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Home My WebLink About2009 02_Issuance by OPWA amended Promissory Notes_2009.02.17OWASSO CITY COUNCIL CITY OF OWASSO, OKLAHOMA RESOLUTION N0.2009-02 A RESOLUTION AUTHORIZING AND APPROVING THE ISSUANCE BY THE OWASSO PUBLIC WORKS AUTHORITY OF AMENDED PROMISSORY NOTES TO THE OKLAHOMA WATER RESOURCES BOARD PERTAINING TO THE CONVERSION OF THE AUTHORITY'S SERIES 1999B PROMISSORY NOTE, SERIES 2001B PROMISSORY NOTE, AND SERIES 2001C PROMISSORY NOTE FROM A VARIABLE INTEREST RATE TO A FIXED INTEREST RATE; AND CONTAINING OTHER PROVISIONS RELATED THERETO. WHEREAS, The Owasso Public Works Authority (the "Authority") did, by its Resolution adopted on February 17, 2009 (the "Conversion Resolution"), authorize the issuance of its Amended Series 1999B Promissory Note to Oklahoma Water Resources Board in order to accommodate the conversion of its Series 1999B Promissory Note from a variable interest rate to a fixed interest rate; and WHEREAS, the Authority did, by its Conversion Resolution, authorize the issuance of its Amended Series 2001B Promissory Note to Oklahoma Water Resources Board in order to accommodate the conversion of its Series 2001B Promissory Note from a variable interest rate to a fixed interest rate; and WHEREAS, the Authority did, by its Conversion Resolution, authorize the issuance of its Amended Series 2001 C Promissory Note to Oklahoma Water Resources Board in order to accommodate the conversion of its Series 2001 C Promissory Note from a variable interest rate to a fixed interest rate; and WHEREAS, the City Council of the City of Owasso, Oklahoma (the "City") hereby determines that the actions taken by the Authority in connection with said conversion of interest rate should be authorized and approved. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OWASSO, OKLAHOMA: Section 1. Issuance of Notes. That the issuance of The Owasso Public Works Authority, Tulsa County, Oklahoma, Amended Series 1999B Promissory Note to Oklahoma Water Resources Board (the "Amended 1999B Note"), The Owasso Public Works Authority, Tulsa County, Oklahoma, Amended Series 2001 B Promissory Note to Oklahoma Water Resources Board (the "Amended 2001 B Note"), and The Owasso Public Works Authority, Tulsa County, Oklahoma, Amended Series 2001C Promissory Note to Oklahoma Water Resources Board (the "Amended 2001 C Note"), all as approved by said Authority on February 17, 2009, be and hereby is authorized, approved and ratified. Section 2. Approval. That all actions heretofore taken by the Authority in connection with the issuance of the Amended 1999B Note, the Amended 2001 B Note, and the Amended 2001 C Note and all other aspects of the transaction pertaining to the conversion of the interest rate on its Series 1999B Note, Series 2001B Note, and Series 2001C Note from a variable interest rate to a fixed interest rate, be and are hereby authorized, approved and ratified. Section 3. Necessary Action. That the Mayor or Vice Mayor and City Clerk or Assistant City Clerk be and hereby are authorized and empowered to execute and delivery for and on behalf of the City any and all other documents or instruments reasonably necessary to accomplish the above referenced conversion of interest rate with respect to its Series 1999B Note, Series 2001B Note, and Series 2001 C Note and all other aspects of the transaction. PASSED AND APPROVED THIS 17TH DAY OF FEBRUARY, 2009. CITY F S , O OMA Stephen C taudella, Mayor ATTEST: ~/ / ~ of o Sherry Bish p, City Clerk wG ~~-~~, ti~ cn bFFiCIAL ~ ~sEAL) SEAL ~1{l.AHOMP APPROVED AS TO FORM: Julie Lo bardi, City Attorney 2 APPROVED BY COUNCIL FEB 17 2009 MEMORANDUM TO: FROM: SUBJECT: DATE: BACKGROUND: HONORABLE MAYOR AND CITY COUNCIL CITY OF OWASSO SHERRY BISHOP ASSISTANT CITY MANAGER OWRB DEBT REFINANCING CITY RESOLUTION N0.2009-02 February 13, 2009 The Oklahoma Water Resources Board (OWRB) operates the State Revolving Fund (SRF) loan program and the Financial Assistance Program (FAP). These programs provide low interest financing for eligible projects. Since 1993, all of Owasso's water and wastewater projects have been financed by the OWRB. Working with the OWRB, our Financial Advisor, Keith McDonald, and Bond Counsel, Allan Brooks, have determined that three of the OPWA variable rate notes could be refinanced at a significant interest savings. They have created a pool of borrowers to participate in an OWRB refunding bond issue. The three OPWA notes to be included in the refinancing are- Outstanding Principal Balance Series 1999B $406,700 Series 2001B $1,297,000 Series 2001 C $712,000 Total $2,415,700 These three notes are part of a pool of OWRB variable rate debt that is re-marketed every six months. The rate is then set for the next semi-annual interest period. Over the past ten years of the 1999 note, the rate has ranged from a low of 1.75% to a high of 4.972%. The rate for the current period (September 2008 through March 2009) is 3.05%. Our advisors have recommended that this is a good time to replace this type of variable rate debt with a fixed rate debt. Because the current debt has a variable interest rate, assumptions must be made in order to estimate the amount of savings that could be achieved. If interest on the variable rate debt was 4% until final maturity of the current debt in 2022, the interest savings would be about $200,000. All costs and fees for the refinancing would be included in the principal of the new debte OPWA Resolution No. 2009-01 - • Authorizes the issuance of Amended Promissory Notes to the OWRB; • Approves the conversion of three OPWA Promissory Notes (Series 1999B Note, Series 2001B Notes, and Series 2001C Note) from variable interest rate notes to fixed interest rate notes; • Establishes a "not later than" maturity date and a "not to exceed" average interest rate; • Approves the payment of fees and expenses associated with the conversion of the Notes; • Approves the professional services agreements with Wells Nelson & Associates (Keith McDonald) and The Public Finance Law Group (Allan Brooks); and • Authorizes the execution of documents and such action as may be required in connection with the transaction. The attached OPWA resolution is blank for the maturity date and the average interest rate of the Amended Notes. The notes are expected to have a final maturity date of September 1, 2019. As of last week, the estimated weighted average interest rate was 3.233%. The completed resolutions will be distributed at the meeting on Tuesday night. City Resolution No. 2009-02 • Authorizes and approves the issuance of the OPWA Amended Notes to the OWRB; • Approves all action taken by the OPWA in connection with the issuance of the Amended Notes; and • Authorizes the execution of all documents necessary to accomplish the transaction. RECOMMENDATION: Staff recommends approval of City Resolution No. 2009-02 approving the issuance by the OPWA of Amended Promissory Notes to the OWRB pertaining to the conversion of notes from a variable interest rate to a fixed interest rate and other related provisions. ATTACHMENT: City Resolution No. 2009-02