of Binding
Commitment, and are further authorized to approve and make any changes to the documents approved
by this Resolution, for and on behalf of the Borrower, the execution and delivery of such documents
being conclusive as to the approval of any terms contained therein.
[Remainder of Page Intentionally Left Blank]
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APPROVED AND ADOPTED THIS 11TH DAY OF JULY, 2023.
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THE OWASSO PUBLIC WORKS
AUTHORITY
Chairman A.LVi IU rl 9
STATE OF OKLAHOMA )
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COUNTY OF TULSA )
I, the undersigned, Secretary of The Owasso Public Works Authority, Tulsa County,
Oklahoma, an Oklahoma public trust, do hereby certify that the above and foregoing is a true, full and
correct copy of an excerpt from the minutes of a meeting of the Board of Trustees of said public trust
held on the date above stated, all as recorded in the official minutes of such meeting. I further certify
that the "Open Meeting Law" was complied with for such meeting.
GIVEN UNDER MY HAND THIS l 1TH DAY OF JULY, 2023.
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EXHIBIT "A"
Fees and Expenses Paid at Closing
Oklahoma Water Resources Board
Issuance Costs
The Public Finance Law Group PLLC
Legal Fee and Expenses:
Municipal Finance Services, Inc.
Financial Advisor Fee and Expenses:
BancFirst
Trustee Acceptance Fee
$110,000.00*
1.0% of the gross proceeds of
the Note plus $2,500
1.0% of the gross proceeds of
the Note plus $2,500
$750.00
* Not to exceed amount; to be established pursuant to Closing Order of Borrower
Exhibit A -1
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TO: The Honorable Mayor and City Council
The Honorable Chair and Trustees
Owasso Public Works Authority
FROM: Carly Novozinsky, Finance Director
APPROVED BY COUNCIL
JUL 11 2023
APPROVED BY TRUSTEES
JUL 1 1 2023
SUBJECT: Resolutions — Oklahoma Water Resources Board (OWRB) Promissory Note, Series
2023
DATE: July 7, 2023
BACKGROUND:
Throughout the budgeting process for fiscal year 2023 -2024, Council and Trustees were made
aware of a gap in funding for Owasso Public Works Authority (OPWA) capital projects. The
following projects are included in the OPWA fiscal year 2023 -2024 budget, and lack funding of
$9,000,000.00:
• Upgrade of the Ranch Creek Interceptor
• Upgrade of the Elm Creek Interceptor
• Upgrade of the 117th Force Main
Engineering for the three projects is ongoing and nearing completion. Construction is scheduled
to begin in fiscal year 2023 -2024, but construction contracts have not yet been awarded.
Financing will be sought through the Oklahoma Water Resources Board (OWRB) Financial
Assistance Program to fully fund these projects. This program will allow the OPWA to take
advantage of low interest rates based on OWRB's AAA credit rating. The program is a State
funded program with no federal requirements that could lead to project delays.
As a public trust of the City, the OPWA cannot incur debt without the approval of the City Council.
City Resolution 2023 -15 authorizes the OPWA to issue its Promissory Note, Series 2023. The resolution
also ratifies and confirms existing agreements between the City and the OPWA and provides
various other requirements of the financing.
OPWA Resolution 2023 -02 authorizes the issuance of Promissory Note, Series 2023 up to
$9,000,000.00. The resolution also ratifies and confirms existing agreements between the City and
the OPWA, provides various other requirements of the financing, and authorizes the execution of
all documents related to the transaction.
CITY COUNCIL RECOMMENDATION:
Staff recommends approval of Resolution 2023 -15, a resolution of the City of Owasso, Oklahoma
(the "City ") approving action taken by The Owasso Public Works Authority (the "Authority ")
authorizing the issuance, sale and delivery of the Authority's Series 2023 Promissory Note to
Oklahoma Water Resources Board; ratifying and confirming a Lease Agreement; authorizing
documents pertaining to a year -to -year pledge of certain sales tax revenue; and containing other
provisions related thereto.
OWRB Loan
Page 2
OPWA RECOMMENDATION:
Staff recommends approval of Resolution 2023 -02, a Resolution of The Owasso Public Works
Authority (the "Borrower ") authorizing a loan from the Oklahoma Water Resources Board in the
total aggregate principal amount of not to exceed $9,000,000.00; approving the issuance of a
Series 2023 Promissory Note to Oklahoma Water Resources Board in the total aggregate principal
amount of not to exceed $9,000,000.00, secured by a pledge of revenues and authorizing its
execution; designating a local trustee; approving and authorizing the execution of a Trust
Agreement; approving and authorizing the execution of a Loan Agreement; approving and
authorizing the execution of a Security Agreement; ratifying and confirming a Lease Agreement;
approving and authorizing a Note Purchase Agreement; authorizing documents pertaining to a
year -to -year pledge of certain sales fax revenue; approving various covenants; approving and
authorizing payment of fees and expenses; approving and authorizing application to the
Oklahoma Water Resources Board; approving and authorizing professional services agreements
with the Public Finance Law Group, PLLC and Municipal Finance Services, Inc.; and containing
other provisions relating thereto.
ATTACHMENTS:
City Council Resolution 2023 -15
OPWA Resolution 2023 -02
Municipal Finance Services, Inc. contract
Public Finance Law Group, PLLC contract