CC Resolution No. 2,705RESOLUTION NO.2,705
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO
ISSUE CERTIFICATES OF OBLIGATION AND OTHER MATTERS
RELATING THERETO; AND PROVIDING FOR THE EFFECTIVE DATE
THEREOF.
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WHEREAS, the City Council (the "City Council") of the City of Baytown, Texas (the
"City"), finds that the design, planning, acquisition, construction, renovation, and equipping of
the public property and payment of fees for professional services described in Exhibit "A" would
be beneficial to the inhabitants of the City, and such property is needed to perform essential
governmental functions; and
WHEREAS, the City Council has determined that certificates of obligation (the
"Certificates") should be issued pursuant to the provisions of the Certificate of Obligation Act of
1971, Section 271.041 et seq., Texas Local Government Code (the "Act"), for such purposes;
and
WHEREAS, prior to the issuance of the Certificates, the City is required under the Act to
publish notice of its intention to issue the Certificates in a newspaper of general circulation in the
City and on the City's website, the notice stating: (i) the time and place the City Council
tentatively proposes to pass the ordinance authorizing the issuance of the Certificates; (ii) the
purpose of the Certificates proposed to be issued; (iii) the manner in which the City Council
proposes to pay the Certificates, whether by taxes, revenues, or a combination of the two; (iv)
along with the following: (A) the then -current principal of all outstanding debt obligations of the
City, (B) the then -current combined principal and interest required to pay all outstanding debt
obligations of the City on time and in full, which may be based on the City's expectations
relative to the interest due on any variable rate debt obligations, (C) the maximum principal
amount of the Certificates to be authorized, and (D) the estimated combined principal and
interest required to pay the Certificates to be authorized on time and in full; (v) the estimated
interest rate for the Certificates to be authorized or that the maximum interest rate for the
Certificates may not exceed the maximum legal interest rate; and (vi) the maximum maturity
date of the Certificates to be authorized; NOW TI 1EREFORE,
BE IT RESOLVED BY TIIE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, THAT:
Section 1: The form and substance of the form of notice of intention to issue the
Certificates, which is attached hereto as Exhibit "A", is hereby adopted and approved.
Section 2: The Mayor or the City Clerk shall cause the notice in substantially the form
attached hereto (A) to be published in a newspaper, as defined in Section 2051.044, Texas
Government Code, of general circulation in the City for two consecutive weeks, and (B) to be
posted on the City's website continuously from the first date of publication until adoption of the
ordinance authorizing the issuance of the Certificates. The date of first publication in a
newspaper and of first posting on the City's website is to be at least 45 days prior to the date
tentatively set for adoption of the ordinance authorizing the issuance of the Certificates.
Section 3: This section of this resolution declares the intention of the City to
reimburse the expenditures for the Project (hereinafter defined) with the proceeds of the
Certificates. The City presently intends to reimburse the expenditures by issuing the Certificates,
the interest on which is excludable from gross income under section 103 of the Internal Revenue
Code of 1986, as amended. The City reasonably expects to issue Certificates in an aggregate
maximum principal amount now estimated to be $20,500,000 for the purpose of paying the costs
for the acquisition of certain property and related improvements for the City listed in Exhibit "A"
attached hereto (the "Project"). The City intends to reimburse the expenditures not later than 18
months after the date the original expenditure is paid or the date the Project is placed in service
or abandoned. However, in no event shall the City reimburse expenditures more than three years
after the original expenditure is paid; provided, however, if the Project is a construction project
for which the City and a licensed architect or engineer have certified that at least five years are
necessary to complete the Project, the maximum reimbursement period shall be five years after
the date of the original expenditure. The City intends that this section of this resolution satisfy
the official intent requirement set forth in Section 1.150-2 of the Treasury Regulations and
evidences its intentions under Section 1201.042(c) of the Texas Government Code. This section
of this resolution shall be liberally construed to evidence the intent of the City to comply with
state law and federal income tax law in the issuance of tax-exempt Certificates for the Project.
Section 4: The Mayor and the City Clerk are hereby authorized and directed to do
any and all things proper and necessary to carry out the intent hereof.
Section 5: This resolution shall take effect immediately from and after its passage by
the City Council of the City of Baytown.
INTRODUCED, READ AND PASSED by the affinnative vote of the City Council of the
City of Baytown, this the 41h day of March, 2021
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ON C PETILLO, yor
ATTEST:
LETICIA BRYSCH, City Clerk
APPROVED AS TO FORM
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REN L. HORNER, City Attorney
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EXHIBIT A
NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION
NOTICE is hereby given that it is the intention of the City Council of the City of Baytown,
Texas (the "City"), to issue interest -bearing Certificates of Obligation of the City to be designated and
known as the "CITY OF BAYTOWN, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2021"
(the "Certificates") for the purpose of providing for the payment of contractual obligations to be incurred
in connection with the planning, acquisition, construction, equipping, expansion, repair, and/or
renovation of City -owned public property, including (1) a convention center consisting of public
conference rooms and meeting space of approximately 33,600 square feet, including a ballroom of
approximately 12,000 square feet, (2) public facilities and infrastructure ancillary to the conference
rooms and meeting space, (3) a proportionate interest in elements common to the convention center and
the hotel that will be interconnected with the convention center (the "related hotel"), such as the
foundation, IIVAC system, mechanical, electrical, and plumbing systems, roof, and other similar
structural elements, (4) areas common to the convention center and related hotel, (5) the completion of a
water and wastewater preliminary engineering report for the design of a water line extension and
replacement of an existing wastewater lift station and force main, (6) provision of utility service to
Bayland Island, and (7) a parking lot or parking structure with approximately 320 spaces adjacent to the
convention center. The City Council tentatively proposes to authorize the issuance of the Certificates at
its regular meeting place in the City Council Chambers, City Hall, 2401 Market Street, Baytown, Texas,
at a regular meeting of the City Council to be commenced at 6:30 p.m., on April 22, 2021, in a principal
amount not to exceed $20,500,000, with a maximum maturity date of February 1, 2045, at an interest
rate or rates that may not exceed the maximum legal interest rate. The current principal outstanding of
all City ad valorem tax -supported debt obligations ("Tax Debt") is $203,965,000; the current combined
principal and interest required to pay all Tax Debt of the City on time and in full is $256,828,456. The
estimated combined principal and interest required to pay the Certificates on time and in full is
$31,001,692; the estimated interest on the Certificates of $10,501,692 is provided for illustrative
purposes only, and is based on an assumed interest rate of 3.50%. Market conditions affecting interest
rates vary based on a number of factors beyond the control of the City, and the City cannot and does not
guarantee a particular interest rate associated with the Certificates.
The City Council presently proposes to provide for payment of the Certificates by the pledge of
an annual ad valorem tax levied upon all taxable property within the City, within the limits prescribed by
law, and by (i) a limited subordinate pledge of $1,000 of the City's net sewer and water revenues,
together with (ii) a portion of the City's hotel occupancy tax revenue imposed under Chapter 351, Texas
Tax Code, and received by the City for the use of rooms in the related hotel. The Certificates are to be
issued, and this notice is given, pursuant to Section 271.041, et seq., Texas Local Government Code.
BRANDON CAPETILLO, Mayor
City of Baytown, Texas
4839-7305-3355v.16 63325-1