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 First Lien Revenue Bonds, Series 2020B, 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

Pursuant to Texas Government Code Section 2254.1036, the following written notice is given to the public: The City desires to issue bonds for public purposes as authorized by State law, in accordance with federal securities law, and as further set forth in the ordinance to finance or refinance various public projects.  The proposed bond counsel, Norton Rose Fulbright US LLP (“Norton Rose Fulbright”), is a full service firm that includes a national public finance practice and has the necessary competence, qualification and experience to serve as bond counsel for the City.  Norton Rose Fulbright has previously represented the City in connection with the issuance of various bonds and other obligations for several years. The engagement of Norton Rose Fulbright is in the best interest of the residents of the City, since the legal services requested require specialized experience in municipal finance, federal tax, and state securities law and therefore cannot be adequately performed by the attorneys and supporting personnel of the City. Furthermore, such legal services cannot be reasonably obtained from attorneys in private practice for the payment of hourly fees without contingency because the City will not be obligated to pay any legal fees unless the transaction successfully closes.

RECOMMENDATION:
Approve ordinance authorizing the City of Houston Combined Utility System First Lien Revenue Bonds, Series 2020B, in an aggregate amount not to exceed $46,185,000. These bonds will be privately placed with the Texas Water Development Board.

SPECIFIC EXPLANATION:
The Texas Water Development Board (the “TWDB”) administers a program that provides below market, low-interest rate loans to applicants to assist in meeting clean water needs of communities. This program is known as the Clean Water State Revolving Fund (“CWSRF”), which is open to political subdivisions that own and operate a wastewater system. The City’s Combined Utility System (“CUS”) has participated in this program since the late 1980’s. The City of Houston Combined Utility System First Lien Revenue Bonds, Series 2020B will be issued in an amount not to exceed $46,185,000.

The Finance Working Group (“FWG”) recommends that the City issue the CUS Series 2020B Bonds with the proceeds to be used to fund approved projects in the City’s adopted CIP, fund a reserve fund, if necessary, and pay costs of issuance.

The CUS Series 2020B Bonds will be privately placed with the TWDB, which eliminates the need for underwriters. The closing is expected to occur March 2020. 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 October 29, 2019.

__________________________________                              _____________________________

Tantri Emo, Chief Business Officer/Director of Finance          Chris B. Brown, Houston City Controller

Ordinance No. 2004-0299

Resolution No. 2018-0033