ORDINANCE supplementing the City of Houston, Texas Master Ordinance No. 2004-299; providing for the issuance of the City of Houston, Texas, Combined Utility System Subordinate Lien Revenue Bonds, Series 2017C, providing for the amounts, interest rates, prices, and terms thereof and other matters relating thereto; providing for the payment thereof; making other provisions regarding such bonds and matters incident thereto; authorizing a Co-Bond Counsel Agreement; authorizing execution and delivery of a Paying Agent/Registrar Agreement; and declaring an emergency

SUBJECT:  Approve ordinance supplementing the City of Houston, Texas Master Ordinance authorizing the issuance of City of Houston, Texas Combined Utility System Subordinate Lien Revenue Bonds, Series 2017C.

RECOMMENDATION: (Summary) Approve ordinance authorizing the City of Houston Combined Utility System Subordinate Lien Revenue Bonds, Series 2017C, in an aggregate amount not to exceed $84 million. These bonds will be privately placed with the Texas Water Development Board.

SPECIFIC EXPLANATION:

The Texas Water Development Board (the “TWDB”) administers programs that provide below market, low-interest rate loans to applicants. One of these programs is known as the State Water Implementation Revenue Fund (“SWIRFT”), which is open to political subdivisions undertaking a project included in the adopted regional water plans and in the state water plan. City of Houston Combined Utility System Subordinate Lien Revenue Bonds, Series 2017C will be issued in an amount not to exceed $84 million. 

On August 16, 2017 City Council approved the first step in this transaction, which was the ordinance for the financing agreement between City of Houston and TWDB for the design and construction of Northeast Water Purification Plant expansion and related water transmission lines. The ordinance covered by this RCA is step two in the same financing arrangement. The Finance Working Group (“FWG”) recommends that the City issue the CUS Series 2017C bonds with the proceeds to be used to fund approved projects in the City’s adopted CIP and pay costs of issuance.

The CUS Series 2017C bonds will be privately placed with the TWDB, which eliminates the need for underwriters. The closing is expected to occur by mid of November 2017. Norton Rose Fulbright LLP and Burney & Foreman are recommended as co-bond counsel.

This transaction was presented to the Budget and Fiscal Affairs Committee on August 1, 2017.

Recommendation:

The FWG recommends the approval of this item.

Ordinance No. 2004-299

Melissa Dubowski                                      Phone: 832-393-9101