R2010-061 - 2010-04-26CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
follows:
I, the undersigned officers of the City of Pearland, Texas (the "City hereby certify as
I. The City Council of the City convened in a regular meeting on May 24, 2010, at the
regular meeting place thereof, within the City, and the roll was called of the duly constituted officers and
members of the City Council, to wit:
Tom Reid
Mayor
Woodrow "Woody" Owens
Councilmember
Scott Sherman
Councilmember
Steve Saboe
Councilmember
Felicia Kyle
Councilmember
Kevin Cole
Councilmember
and all of such persons were present except Steve Saboe, thus constituting a quorum. Whereupon, among
other business, the following was transacted at said meeting: a written
RESOLUTION OF THE CITY OF PEARLAND, TEXAS APPROVING THE
RESOLUTION AUTHORIZING THE ISSUANCE OF THE PEARLAND ECONOMIC
DEVELOPMENT CORPORATION SALES TAX REVENUE BONDS, TAXABLE
SERIES 2010; AUTHORIZING A SALES TAX REMITTANCE AGREEMENT;
AUTHORIZING A CONTINUING DISCLOSURE UNDERTAKING IN
CONNECTION WITH SUCH BONDS; AND MAKING VARIOUS FINDINGS AND
PROVISIONS RELATED TO THE SUBJECTS
(the "Resolution was duly introduced for the consideration of the City Council and read in full. It was
then duly moved and seconded that the Resolution be adopted; and, after due discussion, such motion,
carrying with it the adoption of the Resolution, prevailed and carried by the following vote:
AYES: -3 NAYS: 1 ABSTENTIONS: 0
2. That a true, full and correct copy of the Resolution adopted at the meeting described in
the above and foregoing paragraph is attached to and follows this certificate; that the Resolution has been
duly recorded in the City Council's minutes of such meeting; that the above and foregoing paragraph is a
true, full and correct excerpt from the City Council's minutes of such meeting pertaining to the adoption
of the Resolution; that the persons named in the above and foregoing paragraph are the duly chosen,
qualified and acting officers and members of the City Council as indicated therein; that each of the
officers and members of the City Council was duly and sufficiently notified officially and personally, in
advance, of the date, hour, place and subject of the aforesaid meeting, and that the Resolution would be
introduced and considered for adoption at such meeting, and each of such officers and members
consented, in advance, to the holding of such meeting for such purpose; that such meeting was open to the
public as required by law; and that public notice of the date, hour, place and subject of such meeting was
given as required by the Open Meetings Law, Chapter 551, Texas Government Code
HOU:30167171
SIGNED AND SEALED this May, 2010.
Ci ecret XIEWS Mayor
CI OF A CITY OF PEARLAND, TEXAS
(SEAN,
HOU:3016717.1
RESOLUTION NO. 2010 -61
RESOLUTION OF THE CITY OF PEARLAND, TEXAS APPROVING THE
RESOLUTION AUTHORIZING THE ISSUANCE OF THE PEARLAND
ECONOMIC DEVELOPMENT CORPORATION SALES TAX REVENUE
BONDS, TAXABLE SERIES 2010; AUTHORIZING A SALES TAX
REMITTANCE AGREEMENT; AUTHORIZING A CONTINUING
DISCLOSURE UNDERTAKING IN CONNECTION WITH SUCH BONDS;
AND MAKING VARIOUS FINDINGS AND PROVISIONS RELATED TO
THE SUBJECTS
WHEREAS, on January 21, 1995, the voters of the City of Pearland, Texas (the "City
approved the levy of a one -half of one percent sales and use tax (the "Sales Tax to be used for
the benefit of the Pearland Economic Development Corporation (the "Corporation including,
among other things, for paying the costs of acquisition and construction of streets and roads and
drainage and related improvements which promote or develop new or expanded business
enterprises (the "Project
WHEREAS, the City, by Resolution No. R95 -36 duly adopted on May 22, 1995,
authorized the creation of the Corporation to act on behalf of the City by receiving and
expending revenues from the Sales Tax for various projects which promote or develop new or
expanded business enterprises;
WHEREAS, on June 26, 1995, the Corporation was duly created, incorporated, chartered
and organized pursuant to Article 5190.6, Texas Revised Civil Statutes (the "Act
WHEREAS, pursuant to the Act, the Corporation is authorized to issue bonds for the
purposes of paying the costs of the Project, said bonds being payable from and secured by the
