HomeMy WebLinkAbout2009 01_OPWA_Refinance_OWRB Variable Rate Note_2009.02.17THE BOARD OF TRUSTEES OF THE OWASSO PUBLIC WORKS AUTHORITY,
TULSA COUNTY, OKLAHOMA, MET IN REGULAR SESSION AT THE OLD CENTRAL
BUILDING, OWASSO, OKLAHOMA, ON THE 17' DAY OF FEBRUARY, 2009 AT 6:30
O'CLOCK P.M.
motion
PRESENT:
ABSENT:
Thereupon, the Chairman introduced a Resolution which was read by the Secretary. Trustee
moved that the Resolution be adopted and Trustee seconded the
The motion carrying with it the adoption of the Resolution prevailed by the following vote:
AYE:
NAY:
The Resolution as adopted is as follows:
RESOLUTION NO. 2009-01
A RESOLUTION AUTHORIZING THE CONVERSION OF THE
AUTHORITY'S SERIES 1999B PROMISSORY NOTE TO OKLAHOMA
WATER RESOURCES BOARD (THE "1999B NOTE ") FROM A VARIABLE
INTEREST RATE TO A FIXED INTEREST RATE; AUTHORIZING THE
CONVERSION OF THE AUTHORITY'S SERIES 2001B PROMISSORY NOTE
TO OKLAHOMA WATER RESOURCES BOARD (THE "2001B NOTE ")
FROM A VARIABLE INTEREST RATE TO A FIXED INTEREST RATE;
AUTHORIZING THE CONVERSION OF THE AUTHORITY'S SERIES 2001C
PROMISSORY NOTE TO OKLAHOMA WATER RESOURCES BOARD (THE
"2001C NOTE ") FROM A VARIABLE INTEREST RATE TO A FIXED
INTEREST RATE; AUTHORIZING THE AMENDMENT OF THE 1999B
NOTE, THE 2001B NOTE, AND THE 2001C NOTE AND OTHER RELATED
DOCUMENTS IN CONNECTION WITH THE REFERENCED CONVERSION
OF INTEREST RATE; AUTHORIZING THE DISBURSEMENT OF PROCEEDS
OF THE 1999B NOTE, THE 2001B NOTE, AND THE 2001C NOTE AND /OR
FUNDS OF THE AUTHORITY FOR COSTS IN CONNECTION WITH THE
REFERENCED CONVERSION OF INTEREST RATE; APPROVING AND
AUTHORIZING EXECUTION OF 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 2001, 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 heretofore issued its Series 1999B Promissory Note to
Oklahoma Water Resources Board dated June 30, 1999, in the original principal amount of
$570,000 (the "199913 Note "); and
WHEREAS, the Borrower heretofore issued its Series 2001B Promissory Note to
Oklahoma Water Resources Board dated June 27, 2001, in the original principal amount of
$1,805,000 (the "2001B Note "); and
WHEREAS, the Borrower heretofore issued its Series 2001C Promissory Note to
Oklahoma Water Resources Board dated June 27, 2001, in the original principal amount of
$1,005,000 (the "2001C Note "); and
WHEREAS, the Borrower desires to convert the interest rate on the 1999B Note, the 2001B
Note, and the 2001 C Note from a variable rate of interest to a fixed rate of interest; and
WHEREAS, it is now necessary to execute documentation to effectuate said conversion of
interest rate.
NOW, THEREFORE, BE IT RESOLVED BY THE TRUSTEES OF THE OWASSO
PUBLIC WORKS AUTHORITY:
Section 1. Issuance of Note.
(a) The Borrower is hereby authorized to issue its Amended Series 1999B Promissory
Note to Oklahoma Water Resources Board (the "Amended 1999B Note ") to effectuate the
conversion of the 1999B Note from a variable to a fixed interest rate. Said Amended 1999B
Note shall mature not later than September 1, 2019, and shall bear interest at an average
interest rate of not to exceed 3.843% per annum.
(b) The final principal amount, which shall be an amount not to exceed $394,000.00,
the maturity date, and interest rate of the Amended 1999B Note shall be established
pursuant to a Certificate of Determination to be executed by the Chairman or Vice
Chairman of the Borrower.
