Title
An ordinance approving and authorizing the issuance and sale of the City of Mesquite Special Assessment Revenue Bonds, Series 2019 (Iron Horse Public Improvement District Project), approving and authorizing an Indenture of Trust, a Bond Purchase Agreement, Limited Offering Memorandum, 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 February 4, 2019, the City Council adopted Resolution No. 15-2019 creating the Iron Horse Public Improvement District (PID) to finance certain authorized public improvements that confer a special benefit to property located within the PID. The City will issue special assessment revenue bonds (PID bonds) to finance a portion of the authorized public improvements and will levy assessments based on lot type for residential property and square footage for commercial property in an amount sufficient to pay debt service on the PID bonds. The PID boundaries include 58.213 acres that will develop as mixed use residential and general retail.
Under terms of the Iron Horse Development Agreement, the maximum aggregate principal amount of PID bonds to be issued is $10.2 million. The Special Assessment Revenue Bond, Series 2019 has a par amount of $10,200,000 to construct, reimburse or acquire authorized public improvements that benefit properties located within the PID. Construction of $7,578,371 in authorized infrastructure and soft costs and $1,507,058 in private landscaping, trail, pond and boardwalk improvements are expected to begin immediately upon sale of the bonds and will be completed by the fall of 2022.
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 owner. Repayment of the bonds is contingent on the developer constructing authorized improvements, creating buildable residential and commercial lots to generate assessment revenue. Each property assessment will be collected by the City in addition to ad valorem taxes each year, and 75 percent of the City’s portion of new property taxes will be collected in the Rodeo City TIRZ to reduce the annual assessments of property owners. The City has no legal or moral obligation to repay the bonds from any source other than these pledged revenues.
Unlike traditional general obligation bonds the City issues each year, the City will not receive the proceeds of the PID bond issuances or receive bond interest income, but instead, PID bond proceeds will be held by The Bank of New York Mellon Trust Company, as trustee, and requests for reimbursements by the developer will be made to the City and through P3Works, LLC, its PID Administrator, in accordance with the bond Indenture of Trust and PID Service and Assessment Plan.
Bond pricing is scheduled for the morning of June 3, 2019, at which time the draft versions of the attached bond documents will be updated to reflect actual bond maturities, principal and interest rates, and these final bond documents will be distributed at the Pre-Meeting prior to approval. The attached Bond Ordinance approves the form and content of the final Limited Offering Memorandum, which is typically finalized and posted within seven business days. Closing of the bond sale should occur on or before July 2, 2019.
Recommended/Desired Action
Staff recommends approval of the ordinance.
Attachment(s)
Ordinance
Draft Indenture of Trust
Draft Bond Purchase Agreement
Preliminary Limited Offering Memorandum
Draft Issuer Continuing Disclosure Agreement
Drafter
Ted Chinn
Head of Department
Ted Chinn