ORDER NO. 28970 NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION Came to be heard this the 28th day of December 2004 with a motion made by Commissioner Letz seconded by Commissioner Williams. The Court approved by a vote of 3-1-0 the adoption of Order Authorizing Publication of Notice of intention to Issue Certificates of Obligation. ~ ~ 7 ~ 1,,,.., COMMISSIONERS' COURT AGENDA REOUEST - .~. PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS REQUEST AND DOCUMENTS TO BE REVIEWED BY THE COURT. MADE BY: Pat Tinley OFFICE: County Judge MEETING DATE: December 28, 2004 TIME PREFERRED: SUBJECT: Consider and discuss adoption of Order Authorizing Publication of Notice of Intention To Issue Certificates Of Obligation. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON ADDRESSING THE COURT: County Judge ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays THIS REQUEST RECEIVED BY: THIS REQUEST RECEIVED ON: 5:00 P.M. previous Tuesday. All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. Kerr County JudgelCommissioners' Court From: "Tom Spurgeon" To: ; "'Henderson, Robert"' ; "'Traylor, Robert Dusty (RBC Dain)"' Cc: "Noel Valdez" Sent: Monday, December 20, 2004 2:50 PM Attach: Notice of Intention Order-1.pdf Subject: Kerr County -Notice of Intention Judge Tinley, Bob and Dusty: Attached is a file which contains an Order for consideration by the Court next Tuesday, Dec. 28th, which would authorize the publication of Notice of Intention to issue Certificates of Obligation to purchase the Juvenile Facility from the Hill Country Juvenile Facility Corporation. (Judge Tinley: For purposes of your agenda, please use the caption of the Order as the basis for your agenda language.) You will see that the Order provides that COs would be issued in an amount "not to exceed $2,000,000", which should be sufficient to provide $1,900,000 to the Corporation to purchase the Juvenile Facility and to pay costs of issuance. If it is determined prior to the sale of the COs that more than $100,000 will be needed to pay costs of issuance, state law will allow the County to obtain additional funds to pay costs of issuance through the use of pricing the COs to generate "original issue premium" (but the County could not issue more principal amount of COs than the maximum amount shown in the Notice). Therefore, I am reasonably confident that the $2,000,000 maximum amount figure will be sufficient for this transaction; however, I would like for Bob to briefly weigh in on that number before the Court approves the Order next week. (Dusty: Could you follow-up with Bob???) Bob and Dusty: In addition to the normal costs of issuance, there may be some costs relating to the real estate transaction that will be involved with the purchase of the property from the Corporation, including, perhaps, title insurance (which I calculate to be around $9,900) and a real estate attorney. Those costs could not be covered with original issue premium, but other normal costs of issuance, of course, could be paid with premium. I mention this only for purposes of determining whether $2,000,000 is a correct maximum amount to use in the Notice. Please call if you have any questions. Cordially yours, Thomas K. Spurgeon McCall, Parkhurst & Horton L.L.P. 700 N. St. Mary's, Suite 1525 San Antonio, Texas 78205 Telephone: (210) 225-2800 Telecopy: (210) 225-2984 e-mail: tpurgeon@mphlegal.com Please note that.. effective December 22, 2003, our suite number changed to "Suite 1525." 'The information contained in this electronic communication is confidential and may contain information that is legally privileged and exempt from disclosure under applicable law. The information is intended solely for the use of the individual or entity named above. If you have received this communication in error, please notify the sender immediately by replying to this message, and then delete it from your system. Thank you "If file(s) attached to this message have the extension "PDF", the files have been saved in Adobe's Portable Document Format (PDF) .The PDF format is designed for "universal document exchange" - it allows documents to maintain their appearance and pagination on any computer or printer. PDF file(s) can be viewed and printed using Adobe's free Acrobat Reader, available at http.//www.adobe.com/prodindex/acrobat/readstep.html 12/20/2004 {i"`!i ~. j ..