proceeds of the Sales Tax;
WHEREAS, the Corporation desires to issue and sell its Sales Tax Revenue Bonds,
Taxable Series 2010 in an aggregate principal amount of $7,685,000 (the "Bonds for the
purposes of (i) paying the costs of the Project and (ii) paying the costs of issuing the Bonds;
WHEREAS, in connection with the issuance of the Bonds, the City has agreed, on behalf
of the City and the Corporation, to provide certain financial information and operating data
annually in accordance with the Rule (as defined herein); and
WHEREAS, the City and the Corporation desire to enter into a certain Sales Tax
Remittance Agreement in connection with the Project (the "Sales Tax Remittance Agreement
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS, as follows:
1
HOU:3011453.4
1. Findings and Determinations It is hereby officially found and determined that all
of the facts recited in the preamble hereto are true and correct and the preamble is incorporated
into and made a part of this Resolution.
2. Approval of Project and Expenditures; Authorization of Sales Tax Remittance
Agreement. The Project, all reasonable expenditures necessary to implement the Project and the
Sales Tax Remittance Agreement, substantially in the form attached hereto as Exhibit A, are
hereby approved. The City Council, by a majority vote of its members, at a regular meeting,
hereby approves the form, terms and provisions of the Sales Tax Remittance Agreement between
the City and the Corporation and authorizes the execution and delivery of the Sales Tax
Remittance Agreement.
3. Tax Levy and Pledge The City has covenanted and agreed in the Sales Tax
Remittance Agreement and hereby authorizes the appropriate City officials to take all steps
necessary and authorized under the Act and other applicable laws to continuously levy and
collect the Sales Tax at the rate of 1 /z% so long as any of the Bonds and any Additional Bonds (as
defined in the Sales Tax Remittance Agreement) are outstanding in the manner and to the
maximum extent permitted by applicable law. The City hereby agrees that it will not cause a
reduction, abatement, or exemption in the Sales Tax, or in the rate in which it is authorized to be
collected. The City also agrees that any repeal of the right and power to levy the Sales Tax will
not be effective until all the Bonds and any Additional Bonds have been paid in full or until they
are legally defeased in accordance with the Resolutions authorizing their issuance. The City
hereby agrees to pay to the Corporation, by a direct deposit into the Corporation's Sales Tax
Revenue Fund, 100% of the revenues collected from the annual levy and assessment of the Sales
Tax, less any amounts due to the Comptroller of Public Accounts of the State of Texas for
collection costs and other charges, for the term of the Sales Tax Remittance Agreement.
3. Approval of Bond Resolution The City hereby ratifies the Resolution authorizing
the issuance of the Corporation's Sales Tax Revenue Bonds, Taxable Series 2010, in the
aggregate principal amount of $7,685,000 (the "Bond Resolution substantially in the form
attached hereto as Exhibit `B," and hereby approves said Bond Resolution and the issuance of
the bonds described therein.
4. Continuing Disclosure Undertaking
(a) The City shall provide annually to the Municipal Securities Rulemaking Board
(the "MSRB within six months after the end of each fiscal year ending in or after 2010,
financial information and operating data with respect to the City. Any financial statements so to
be provided shall be (1) prepared in accordance with the accounting principles and (2) audited, if
the City commissions an audit of such statements and the audit is completed within the period
during which they must be provided. If audited financial statements are not so provided, then the
City shall provide unaudited financial statements for the applicable fiscal year by the required
time, and audited financial statements when and if audited financial statements become available.
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section.
2
HOU:3011453.4
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to
documents (i) available to the public on the MSRB's internet web site or (ii) filed with the SEC.
