RECOMMENDATION:
Approve an ordinance authorizing and approving the terms, amounts and interest rates relating to the sale of City of Houston, Texas, Airport System Special Facilities Revenue Bonds (United Airlines, Inc. Terminal Improvement Projects), Series 2024B (AMT); Ratifying Ordinance No. 2024-852 and approving, confirming and ratifying related matter; making certain findings with respect thereto; and declaring an emergency.
SPECIFIC EXPLANATION:
On November 6, 2024, the City Council adopted Ordinance No. 2024-852 authorizing and approving the issuance, sale and delivery of the City of Houston, Texas, Airport System Special Facilities Revenue Bonds (United Airlines, Inc. Terminal Improvement Projects), Series 2024B (AMT) (the “2024 Special Facilities Bonds”). The 2024 Special Facility Bonds will provide a portion of the funds required to finance (a) improvements to and expansion of the Terminal B central processing facility; (b) construction of the Terminal B North Concourse to replace the original circular flight stations on the north side of Terminal B to accommodate twenty-two (22) narrow-body aircraft equivalent gates with the ability to operate narrow-body or wide-body aircraft and other improvements in connection therewith; (c) replacement of the Terminal B baggage handling system and construction of a new baggage handling system makeup building; and (d) replacement of the regional gate configuration of Terminal B South Concourse to accommodate eighteen (18) large regional gates and add jet bridges and other improvements in connection therewith. The portion of the project to be financed with special facility bonds will not exceed $1.95 billion; additional amounts may be paid with funds from United Airlines.
The Special Facilities Bonds will not constitute an indebtedness of the City, nor will they be a general obligation of the City. No holder of any Special Facilities Bond shall have the right to demand payment of any funds raised or to be raised by taxation and may not be repaid in any circumstances from tax revenues. In addition, the Special Facilities Bonds shall not constitute obligations of the City’s Airport System secured with revenues of the Airport System, nor will revenues be pledged or made available to repay any of the Special Facilities Bonds. The Special Facility Bonds are secured solely by and payable from special facility lease payments made by United Airlines under separate special facility leases for each series of Bonds. The Special Facility Bonds are scheduled to be priced on Tuesday, November 19, 2024.
Pursuant to Ordinance No. 2024-852, the Finance Working Group requests City Council to approve an ordinance approving the Pricing Certificate reflecting the par amount, interest rates, redemption provisions and other terms of the Special Facilities Bonds that are being sold to the underwriters pursuant to the bond purchase contract. It is expected that the City will, in conjunction with the underwriters, execute the bond purchase agreement and letters of representation upon City Council approval of this item on Wednesday, November 20, 2024. If the ordinance is not approved, the bond purchase agreement will be rendered moot. Accordingly, this item is submitted as a “non-tag” item.
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Melissa Dubowski, Chief Business Officer/Director of Finance Chris Hollins, Houston City Controller