Title
An ordinance approving and authorizing the issuance and sale of the City of Mesquite, Texas, Special Assessment Revenue Bonds, Series 2024 (Solterra Public Improvement District (PID) Improvement Area C-3 Project), approving and authorizing an Indenture of Trust, a Bond Purchase Agreement, Limited Offering Memorandum, a Continuing Disclosure Agreement, and other agreements and documents in connection therewith, making findings with respect to the issuance of such bonds, and providing an effective date.
Body
On April 5, 2021, the City Council adopted Resolution No. 15-2021 creating the Solterra Public Improvement District (PID) to finance certain authorized public improvements that confer a special benefit to property located within the PID. The PID boundaries include 1,424.398-acres of land to be developed as single-family residential. Per the PID Petition, the maximum aggregate principal amount of PID bonds to be issued is $295 million, and the Development Agreement, as amended, caps the total reimbursement of PID bonds, TIRZ revenues and assessments at $297,560,206. On July 17, 2023, the City issued PID bonds for the first phases of the development in Improvement Areas A-1, C-1, and C-2.
This bond sale is in the approximate par amount of $5,435,000.00 (subject to pricing) to reimburse the Developer, HC Solterra, LLC and Lennar Homes, the cost of authorized public improvements in Improvement Area C-3 (see attached location map). A Reimbursement Agreement for Area C-3 was executed with the Developer on July 17, 2023, which caps the total reimbursement of net bond proceeds and assessment revenue for Improvement Area C-3 in an amount not to exceed $9,526,606.00.
PID bonds will never constitute an indebtedness or general obligation of the City, but are special obligations of the City payable solely from the assessments on each property. Debt service of the PID bonds is paid entirely from assessments levied on property within the PID in annual installments, which are billed out and collected by the City around the same time as ad valorem property taxes. The City has no legal or moral obligation to repay the bonds from any source of revenue other than these pledged assessments.
Bond pricing is scheduled for the morning of October 7, 2024, at which time the bond documents will be updated to reflect the actual bond paramount, maturities, and principal and interest rates. The attached Bond Ordinance approves the form and content of the Limited Offering Memorandum, which is typically finalized and posted within seven business days. Closing of the bond sale should occur on or before November 4, 2024.
Recommended/Desired Action
Staff recommends approval of the ordinance.
Attachment(s)
Ordinance
Bond Purchase Agreement
Limited Offering Memorandum (will be provided in Friday’s mail packet)
Area C-3 Lot Type Map
Drafter
Ted Chinn
Head of Department
Ted Chinn