(b) The City shall notify the MSRB in a timely manner, of any of the following events
with respect to the Bonds, if such event is material within the meaning of the federal securities
laws:
(i) Principal and interest payment delinquencies;
(ii) Non payment related defaults;
(iii) Unscheduled draws on debt service reserves reflecting financial
difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) Substitution of credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions or events affecting the tax- exempt status of the
Bonds;
(vii) Modifications to rights of holders of the Bonds;
(viii) Bond calls;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the Bonds;
and
(xi) Rating changes.
The District shall also notify the MSRB in an electronic format prescribed by the MSRB,
in a timely manner, of any failure by the District to provide financial information or operating
data in accordance with this Section by the time required by this Section.
(c) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Article for so long as, but only for so long as,
the City remains an "obligated person" with respect to the Bonds within the meaning of the Rule,
except that the City in any event will give the notice required by Section 5 of any Bond calls and
defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Article are for the sole benefit of the Owners and beneficial owners
of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal
or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
c
HOU:3011453.4
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Article or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT
OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH
BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Article shall
constitute a breach of or default under this Resolution for purposes of any other provision of this
Resolution.
Nothing in this Article is intended or shall act to disclaim, waive or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Article may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status or type of operations of the City, but only if (1) the
provisions of this Article, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2) either (a) the Owners of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Resolution that authorizes such an
amendment) of the Outstanding Bonds consent to such amendment or (b) a person or entity that
is unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the Owners and beneficial owners of the
Bonds. If the City so amends the provisions of this Article, it shall include with any amended
financial information or operating data next provided in accordance with Section 4 an
explanation, in narrative form, of the reasons for the amendment and of the impact of any change
in the type of financial information or operating data so provided. The City may also amend or
repeal the provisions of this Article if the SEC amends or repeals the applicable provisions of the
Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid,
and the City also may amend the provisions of this Article in its discretion in any other manner
or circumstance, but in either case only if and to the extent that the provisions of this sentence
would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary
offering of the Bonds.
(d) As used in this Section, the following terms have the meanings ascribed to such
terms below:
11
HOU:3011453.4
WSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
6. Further Actions The Mayor, City Secretary and the other officials of the City are
hereby authorized, jointly and severally, to execute and deliver such certificates, documents, or
papers necessary and advisable, and to take such actions as are necessary to carry out the intent
and purposes of this Resolution.
7. Severability If any word, phrase, clause, sentence, paragraph, section or other
part of this Resolution, or the application thereof to any person or circumstance, shall ever be
held to be invalid or unconstitutional by any court of competent jurisdiction, the remainder of
this Resolution and the application of such word, phrase, clause, sentence, paragraph, section or
other part of this Resolution to any other persons or circumstances shall not be affected thereby.
8. Effective Date This Resolution shall be in full force and effect from and upon
adoption.
9. Repealer All orders, Resolutions and Resolutions, or parts thereof, inconsistent
herewith are hereby repealed to the extent of such inconsistency.
5
HOU:3011453.4
PASSED AND APPROVED on this 24th day of May, 2010.
Mayor
S -1
HOU:3011453.3
ATTEST:
EXHIBIT A
SALES TAX REMITTANCE AGREEMENT
'Ag a
HOU:3011453.4
EXHIBIT B
BOND RESOLUTION
HOU:3011453.4
BankofAmerac.
Jill NI.Forsyth Banc of America Public Capital Corp
Senior Vice President AZ3-588-02-02
Government Finance Specialist 14648 N.Scottsdale Road,Suite 250
Scottsdale,AZ 85254
Email: jill.m.forsytb@bankofamerica.com
Tel: (480)624-0369
Fax:(415)796-1301
SUMMARY OF TERMS AND CONDITIONS
Date: April 12, 2010
Borrower: Pearland Economic Development Corporation("Borrower")
Lender: Bank of America Public Capital Corp, Bank of America, N. A. or designee
("Lender")
Structure: Sales Tax Revenue Bond
Security: Pledge of the Pledged Revenues as defined in the Term Sheet requesting
proposals for private placement financing.