~ ORDER AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION STATE OF TEXAS § COUNTY OF KERR § WHEREAS, in December 2002, the HILL COUNTRY JUV ENILE FACILITY CORPORATION, a nonprofit public facility corporation (the "Corporation") created by KERB COUNTY, TEXAS (the "County") pursuant to the provisions of Chapter 303, Texas Local Government Code, issued and delivered $5,140,000 in principal amount of Hill Country Juvenile Facility Corporation Lease Revenue Bonds, Series 2002 (Kerr County, Texas Juvenile Detention Facilities Project) (the "Lease Revenue Bonds"); and WHEREAS, proceeds of the Lease Revenue Bonds were used to refinance an existing juvenile detention facility located in the County and to construct a new facility to house additional juveniles (collectively, the "Juvenile Facility"); and WHEREAS, the Juvenile Facility is owned by the Corporation but is operated by the Kerr County Juvenile Board (the "Juvenile Board") in accordance with the provisions of state law; and WHEREAS, the Juvenile Facility is leased to the County pursuant to a Lease Agreement between the Corporation and the County that was entered into in connection with the issuance ofthe Lease Revenue Bonds; however, most obligations of the County under the Lease Agreement, including the obligation to make Lease Payments (subject to annual appropriation), were assumed by the Juvenile Board pursuant to an Operating Agreement between the County and the Juvenile Board; and WHEREAS, due to a series of events that occurred subsequent to the issuance of the Lease Revenue Bonds, which had a substantial negative effect on the revenues of the Juvenile Facility, in August 2004, the Juvenile Board exercised its right under the Operating Agreement to nonappropriate for the payment of Lease Payments due on the Lease Revenue Bonds for the fiscal year beginning on October 1, 2004; and WHEREAS, in September 2004, the Commissioners Court similarly exercised the County's right under the Lease Agreement to nonappropriate for the payment of Lease Payments due on the Lease Revenue Bonds for the fiscal year beginning on October 1, 2004; and WHEREAS, as a result of the Juvenile Board and the County exercising their respective rights to nonappropriate, the holders of the Lease Revenue Bonds (the "Bondholders") entered into numerous discussions and negotiations with the Commissioners Court, The Bank ofNew York Trust Company, N.A., as the Trustee for the Lease Revenue Bonds, and representatives ofthe County and the Trustee regarding various issues related to mitigating the loss the Bondholders would experience due to such nonappropriation; and WHEREAS, on December 8, 2004, the Commissioners Court of the County approved an agreement in principal with representatives of the Bondholders to provide $1,900,000 to purchase the Juvenile Facility from the Corporation, which amount would be used in its entirety by the Corporation to pay principal of the outstanding Lease Revenue Bonds, in exchange for the Bondholders providing a full, written release ofthe County, the Corporation, the Juvenile Board and all officials and employees of the County from all claims the Bondholders may have against such entities and persons in connection with the issuance of the Lease Revenue Bonds or the operation of the Juvenile Facility; and WHEREAS, the Commissioners Court hereby determines that it is necessary and desirable to purchase the Juvenile Facility from the Corporation; and WHEREAS, following such acquisition, the Juvenile Facility will be owned by the County and will be operated in accordance with the requirements of state law; and WHEREAS, the Commissioners Court of the County intends to finance the acquisition of the Juvenile Facility from proceeds derived from the sale of one or more series of Certificates of Obligation issued by the County pursuant to Sections 271.041 - 271.063, Texas Local Government Code, as amended; and WHEREAS, pursuant to Section 271.049, Texas Local Government Code, the Commissioners Court deems it advisable to give notice of intention to issue certificates ofobligation in an amount not to exceed an aggregate of $2,000,000 for the purpose of paying, in whole or in part, for the acquisition of the Juvenile Facility, and to pay all or a portion of the legal, fiscal and professional fees in connection with such acquisition and the costs of issuance of such Certificates of Obligation; and WHEREAS, it is hereby officially found and determined that the meeting at which this Order was passed was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. THEREFORE, BE IT ORDERED BY THE COMMISSIONERS COURT OF KERR COUNTY, TEXAS: SECTION 1. APPROVAL OF NOTICE OF INTENTION. Attached hereto as Exhibit A and incorporated herein by reference is a form of the "Notice of Intention to Issue Certificates of Obligation", the form and substance of which is hereby adopted and approved. SECTION 2. AUTHORIZATION TO PUBLISHNOTICEOFINTENTION. The County Clerk shall cause said notice to be published in substantially the form attached hereto in a newspaper ofgeneral circulation in said County, on the same day in each of two consecutive weeks, the date of the first publication thereof to be before the 14th day before the date tentatively set for the passage of the order authorizing the