ORDINANCE authorizing, approving, confirming and ratifying certain matters relating to the City of Houston, Texas General Obligation Commercial Paper Notes, Series G-1, In an aggregate principal amount not to exceed $75,000,000 for the purpose of financing certain authorized purposes; approving and authorizing certain authorized officers and employees to act on behalf of the City in the selling and delivery of such 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, delivery and security of the Series G-1 Notes, including the approval of an issuing and paying agency agreement, a credit agreement, and an offering memorandum and the ratification of a commercial paper dealer agreement; and declaring an emergency

SUBJECT:  Ordinance authorizing, approving, confirming and ratifying certain matters relating to the City of Houston, Texas, General Obligation Commercial Paper Notes, Series G-1

RECOMMENDATION: 

Approve an Ordinance authorizing, approving, confirming and ratifying certain matters relating to the City of Houston, Texas, General Obligation Commercial Paper Notes, Series G-1, in an aggregate principal amount not to exceed $75,000,000 for the purpose of providing money for certain authorized purposes; Approving and authorizing certain authorized officers and employees to act on behalf of the City in the selling and delivery of such notes, within the limitations and procedures specified herein and making certain covenants and agreements in connection therewith.

SPECIFIC EXPLANATION: 

Starting in 1993, City Council created commercial paper programs to provide appropriation capacity and “on time” funding for various capital expenditures of the City funded with proceeds of general obligation debt. The issuance of commercial paper has provided an expedient, cost-effective method of providing interim financing. Commercial paper notes are later refinanced with fixed rate bonds with maturities matching the useful lives of the projects or equipment being financed.

The existing revolving credit agreement that supports the Series G-1 commercial paper program has an upcoming expiration date of February 19, 2018. The Series G-1 commercial paper program currently supports the City's Capital Improvement Program.

Toronto-Dominion Bank will provide a revolving credit agreement for the Series G-1 program in the amount of $75 million, plus interest. The liquidity facility will have a 3-year term, with a commitment fee of 26 basis points per annum based on the City’s current long-term ratings.

The Finance Working Group (the “FWG”) also recommends U.S. Bank National Association as paying agent, and Johnson Petrov LLP and Edgardo E. Colon, P.C. as co-bond counsel. JP Morgan, Loop Capital Markets Inc., Ramirez & Co. and Williams Capital Group are recommended as dealers.

This transaction was presented to the Budget and Fiscal Affairs Committee on December 12, 2017.

Recommendation

The FWG recommends approval of this transaction.

Ord. No. 2011-932 (Nov. 09, 2011);

Ord. No. 2013-087 (Jan. 30, 2013);

Ord. No. 2015-077 (Jan. 28, 2015);

Ord. No. 2013-666 (July 24, 2013);

Ord. No.2014-803 (Sept. 03, 2014)

Melissa Dubowski                                      Phone: 832-393-9101