Title
An ordinance approving and authorizing the issuance and sale of the City of Mesquite Special Assessment Revenue Bonds, Series 2023 (Heartland Town Center Public Improvement District Phase #2 Specific Improvements 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 December 18, 2017, the City Council adopted Resolution No. 80-2017 creating the Heartland Town Center Public Improvement District (PID) to finance certain authorized public improvements that confer a special benefit to property located within the PID. The PID boundaries only include the 121.3-acre tract that has been developed as single-family residential, known as the Trailwind subdivision in Kaufman County.
Under terms of the Heartland Town Center Development Agreement, the maximum aggregate principal amount of PID bonds to be issued is $14 million. On September 4, 2018, the City issued PID bonds in the amount of $5,410,000.00 for Phase #1 Specific Improvements and $1,835,000.00 for Phase #2 Major Improvements, leaving a remaining bond authorization of $7,245,000.00 for Phase #2 Specific Improvements. The proceeds from these bonds were used to reimburse the developer for construction of authorized public improvements that benefit properties located in the first phase of development and those public improvements that benefit all properties within the entire PID.
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 along with 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.
On November 1, 2021, the City Council passed Resolution No. 73-2021 approving a Reimbursement Agreement for Phase #2 Specific Improvements, and on December 6, 2021, the City Council adopted Ordinance No. 4921 to levy assessments on Phase #2 until such time that home construction within Phase #2 would reach a point where the lien-to-value ratio would meet the minimum 3:1 ratio required in the Development Agreement to issue bonds for Phase #2.
The developer has completed construction of the public infrastructure in Phase #2 and has requested that the City issue the remaining PID bonds to fully reimburse these costs, which amount to $4,250,029.07, less the assessment revenue collected by the City from the fiscal year 2022 levy. With added issuance costs of the bond sale, the estimated par amount of the Phase #2 Specific Improvements bonds is $4,960,000.00.
Bond pricing is scheduled on the morning of April 3, 2023, at which time the bond documents will be updated to reflect the actual bond par amount, maturities, and 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 April 27, 2023.
Recommended/Desired Action
Staff recommends approval of the ordinance.
Attachment(s)
Ordinance
Drafter
Ted Chinn
Head of Department
Ted Chinn