Board of Directors Regular Meeting Agenda


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Meeting Date: 12/05/2018  

SUBJECT MATTER:
Receive, consider and act upon report regarding possible defeasance of the Township's Series 2010 Sales Tax and Hotel Occupancy Tax Bonds (as requested by Chairman Bunch); 
FISCAL IMPACT:
Funding required for full redemption of the Series 2010 Sales Tax and Hotel Occupancy Tax Bonds is approximately $7.4 million.  This amount is available in the Township's Bond Redemption Reserve account and Debt Service Fund.
BACKGROUND:
The Township’s Sales Tax and Hotel Occupancy Tax Bonds, Series 2010 became callable in March 2018 and thus are eligible for redemption.  The bonds were originally issued in 2010 for $12,175,000 to provide funding for the purchase and renovation of the Town Hall facility. 
 
During the 2018 and 2019 budget processes, the Board of Directors authorized transfers of funds totaling $6,394,000 to a Bond Redemption Reserve.  Additionally, the Debt Service Fund has $1,066,325 to fund the 2019 principal and interest payments that will be payable on this debt.  The combined total of $7,460,325 is sufficient to fully pay off the outstanding bonds.
 
The purpose of this agenda item is for the Board to determine whether to proceed with defeasance of the Series 2010 Sales Tax and Hotel Occupancy Tax bonds.  If the Board votes affirmatively, staff will work with Masterson Advisors and Schwartz, Page & Harding to prepare the necessary documents, including:
  • Notice of Bond Redemption
  • Resolution Authorizing Defeasance of Outstanding Bonds
  • Defeasance Agreement with Bank of New York Mellon Trust Company, N.A., Paying Agent/Registrar for the Series 2010 Bonds
  • Related Texas Ethics Commission Forms 1295
 
These items will be on the Board’s January 17, 2019 meeting agenda for review and approval.  Once approved by the Board, the Notice of Bond Redemption will need to be provided to Bank of New York Mellon (BONY) at least 45 days before the bond redemption date so that BONY can provide the bondholders with the required 30-day notice.   If the Board wishes to expedite the timeline, a special meeting would need to be held prior to January 17 to approve the necessary documents.
RECOMMENDATION:

Authorize staff to proceed with obtaining the necessary documents for the defeasance of the Township’s Series 2010 Sales Tax and Hotel Occupancy Tax Bonds.


    

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