issuance of such Certificates of Obligation as shown in said notice. The County Clerk is authorized to make changes to said Notice as necessary prior to its publication. SECTION 3. INCORPORATION OF RECITALS. The Commissioners Court hereby finds that the statements set forth in the recitals of this Order are true and correct, and the Commissioners Court hereby incorporates such recitals as a part of this Order. SECTION 4. EFFECTIVE DATE. This Order shall become effective immediately upon passage. [The remainder of this page intentionally left blank) PASSEDANDAPPROVED BYTHECOMMISSIONERS COURT OFKERR COUNTY, TEXAS ON THE 28'N DA Y OF DECEMBER, 2004. ge Kerr County, Texas ATTEST: ~~~gSIONE j~ VO ~~~G ~p unty Clerk ~ ~ Kerr County, Texas 99COU ~~~Q`'-' NTY, (SEAL) [SIGNATURE PAGE TO NOTICE OF INTENTION ORDER] KERR COUNTY, TEXAS NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION The Commissioners Court of Kerr County, Texas (the "County") does hereby give notice of intention to issue one or more series of Kerr County, Texas Certificates of Obligation in the maximum aggregate principal amount not to exceed $2, 000, 000 for the purpose of paying, in whole or in part, contractual obligations to acquire from the Hill Country Juvenile Facility Corporation, a Texas nonprofit public facility corporation (the "Corporation"), the existing juvenile detention facility located in the County (the "Juvenile Facility"), for a purchase price of $1,900,000 (the "Project"). All funds received from the County to acquire the Juvenile Facility will be used by the Corporation to pay $1,900,000 to the holders of the Corporation's outstanding Lease Revenue Bonds, Series 2002 (Kerr County, Texas Juvenile Detention Facilities Project) (the "Lease Revenue Bonds"), in exchange for a full, written release by such holders of the County, the Corporation, the Kerr County Juvenile Board and their officials and employees from all claims such holders may have against such entities and persons in connection with the issuance of the Lease Revenue Bonds or the operation of the Juvenile Facility. The County proposes to provide for the payment of such Certificates of Obligation from the levy and collection of ad valorem taxes in the County within the limits provided by law. The Commissioners Court proposes to authorize the issuance of such Certificates of Obligation at 11:00 a.m. on Monday, January 24, 2005, which is a regularly scheduled meeting of the Commissioners Court, at the Union Church Building located on the Shreiner University Campus at the intersection of Travis and Broadway, Kerrville, Texas. /s/ Pat Tinlev County Judge, Kerr County, Texas ~ ~ '7'~ CERTIFICATE FOR ORDER STATE OF TEXAS § COUNTY OF KERR § I, the undersigned County Clerk of I~Rx CourrrY, TExns, hereby certify as follows: I .The Commissioners Court of said County convened in REG U LAR TERM ON THE 28TH DAY OF DECEMBER, 2004, at the County Courthouse, and the roll was called of the duly constituted officers and members of said Commissioners Court, to wit: Pat Tinley, County Judge H.A. "Buster" Baldwin, Commissioner, Precinct 1 William Williams, Commissioner, Precinct 2 Jonathan Letz, Commissioner, Precinct 3 Dave Nicholson, Commissioner, Precinct 4 and all of said officers and members of said Commissioners Court were present, except the following absentees: .Whereupon, among other business, the following was transacted at said Meeting: a written Order entitled: ORDER AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION was duly introduced for the consideration of said Commissioners Court. It was then duly moved and seconded that the Order be adopted; and, after due discussion, said motion carrying with it the adoption of the Order, prevailed and carried by the following vote: AYES: NOES: ~ ABSTENTIONS: ~ 2. A true, full and correct copy of the aforesaid Order adopted at the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; said Order has been duly recorded in said Commissioners Court's minutes of said Meeting; the above and foregoing paragraph is a true, full and correct excerpt from said Commissioners Court's minutes of said Meeting pertaining to the passage of the Order; the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said Commissioners Court as indicated therein; each of the officers and members of said Commissioners Court was duly and sufficiently notified officially and personally, in advance, of the time, place and purpose of the aforesaid Meeting, and that the Order would be introduced and considered for passage at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose, and that said Meeting was open to the public and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code. SIGNED AND SEALED the 28`'' day of December, 2004. (SEAL ~ ~SSIONEA C my Clerk ~0~~ S~oG Kerr County, Texas ~ ~9 ~ ~ COUNTY, ~