Board of Directors WED Regular Meeting Agenda


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Meeting Date: 01/16/2019  

SUBJECT MATTER:
Receive, consider and act upon defeasance of The Woodlands Township ‘s Series 2010 Sales Tax and Hotel Occupancy Tax Bonds:
  1. Approve Notice of Bond Redemption and authorize issuance thereof;
  2. Adopt Resolution Authorizing Defeasance of Outstanding Bonds and Authorizing Notice of Redemption of Same; and
  3. Approve Defeasance Agreement with The Bank of New York Mellon Trust Company, N.A., Paying Agent/Registrar;
FISCAL IMPACT:
Funding required for full redemption of the Series 2010 Sales Tax and Hotel Occupancy Tax Bonds is approximately $7,374,892.  This amount is available in the Township's Bond Redemption Reserve account and Debt Service Fund.
BACKGROUND:
At the December 5, 2018 Board of Directors meeting, staff was authorized to proceed with obtaining the necessary documents for the defeasance of the Township’s Series 2010 Sales Tax and Hotel Occupancy Tax Bonds.
 
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 in the amount of $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 would have been payable on this debt had it not been paid off.  The combined total of $7,460,325 is sufficient to fully pay off the outstanding bonds and associated costs, which are estimated to total $7,374,892 per the attached Sources and Uses of Funds report prepared by Masterson Advisors.
 
A bond redemption timetable was also prepared by Masterson Advisors and is attached for the Board’s reference.  The bond redemption date is scheduled for February 22, 2019. 
 
In order to proceed with the defeasance of the Series 2010 Sales Tax and Hotel Occupancy Tax bonds, the Board will need to approve the following documents at the January 16 Board meeting.  These documents have been prepared by Schwartz, Page & Harding, L.L.P. and are attached for review.
  • Notice of Bond Redemption
  • Resolution Authorizing Defeasance of Outstanding Bonds and Authorizing Notice of Redemption of Same
  • Defeasance Agreement with The Bank of New York Mellon Trust Company, N.A., Paying Agent/Registrar for the Series 2010 Bonds

A Certificate of Paying Agent Verifying Notice is also attached.  The Bank of New York Mellon Trust Company will execute this document upon providing the required notice of redemption to the bondholders.  It is not necessary for the Board of Directors to approve this document, but it is attached for reference.
RECOMMENDATION:

Approve Notice of Bond Redemption and authorize issuance thereof; and

 

Approve Resolution Authorizing Defeasance of Outstanding Bonds and Authorizing Notice of Redemption of Same; and

 

Approve Defeasance Agreement with Bank of New York Mellon Trust Company, N.A., Paying Agent/Registrar for the Series 2020 Bonds

Attachments
Sources and Uses of Funds for Bond Redemption
Bond Redemption Timetable
Notice of Bond Redemption
Resolution Authorizing Defeasance of Outstanding Bonds
Defeasance Agreement with The Bank of New York Mellon Trust Company
Certificate of Paying Agent Verifying Notice


    

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