(c) The Borrower is hereby authorized to issue its Amended Series 2001B Promissory
Note to Oklahoma Water Resources Board (the "Amended 2001B Note ") to effectuate the
conversion of the 2001B Note from a variable to a fixed interest rate. Said Amended 2001B
Note shall mature not later than September 1, 2019, and shall bear interest at an average
interest rate of not to exceed 3.843% per annum.
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(d) The final principal amount, which shall be an amount not to exceed $1,283,300.00,
the maturity date, and interest rate of the Amended 2001B Note shall be established
pursuant to a Certificate of Determination to be executed by the Chairman or Vice
Chairman of the Borrower.
(e) The Borrower is hereby authorized to issue its Amended Series 2001C Promissory
Note to Oklahoma Water Resources Board (the "Amended 2001C Note ") to effectuate the
conversion of the 2001C Note from a variable to a fixed interest rate. Said Amended
2001C Note shall mature not later than September 1, 2019, and shall bear interest at an
average interest rate of not to exceed 3.843% per annum.
(f) The final principal amount, which shall be an amount not to exceed $705,100.00,
the maturity date, and interest rate of the Amended 2001C Note shall be established
pursuant to a Certificate of Determination to be executed by the Chairman or Vice
Chairman of the Borrower.
Section 2. Fees and Expenses. Upon issuance of the Amended 1999B Note, the Amended
2001B Note, and the Amended 2001C Note, the Chairman or Vice Chairman and Secretary or
Assistant Secretary of the Borrower are hereby authorized to disburse from the proceeds of the
Amended 1999B Note, the Amended 2001B Note, and the Amended 2001C Note and/or from
funds of the Borrower, the fees and expenses relating to the conversion as set forth on Exhibit "A"
attached hereto, and said officers are further authorized to make transfers and disbursements, all as
more fully set out in the Closing Order to be executed and delivered at closing of said conversion.
Section 3. Professional Services Agreements. The Chairman or Vice Chairman and
Secretary or Assistant Secretary of the Borrower are hereby authorized to execute and deliver
professional services agreements with Wells Nelson & Associates, for financial advisory services,
and with The Public Finance Law Group PLLC, for bond counsel services.
Section 4. 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 1999B Note, the 2001B Note, and the 2001C Note, each as
converted to a fixed interest rate; to accept, receive, execute, attest, seal and deliver the above -
mentioned Amended 1999B Note, Amended 2001B Note, and Amended 2001C Note and all
additional documentation, certifications and instruments and to take such further actions as may be
required in connection with the transaction contemplated hereby, 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 Left Blank Intentionally]
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ADOPTED AND APPROVED THIS 17TH DAY OF FEBRUARY, 2009.
THE OWASSO PUBLIC WORKS AUTHORITY
Chairman
ATTEST:
Secretary
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EXHIBIT "A"
Fees and Expenses Paid at Closing
Wells Nelson & Associates, LLC
Financial Advisory Fee and
Out -of- Pocket Expenses $25,150.00
The Public Finance Law Group PLLC
Legal Fee and Expenses $25,150.00
Oklahoma Water Resources Board
Conversion Costs* $24,100.00
* Estimated not to exceed costs
no
MEMORANDUM
TO:
FROM:
SUBJECT:
DATE:
BACKGROUND:
HONORABLE CHAIR AND TRUSTEES
OWASSO PUBLIC WORKS AUTHORITY
SHERRY BISHOP
ASSISTANT CITY MANAGER
OWRB DEBT REFINANCING
OPWA RESOLUTION NO. 2009-01
February 13, 2009
APPROVED BY TRUSTEES
r EL, 17 1009
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—
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 debt.
Outstanding
Principal Balance
Series 1999B
$406,700
Series 2001B
$1,297,000
Series 2001C
$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 debt.
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 OPWA Resolution No. 2009 -01 authorizing the conversion of the
Promissory Notes to the OWRB from a variable interest rate to a fixed interest rate and other related
provisions.
ATTACHMENTS:
OPWA Resolution No. 2009 -01