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City Council |
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Agenda Request |
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Agenda Of: |
October 16, 2007 |
Agenda Request No: |
VI A |
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Initiated By: |
Jennifer Brown |
Responsible Department: |
Fiscal Services |
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Presented By: |
Jennifer Brown Asst. Fiscal Services Director |
Department Head: |
Linda Symank Director of Fiscal Services |
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Additional Department. Head (s): |
n/a |
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Subject / Proceeding: |
Certificates of Obligation – Airport |
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Exhibits: |
Resolution 07-36 |
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Clearances |
Approval |
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Legal: |
n/a |
Executive Director: |
n/a |
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Purchasing: |
n/a |
Asst. City Manager: |
Karen Daly |
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Budget: |
n/a |
City Manager: |
Allen Bogard |
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Budget |
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Expenditure Required: $ |
n/a |
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Amount Budgeted/Reallocation: $ |
n/a |
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Additional Appropriation: $ |
n/a |
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Recommended Action |
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Approve Resolution 07-36 authorizing publication of notice of the City’s intent to issue certificates of obligation for airport improvements |
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Executive Summary |
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The costs associated with the construction of T-hangars at Sugar Land Regional Airport were budgeted in the fiscal year 2007 and 2008 Capital Improvements Program, with funding from the issuance of Certificates of Obligation. The total maximum amount of principal to be issued is $4,425,000, which includes $4,325,000 to construction and $100,000 for issuance costs. The project and proposed funding sources were discussed with City Council during the budget workshops for the fiscal year 2007-08 budget. The Certificates will be repaid from airport revenues. Design of the T-hangars is complete and the project is anticipated to be awarded in November, with construction beginning near year-end. This schedule is contingent on completion of the east general aviation complex in October so that the contractor may begin construction on the new T-hangars. The City is preparing to sell Certificates of Obligation on December 4th with delivery of funds by the end of December. · The City qualifies as a small issuer for 2007 which means that the City anticipates issuing less than $10,000,000 in total obligations during the calendar year. · The Certificates will be designated as bank qualified tax-exempt obligations. o Bank qualified obligations are more marketable to banks because the banks are allowed to deduct 80% of their carrying costs associated with bank-qualified tax-exempt obligations. o The treatment of carrying costs for these bank-qualified obligations creates a market for the bonds that may not otherwise exist for the City. · This translates into lower interest costs for the City; bank qualified bonds typically carry a lower interest rate than non-bank qualified bonds. Per the Financial Management Policy Statements (FMPS), the City will utilize Certificates of Obligation to finance public improvements in certain circumstances, including when it is more economical to issue CO’s rather than issuing revenue bonds. The City has typically issued CO’s for Airport Improvements; however the City calculates bond coverage requirements and prepares a five-year financial plan as if the Airport issues revenue bonds. The FMPS were most recently adopted by City Council on August 21, 2007. Since the City will be issuing Certificates of Obligation, the City must publish once a week for two consecutive weeks in a newspaper that is of general circulation in the area, with the first date of publication to be at least thirty-one days before the sale date. The notice must state: 1. Time and place set for the ordinance authorizing the sale 2. The maximum amount and purpose of the certificates to be authorized 3. The manner in which the certificates will be paid by In order to meet the publication dates, staff is presenting Resolution 07-36 for consideration to authorize publication of notices related to the issuance of the Certificates. Attached is the Resolution, which includes the notice that will be placed in the paper. Staff plans to publish the notice on October 24 and 31, 2007. |
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Exhibits |
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RESOLUTION NO. 07-36
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SUGAR LAND, TEXAS, AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION FOR SUGAR LAND REGIONAL AIRPORT T-HANGARS
THE STATE OF TEXAS §
COUNTY OF FORT BEND §
CITY OF SUGAR LAND §
WHEREAS, the City Council of the City of Sugar Land, Texas (the "City"), deems it advisable to issue certificates of obligation of the City in accordance with the notice hereinafter set forth; Now, Therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SUGAR LAND:
Section 1. The facts and recitations contained in the preamble of this resolution are hereby found and declared to be true and correct.
Section 2. The City Secretary is hereby authorized and directed to cause to be published in the manner required by law and in substantially the form attached hereto, a notice of intention to issue certificates of obligation.
Section 3. The notice set forth in Section 2 above shall be published once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be at least thirty-one (31) days before the date tentatively set in said notice for the passage of the ordinance authorizing the issuance of such certificates of obligation.
Section 4. The Mayor, City Secretary, and other officers and agents of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this resolution.
Section 5. This resolution shall take effect immediately upon its passage.
Section 6. The notice and agenda relating to this meeting and heretofore posted by the City Secretary, and the posting thereof, are hereby authorized, approved, and ratified.
PASSED AND APPROVED this 16th day of October, 2007.
/s/ David G. Wallace
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Mayor
City of Sugar Land, Texas
ATTEST:
/s/ Glenda Gundermann
___________________________________
City Secretary
City of Sugar Land, Texas
(SEAL)
APPROVED AS TO LEGALITY:
/s/ Thomas A. Sage
____________________________________
Bond Counsel
VINSON & ELKINS L.L.P.
NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION
NOTICE IS HEREBY GIVEN that the City Council of the City of Sugar Land, Texas (the "City"), will meet at the City Hall, Sugar Land, Texas, at 5:30 p.m. on the 4th day of December, 2007, which is the time and place tentatively set for the passage of an ordinance and such other action as may be deemed necessary to authorize the issuance of the City's certificates of obligation, in the maximum aggregate principal amount of $4,425,000, payable from ad valorem taxation and from a pledge of a subordinate lien on the net revenues of the City's airport system, bearing interest at any rate or rates, not to exceed the maximum interest rate now or hereafter authorized by law, as shall be determined within the discretion of the City Council at the time of issuance and maturing over a period of years not to exceed thirty (30) years from the date thereof, for the purpose of evidencing the indebtedness of the City for all or part of the cost of the construction of airport improvements, and the cost of professional services incurred in connection therewith.
WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 16th day of October, 2007.
/s/ Glenda Gundermann
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City Secretary
City of Sugar Land, Texas
(SEAL)