R-2016-186 2016-10-10RESOLUTION NO. R2016-186
A Resolution of the City of Pearland, Texas, approving the
issuance of $12,320,000 Development Authority of Pearland Tax
Increment Contract Revenue Bonds, Series 2016; approving a
bond resolution, a private placement letter, and other documents
relating to the bonds; making certain findings and containing
other provisions related thereto.
WHEREAS, by City Ordinance No. 891, the City of Pearland, Texas (the "City")
created Reinvestment Zone Number Two, City of Pearland, Texas (the "Zone") pursuant to
Chapter 311, Texas Tax Code (the "TIRZ Act"); and
WHEREAS, by Resolution No. 2004-107 adopted by the City Council of the City
on June 28, 2004, the City authorized the creation of the Development Authority of
Pearland (the "Authority") as a local government corporation pursuant to Subchapter D of
Chapter 431, Texas Transportation Code (the "LGC Act"), to aid, assist and act on behalf of
the City in the performance of the City's governmental and proprietary functions with
respect to the common good and general welfare of the Zone; and
WHEREAS, by City Ordinance No. R2004-170, the City authorized an agreement
with the Zone and the Authority (the "Tri -Party Agreement"), which sets forth, among
other things, the duties and responsibilities of the Authority, the City and the Zone as they
relate to reimbursements for Project Costs (as defined in the Indenture) in the Zone,
and pursuant to which the City and the Zone have agreed to pay the Authority on an
annual basis certain of the Tax Increments (as defined in the Indenture) then available
in the Tax Increment Fund (as defined in the Indenture); and
WHEREAS, the Tri -Party Agreement authorizes the Authority to issue bonds
secured by payments made to the Authority under the Tri -Party Agreement and further
authorizes the Authority to issue such bonds for the purpose of making developer
reimbursements for Project Costs only with the approval of the City; and
WHEREAS, the Authority has currently outstanding its $9,150,000 Tax Increment
Contract Revenue Bonds, Series 2013; $8,060,000 Tax Increment Contract Revenue
Bonds, Series 2014; and $66,030,000 Tax Increment Contract Revenue and Refunding
Bonds, Series 2015; and
WHEREAS, the Authority desires to issue its Tax Increment Contract Revenue
Bonds, Series 2016 in the aggregate principal amount of $12,320,000 (the "Bonds")
pursuant to a resolution authorizing the issuance of the Bonds (the '`Bond
Resolution") adopted by the Authority on October 10, 2016, and the Authority desires to
use the proceeds from the sale of such Bonds for the purposes of (1) paying Project
Costs (which includes amounts owed to developers under certain development
agreements and the acquisition and the construction of certain public works and public
improvements within the Zone) and (2) paying costs of issuance of the Bonds, all under and
pursuant to the authority of the Act and all other applicable law; and
WHEREAS, none of the proceeds of the Bonds shall be used for the purpose of
paying or otherwise providing for educational facilities, and
WHEREAS, the City Council desires to approve the issuance of the Authority's
Tax Increment Contract Revenue Bonds, Series 2016; Now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. Preamble. The facts and recitations set out in the preamble of this
Resolution are found to be true and correct and are hereby adopted and made a part
hereof for all purposes.
Section 2. Approval of Bonds; Authorization of Agreements; Approval of
Reimbursements. City Council hereby approves the issuance of the Bonds by the
Authority and all reasonable agreements necessary in connection with the issuance of
the Bonds, including without limitation the following: the Private Placement Letter with
Regions Capital Advantage, Inc. (attached hereto as Exhibit A) and any and all other
documents and agreements
reasonable and necessary for the Authority to issue the Bonds (collectively, the
"Agreements"). City Council hereby reconfirms its prior approval of certain developer
reimbursements and acknowledges that a portion of the proceeds from the sale of the
Bonds will be used to make such reimbursements.
Section 3. Approval of Bond Resolution. City Council hereby approves the
Authority's Bond Resolution authorizing the issuance of the Authority's $ 12,320,000
Development Authority of Pearland Tax Increment Contract Revenue Bonds, Series 2016,
a copy of which is attached hereto as Exhibit B.
Section 4. Authorization of other Matters Relating Thereto. 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. Effective Date. This Resolution shall take effect immediately upon
passage.
Section 6. Public Meeting. It is officially found, determined and declared that the
meeting at which this Resolution is adopted was open to the public and public notice of the
time, place and subject matter of the public business to be considered at such meeting,
including this Resolution, was given all as required by the Texas Government Code,
Chapter 551, as amended.
PASSED AND APPROVED this 10th day of October, A.D., 2016.
