City Council

Agenda Request

Agenda Of:

11-03-09

Agenda Request No:

vii-a

Initiated By:

Jennifer Brown

Budget & Research Director

Responsible Department:

Budget & Research

Presented By:

Jennifer Brown

Budget & Research Director &

Cliff Kavanaugh

First Southwest Company

Department Head:

Jennifer Brown

Budget & Research Director

Additional Department. Head (s):

n/a

Subject / Proceeding:

2009 Certificates of Obligation

Adopt ordinance No. 1761 authorizing the issuance of City of Sugar Land, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2009

Exhibits:

Preliminary Official Statement

Ordinance No. 1761

Clearances

Approval

Legal:

n/a

Executive Director:

n/a

Purchasing:

n/a

Asst. City Manager:

Karen Glynn

Budget:

n/a

City Manager:

Allen Bogard

Budget

Expenditure Required: $

n/a

Current Budget: $

n/a

Additional Funding: $

n/a

Recommended Action

Approve Ordinance No. 1761, authorizing the issuance of City of Sugar Land, Texas, Combination Tax and Revenue Certificates of Obligation, Series 2009.

Executive Summary

On September 15, 2009, City Council approved Resolution No. 09-31 authorizing publication of notice of the City’s intent to issue Certificates of Obligation not to exceed $18,875,000 for capital improvements. Notices were published in the September 30^th and October 7^th newspaper of record.

The Certificates will fund the following projects that were budgeted in the fiscal year 2008, 2009 and 2010 Capital Improvement Programs. The financing plan includes issuing a total of $43.2M in certificates of obligation during fiscal year 2010. Based on project funding needs, this issue will support $17.69M in projects that are either ready to begin or are already underway and were approved under an intent to reimburse from bond proceeds resolution in FY09. The projects are shown below:

Project	Amount
New Corporate Taxiway "Juliette"	450,000
Ditch H Extension	2,000,000
AMIL Gates Rehabilitation	437,000
Storm Sewer Lateral Tie-in's to Eldridge Road	828,000
Sugar Mill Drainage Improvements	2,550,000
Sugar Creek Drainage Improvements	1,700,000
Additional Conveyance to Jane Long Lake	1,300,000
Emergency Generators	1,300,000
Facility Renovations	400,000
Administrative Annex Improvements	600,000
Land Acquisition - Brazos River Floodway	300,000
Recreation Center	900,000
Imperial Park Improvements	775,000
Settlers Way Park and Colony Bend Park	95,000
Park Land Acquisition - Telfair	1,963,500
First Colony Area Hike & Bike Trail	150,000
Meadowcroft Blvd	30,000
Traffic Technology Upgrades (S)	526,000
Traffic Signal Management / ITS	600,000
Expansion of System Detection Network	480,000
Intersection Analysis and Efficient Roadway Program	310,000
Projects Total	$ 17,694,500

There are an additional $25.5 million in projects that will be funded through a calendar year 2010 bond sale; this sale will be timed with the need for funds for the major projects such as Dulles Avenue Upgrade and University Blvd North and South, which make up the majority of funding needs.

First Southwest, the City’s Financial Advisors, met with the Council Finance/Audit Committee on October 8, 2009 and recommended at that time that the City utilize a negotiated sale for this transaction to allow more flexibility in the structure of the bond sale and take advantage of low market rates to result in a lower cost of borrowing. As such, First Southwest has recommended the City use Morgan Keegan, Coastal Securities and Merrill Lynch as underwriters for this transaction.

The City requested Standard and Poor’s and Fitch Ratings to review and assign ratings to this debt issuance. Conference calls were held on October 15^th with the rating agencies, and Standard & Poor’s has upgraded the City’s rating to “AA+”, while Fitch ratings upheld their “AA+” rating for the City.

First Southwest will present the results of the bond sale for Council approval at the meeting. Delivery of funds is anticipated around December 1, 2009.

Exhibits