Attached is a Resolution prepared by the City's bond counsel, Norton Rose Fulbright US LLP, that approves the resolution of the Allen Economic Development Corporation (AEDC) authorizing the issuance of its Sales Tax Revenue Bonds, Taxable Series 2021. The AEDC's resolution requires certain parameters set forth in Section 3 of the resolution to be met at the time the bonds are priced.

The bond issue is expected to be in the approximate amount of $7,500,000. The bonds are to provide funds to finance the costs of designing, constructing, acquiring, and improving infrastructure within the City, including streets and roads, storm sewer, sanitary sewer and water utilities, detention and irrigation improvements, site improvements, and related improvements to promote or develop new or expanded business enterprises (collectively, the "Projects") and to pay costs of issuance. These improvements are part of the incentive agreement for The Farm and The Avenue projects. The term of the taxable bonds should not exceed September 2041 (20 years) and the true interest cost on the bonds will not exceed 4%.   

The maximum sales tax revenue bonds that can be outstanding is restricted by a requirement that the pledged revenues (sales taxes) are not less than 1.50 times the average annual debt service of the total bonds outstanding. This bond issue will result in a 5.48 times debt service coverage, which is above the restricted requirement.

The attached resolution sets the form, details of, and authorizes the issuance and delivery of the bonds. The bonds are obligations of the AEDC and are payable from the sales tax revenues of AEDC. The negotiated sale will be finalized with the authorized Pricing Officer approving the transaction after it has been structured. The Pricing Officers listed in the resolution are the President of the Board of Directors of the Corporation or the City Manager of the City, as an ex-officio member of the Board of Directors, or the Executive Director of the Corporation. The plan is to price the bonds in the second week of June. If the timetable does not change, the plan is to have the bond closing on June 30.

The impact on the AEDC budget over the term of this debt on an annual basis would be approximately $600,000 which is consistent with the projected amount approved in the AEDC revised budget.  Property taxes of the City are not pledged for the repayment of the sales tax bonds.

Staff recommends that the City Council adopt a resolution approving the resolution of the Allen Economic Development Corporation providing for the issuance of its sales tax revenue bonds, Taxable Series 2021, and resolving other matters incident and related to the issuance of the bonds.

I make a motion to adopt Resolution No. ________________ approving the resolution of the Allen Economic Development Corporation providing for the issuance of its Sales Tax Revenue Bonds, Taxable Series 2021, and resolving other matters incident and related to the issuance of the bonds.