Y71. Cif 2
TOM REID
MAYOR
ATTEST:
F(NG, l%f
CI P SEC"T TARY
APPROVED AS TO FORM:
DARRIN M. COKER
CITY ATTORNEY
EXHIBIT A
Private Placement
Letter See Transcript
Tab 2
RESOLUTION NO. R2016-186
Exhibit "A"
7
A-1
EXHIBIT B
Bond Resolution
See Transcript Tab
5
RESOLUTION NO. R2016-186
Exhibit "B"
8
RESOLUTION NO. R2016-186
Development Authority of Pearland
Overview of:
$11,910,000* Tax Increment Contract Revenue Bonds, Series 2016
September 26, 2016
* Preliminary, subject to change.
Broker/Dealer Services and Securities offered by BOSC, Inc., an SEC registered investment adviser, a registered broker/dealer, member FINRA/SIPC. SEC registration docs not imply a certain level of skill or
training. Insurance offered by BOSC Agency, Inc., an affiliated agency. Investments and insurance are not insured by FDIC, are not deposits or other obligations of, and are not guaranteed by, any bank or bank
affiliate. Investments arc subject to risks, including possible loss of principal amount invested.
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Development Authority of Pearland
Current Market Conditions
8.00 -
7.50
7.00
6.50
6.00
5.50
5.00
4.50
4.00
3.50
3.00
2.50
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Bond Buyer Index of 20 Municipal Bonds and 25 Municipal Bonds
January 1990 to Present
— BBI 20 General Obligation Debt
— BBI 25 Revenue Debt
Fixed Rates of Interest
Bond Bu} er Index of 20 Muni. General Obligation Bonds
High 7.56% / Low 2.80% / Average 5.06%
Bond Buyer Index of 25 Muni. Revenue Bonds
High 7.83% / Low 2.98% / Average 5.47%
I
3.06%
2.84%
The BBI 20 is published every Thursday. The rate consists of general obligation bonds maturing in 20 years with an average rating equivalent to Moody's "Aa2" and
S&P's "AA." The BBI 25 is also published every Thursday. The rate consists of revenue bonds maturing in 30 years with an average rating equivalent to Moody's "Al"
and S&P's "A+".
1
Development Authority of Pearland
Estimated Sources and Uses of Funds
Private Placement (Market Indication)
Principal Amount of the Bonds: $11,910,000
Less: Expenses: (187,500)
Co -Bond Counsel (Andrews Kurth LLP) 55,000
Co -Bond Counsel (ABHR LLP) 55,000
Financial Advisor 53,500
Attorney General Fee 9,500
Paying Agent/Trustee 6,000
Bank Counsel 3,500
Miscellaneous 5,000
Total Proceeds (Developer Reimbursement): $11,722,500
2.997%
7.317 Years
"All Cost" True Interest Rate (a):
Average Life:
Sale Date:
Delivery Date:
(a) Includes transaction costs.
October 10, 2016
November 15, 2016
2
Development Authority of Pearland
Estimated Debt Service Requirements
Fiscal Year
Ending (9/30)
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
Totals
Current Total
Debt Service
$7,136,659
7,443,144
7,440,158
7,442,997
7,041,437
7,041,317
7,041,885
7,045,427
7,041,254
7,042,133
7,042,790
7,043,088
7,042,840
7,041,856
$99,886,981
Plus: The Series 2016 Bonds
Principal * Interest (a) Total
$280,000
965,000
985,000
855,000
880,000
900,000
925,000
955,000
980,000
1,005,000
1,030,000
1,060,000
1,090,000
$11,910,000
$260,200
319,825
293,288
266,200
242,688
218,488
193,738
168,300
142,038
115,088
87,450
59,125
29,975
$2,396,400
$540,200
1,284,825
1,278,288
1,121,200
1,122,688
1,118,488
1,118,738
1,123,300
1,122,038
1,120,088
1,117,450
1,119,125
1,119,975
$14,306,400
* Preliminary, subject to change. Generates $11,722,500 in proceeds to the Authority.
(a) Interest estimated at 2.75% based on an indication rate as of September 13, 2016. For illustrative purposes only.