Term: 20 Years
Interest Rates: Taxable Floating Rate: 5.12%
This is the floating rate option, will be booked as a taxable transaction and the
formula is described below.
Index (6month LIBOR) 0.45563% (as of 4/12/10)
Spread over Index 4.66
Taxable Rate 5.12%
This assumes semi-annual payments in arrears
Market Disruption: Notwithstanding anything contained herein to the contrary, in the event any
material change shall occur in the financial markets after the date of this proposal
letter, including but not limited to any governmental action or other event
which materially adversely affects the extension of credit by banks, leasing
companies or other lending institutions, Lender may modify the indicative
pricing described above.
Payments: See attached amortization schedule. Any modifications to these schedules may
affect rates and liquidity premiums and are subject to pricing adjustments.
Page 2
Early Termination: The prepayment will be allowed after the first five years of the term at par. The
amount paid will also include accrued interest, principal balance and any other
charges due. Prepayments must be made in full.
Opinion of Counsel: Borrower's counsel shall deliver a validity opinion to Lender at closing in form
and substance satisfactory to Lender.
Documentation: This transaction is subject to acceptable documentation in Lender's sole
discretion. Legal Fees not to exceed$3,500.00
Credit Approval: This transaction has not been formally credit approved but will be submitted
quickly after an acceptance of terms. It has however passed a successful
"pre-screen" through the credit committee.
Proposal Expiration:This proposal will expire on April 26, 2010 and may be re-issued at Lender's
discretion.
Time Table: The credit process typically takes about 2 weeks and then documents may be
prepared for execution. Once the documents have been received and are
acceptable, we fund within 24 hours. The entire process should not take any
more than 30 days.
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Pearland Economic Development
Corporation
$7,685,000 Sales Tax Revenue Bonds, Series 2010
April 26, 2010
RBC Capital Markets®
RBC ®
sec ?.i� 12�'T`fN�D
Pearland Economic Development Corporation
Sources and Uses of Funds
$7,685,000
Sales Tax Revenue Bonds, Series 2010
Principal Amount of the Bonds $7,685,000
Less: Reserve Fund (665,235)
Less: Expenses (123,765)
Bond Proceeds: $6,896,000
Rate on the Bonds: (a) 5.130%
"All Cost" True Interest Rate on the Bonds: (b) 5313%
Weighted Average Maturity: 12.433 Years
Average Annual Debt Service: $636,783
Sale Date: April 26, 2010
Closing/Delivery Date: June 29, 2010
First Interest Payment Date: September 01, 2010
First Principal Payment Date: September 01, 2011
Call Option: 9/1/2015 @ Par
Offer Expiration: April 26, 2010
(a) Based on 6-Month LIBOR plus spread. (LIBOR+466 basis points=5.13%). RBC Capital Markets®
Rate resets every 6 months.
RBC
(b) Includes expenses. m
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Pearland Economic Development Corporation ro,,a=A„o.
