ORDINANCE authorizing issuance of City of Houston, Texas, Subordinate Lien Hotel Occupancy Tax and Parking Revenue Flexible Rate Notes, Series A, in an aggregate principal amount not to exceed $75,000,000; prescribing the terms and conditions thereof; providing for the payment thereof; approving and authorizing certain authorized officers and employees to act on behalf of the City in the selling and delivery of such flexible rate notes, within the limitations and procedures specified herein; making certain covenants and agreements in connection therewith; resolving other matters incident and related to the issuance, sale, security and delivery of such flexible rate notes, including the approval of a paying agent/registrar agreement and note purchase agreements; making other provisions regarding such flexible rate notes and matters incident thereto; authorizing a co-bond counsel agreement; and declaring an emergency

SUBJECT:   Ordinance authorizing the issuance of City of Houston, Texas, Subordinate Lien Hotel Occupancy Tax and Parking Revenue Flexible Rate Note Program, in an amount not to exceed $75 million.

RECOMMENDATION: (Summary)

An ordinance authorizing the issuance of City of Houston, Texas, Subordinate Lien Hotel Occupancy Tax and Parking Revenue Flexible Rate Note Program, in an amount not to exceed $75 million.

SPECIFIC EXPLANATION:

In light of the recent flooding, caused by Hurricane Harvey, the Convention and Entertainment Facilities Department has identified capital funding needs that will require the use of interim financing. The City has examined potential financial instruments to be utilized for this purpose.

The Finance Working Group recommends a Flexible Rate Note Program to be issued through Regions Capital Advantage, Inc., in an amount not to exceed $75 million. The new structure will allow the City the flexibility to use the facility similarly to a commercial paper program, but at a reduced cost for undrawn purposes. The proposed agreement with Regions Capital Advantage, Inc., will have a term of 7 years. Andrews Kurth LLP and Baker Williams Matthiesen LLP are recommended as co-bond counsel. 

This transaction was presented to the Budget and Fiscal Affairs Committee on October 3, 2017.

Recommendation

The Finance Working Group recommends the approval of this item.

Melissa Dubowski                                  Phone: 832-393-9101