Total Debt
Service
$7,136,659
7,983,344
8,724,983
8,721,284
8,162,637
8,164,005
8,160,372
8,164,165
8,164,554
8,164,170
8,162,877
8,160,538
8,161,965
8,161,831
$114,193,381
3
Development Authority of Pearland
Debt Service Requirements: Bond Issue Parameters and Coverage Requirements
For Fiscal Year 2017 - Based on Certified Appraised Values as of January 1, 2016
For Years 2018 - 2029 - Based on Estimated Appraised Values as of July 1 , 2016
City of Pearland
Estimated Value:
1998 Base Year Value:
Year Est. Captured Value:
Biding
9/30 Participation Tax Rate
2016 36% 0.255000
2017 36% 0.255000
2018 36% 0.255000
2019 36% 0.255000
2020 36% 0.255000
2021 36% 0.255000
2022 36% 0.255000
2023 36% 0.255000
2024 36% 0.255000
2025 36% 0.255000
2026 36% 0.255000
2027 36% 0.255000
2028 36% 0.255000
2029 36% 0.255000
$2,629,902,934
(7,172,980)
$2,622,729,954
Collections
5,196,569
5,715,104
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
6,353,563
Brazoria County
Estimated Value: $1,903,297,299
1998 Base Year Value: (4,143,160)
Est. Captured Value: $1,899,154,139
Participation Tax Rate Collections
38% 0.135900 2,076,460
38% 0135900 2,309,847
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
38% 0.135900 2,451,903
Fort Bend Counjy
Estimated Value: $4 465,311
1998 Base Year Value: (3,029,820)
Est. Captured Value: $472,435,491
Total
Participation Tax Rate Collections Collections
0.468075 1,652,214 8,925,243
0.468075 1,958,356 9,983,308
0.468075 2,100,785 10,906,251
2019-2028 0.312050 2,100,785 10,906,251
0.312050 1,400,523 10,205,989
0.312050 1,400, 523 10,205,989
0.312050 1,400, 523 10,205,989
0.312050 1,400,523 10,205,989
0.312050 1,400, 523 10,205,989
0.312050 1,400, 523 10,205,989
0.312050 1,400,523 10,205,989
0.312050 1,400,523 10,205,989
0.312050 1,400,523 10,205,989
0.312050 1,400,523 10,205,989
(a) Generates $11,722,500 in proceeds to the Authority. Based on an estimated rate of 2.75%.
Collection rate of95%. Appraised value estimates provided by Assessments of the Southwest.
Coverage
1125%
7,140,195
7,986,646
8,725,001
8,725,001
8,164,792
8,164,792
8,164,792
8,164,792
8,164,792
8,164,792
8,164,792
8,164,792
8,164,792
8,164,792
DAP
Current
Debt
7,136,659
7,443,144
7,440,158
7,442,997
7,041,437
7,041,317
7,041,885
7,045,427
7,041,254
7,042,133
7,042,790
7,043,088
7,042,840
7,041,856
Total: $99,886,981
Plus:
811,910,000
eries 2016 a
540,200
1,284,825
1,278,288
1,121,200
1,122,688
1,118,488
1,118,738
1,123,300
1,122,038
1,120,088
1,117,450
1,119,125
1,119,975
$14,306,400
"Dotal
Debt
et uiremcnts
7,136,659
7,983,344
8,724,983
8,721,284
8,162,637
8.164,005
8,160,372
8,164,165
8,164,5
8,164,1
8,162,8
8,160,53
8,161,9 .'
$114,193,381
Development Authority of Pearland
Tentative Schedule of Events
1
14
111 12
118 19
X25 26
Se . tember - 2 16
SMTWTFS
1 1 2 3
617 8 9 10
13 114 15 16 17
20121 22 23 24
27 28 29 30
1
12 3 4 5 6 7 8
1 9 10 11 12 13 14 15
116 17 18 19 20 21 22
123 24 25 26 27 28 29
November - 2 16
SMTWTF S
1 2 1 3 4 5
16 7 8 9 110 11 12
113 14 15 16117 18 19
120 21 22 23124 25 26
127 28 29 301
* Preliminary, subject to change.
Date
$11,910,000*
Tax Increment Contract Revenue Bonds, Series 2016
Action
Role
Tuesday, September 20`h Prepare Private Placement Bid Form / BOKF, ABHR, AK, DAP
Term Sheet
Monday, September 26th DAP Meeting to Review Schedule of Events BOKF, DAP
Tuesday, September 27th Distribute Private Placement Bid Form / BOKF, ABHR, AK, DAP
Term Sheet
Friday, October 7th Private Placement Bids Due BOKF
Monday, October 10th DAP Board Approves Sale (Bond Pricing) BOKF, ABHR, AK, DAP
City Council Meeting to Approve Sale
Tuesday, November 15`h Bond Closing BOKF, ABHR, AK, DAP
PARTICIPANTS
DAP — Development Authority of Pearland
BOKF — BOK Financial Securities, Inc.
ABHR — Allen Boone Humphries Robinson LLP
AK — Andrews Kurth LLP
'5