Debt Service Requirements
Current Total
Total Debt Plus:Series 2010 Bonds Debt Service
Date Service Principal Interest Total Requirements
03/01/2010 $425,834 $425,834
09/01/2010 • 990,834 • . • • • .. . ..•$67,897. • $67,897 1,058,731
03/01/2011 415,753 197,120 (a) 197,120. 612,873
09/01/2011 1,000,753 • $215,000 230,550: 445,550- 1,446,303
03/01/2012 404,628 224,100 224,100 628,728
09/01/2012 • . 1.,01.4,628 .. 230,000 . 224,100 . •454,100 1,468,728
03/01/2013 392,453 217,200 217,200 609,653
• 09/01/2013 . . 1,027,453 245,000 • 217,200.. 462,200 ' 1,489,653 i
03/01/2014 378,703 209,850 209,850 588,553
09/01/2014 1,038,703 260,000 ' 209,850: 469,850 1,508,553 j
03/01/2015 364,428 202,050 202,050 566,478
09/01/2015 1,054,428 • 275,000 202,050 • • 1477,050. . • 1,531,478
03/01/2016 349,478 193,800 193,800 543,278
09/01/2015 1,069,478 290,000 (b) • 193,800. .. , . . 483,800 . 1,553,278
03/01/2017 332,378 185,100 185,100 517,478
09/01/2017 1,092,378• • 300,000 (b) • 185,100' 485,100 .1,577,478 1
03/01/2018 314,334 176,100 176,100 490,434
09/01/2018 • . 1,109,334 • 320,000 (b) 176,100 496,100 1,605,434
03/01/2019 295,288 166,500 166,500 461,788
09/01/2019 • 1,130;288 • 340,000 (b) 166,500 506,500 . 1,636;788
03/01/2020 278,063 156,300 156,300 434,363
09/01/2020 1,153,063 355,000 (b). 156,300 511,300 1,664,363
03/01/2021 259,813 145,650 145,650 405,463
09/01/2021 • 1,169,813 375;000...(b) • 145,650 . 520,650 . 1,690;463
03/01/2022 240,538 134,400 134,400 374,938
09/01/2022 1,190,538 . . 400,000 (b) 134,400 534,400 1,724;938
03/01/2023 219,600 122,400 122,400 342,000
09/01/2023 1,214,600 420,000 (b) . 122,400 542,400 ;1,757,000
03/01/2024 197,569 109,800 109,800 307,369
09/01/2024 • • 1,237,569 440,000 (b) • 109,800 • 549,800 .1,787,369
03/01/2025 174,269 96,600 96,600 _ 270,869
09/01/2025 . • 1,264,269 465,000 (b) 96,600 . • 561.,600 1;825,869
03/01/2026 149,663 82,650 82,650 232,313
09/01/2026 . 1,289,663 495,000 (b). 82,650 577,650 1,867,313
03/01/2027 123,919 67,800 67,800 191,719
09/01/2027 1,313,919 525,000 (b) 67,800 • 592,800 1,906,719
. 03/01/2028 94,169 52,050 52,050 146,219
• 09/01/2028 1,349,169 . 550,000 (b) 52,050 602,050 . 1,951,219
03/01/2029 64,363 35,550 35,550 99,913
09/01/2629 1,384,363 575,000 (b) 35,550 610,550 1,994,913
03/01/2030 33,013 18,300 18,300 51,313
09/01/2030 1,423,013 • 610,000 (b) 18,300 628,300 . .2,051,313 i
Total $30,026,506 $7,685,000 $5,687,967 $13,372,967 $43,399,474
(a) Initial Interest Rate is 5.13%. Assumes an Interest Rate of 6.00% after the initial RBC Capital Markets®
floating rate term of March 1,2011. RBCm 2
(b) Bonds callable on 9/1/2015 at par.
LASgi
Pearland Economic Development Corporation A-
LIBOR
London Interbank Offered Rate (LIBOR) is a daily rate based on the interest rates at
which banks borrow unsecured funds from other banks in the London wholesale money
market (or interbank market). LIBOR is fixed on a daily basis by the British Bankers'
Association. The LIBOR is derived from a filtered average of the world's most
creditworthy banks' interbank deposit rates for larger loans with maturities between
overnight and one full year.
LIBOR is the world's most widely used benchmark for short-term interest rates. It's
important because it is the rate at which the world's most preferred borrowers are able to
borrow money. It is also the rate upon which rates for less preferred borrowers are based.
6-Month LIBOR Rate •
January 1, 1990 to Present
Imo
• Rate
9.00 - -- - - . ..... -- -Maximum 9.00000% •-
• Minimum 0.38250%
8.00 -.. ;---- - --- - .....-..-- - Average 4.40200%- •
-
• Current 0.46500%
• 7.00 — ... — - -
•
6.00 --- --. . . . ..._.__.—. — •
3.00 - - - - - ---
2.00 - -
0.00
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O\ 01 O\ O~ O\ O\ O� O\\O O O� O O O O O O O O O O O
•••
GM LIBOR Rolling Average
RBC Capital Markets®
RBC a