Minutes TC 01/29/2007 - WorkshopMINUTES OF WORKSHOP SESSION TOWN COUNCIL MEETING FOR'THE
TOWN OF TROPHY CLLlB
LOCATION: 100 MUNICIPAL DRIVE, TROPHY CLUB, TEXAS
Monday, January 29,2007
5:00 P.M.
STATE OF TEXAS 5
COUNN OF DENTON 5
The Town Council of the Town of Trophy Club, Texas, met in a Workshop Session on Monday, January
29, 2007. The meeting was held within the boundaries of the Town and was open to the public.
TOWN COLlNClL MEMBERS PRESENT:
Nick Sanders
Roger Williams
Pam Cates
Susan Edstrom
Philip Sterling
Gregory Lamont
STAFF AND GUEST(S) PRESENT:
Brandon Emmons
Lisa Ramsey
Patricia Adams
Sakura Moten-Dedrick
Jim Buxton
Lila Marsh
Dan Almon
Jim Sabonis
Kirk Wilson
Trip Davenport
Nathan McChellun
Carmella Kindrey
Keenan Rice
Robert McCloes
Jim Wingert
Mayor
Mayor Pro Tem
Council Member
Council Member
Council Member
Council Member
Town Manager
Town Secretary
Town Attorney
Finance Director
Financial Analyst
Bond Counsel, Vinson & Elkins
Southwest Securities
First Southwest Company
Centurion Development
Bank of America
Bank of America
MuniCap
MuniCap
Hughes and Lews
Carter and Burgess
A.l Mayor Sanders called the Workshop Session to order at 5:05 p.m. noting a quorum was present.
TOWN COUNCIL CONVENED INTO WORKSHOP SESSION
WORKSHOP SESSION
B.l Council Workshop to discuss issues related to the creation of the Trophy Club Public
lmprovement District #1, including but not limited to the PID agreement, debt issuance,
assessments and suggested timeline.
Kirk Wilson from Centurion introduced the representatives from Bank of America, MuniCap, Hughes and
Luce , Carter- Burgess and Southwest Securities.
Mr. Wilson gave a presentation explaining the Utilization of Development Districts, gave examples of
Public lmprovement Districts (PID) and reasons to choose a PID. Mr. Wilson outlined the process for a
PID creations, explained how they are governed and how they are funded. Wilson concluded his
presentation with Centurion's Proposal.
Dan Almon from Southwest Securities explained the primary responsibility of the financial advisory
services group is to advise and represent the Town's interest in those matters related to the issuance of
PID bonds. These services require the review of all documents related to bond underwriting and the
selling process. Mr. Almon listed the items Southwest Securities would analyze and summarized the
considerations for financing community development infrastructure costs with public improvements bonds.
Mayor Pro Tem Williams confirmed the one-time assessment could be rolled into the mortgage.
Mayor Sanders called upon Lila Marsh from Vinson & Elkins to describe her function as Bond Counsel.
Ms. Marsh explained her role is limited; she is responsible to pass onto Council the legalities of the issues
as it is their authority to pass policy and set the transaction amount. Ms. Marsh said PID agreements are
complicated and fairly new in Texas, she will serve as a facilitator to ensure that the transaction keeps
moving forward. Bond Council functions also include the preparation of the bond documents, review and
evaluation of the assessment and submittal of the document transaction to the Attorney General.
Mayor Sanders expressed concern about the Town's bond rating. MuniCap President, Keenan Rice does
not feel this would be an issue. Rice said there are three things to consider; the potential implication on
the bond rating as a moral obligation, the assessment plan would cover the assessment role and the
administration. MuniCap will work with Denton County Tax Collector to add a tax line for the assessment.
MuniCap will provide an annual report to Denton County Tax Collector as they will collect the
assessments each year.
Council member Lamont questioned if the bond rating be affected by the population growth.
Council member Cates asked how potential home buyers would be notified of the PID. Keenan Rice
explained the disclosure check list. Rice also suggested the developer include an addendum in the
contract as well as prepare a separate brochure that would include this information. Ms. Marsh added the
disclosure begins when the potential home buyers first visit the sales office.
Mayor Pro Tem Williams stated clarified that the home buyers would still pay Town taxes and the PID
assessments are in lieu of MUD taxes.
Council member Lamont asked about Council's legal standards. Ms. Marsh explained the levy of the
assessment is a governmental function. The report from MuniCap along with the erlgineer's report will
show what is necessary to service the project and will provide for the due diligence.
Trip Davenport and Nathan McChellun of Bank of America explained the assessment for special districts
are very common outside the state of Texas and is probably the norm not the exception and is a very
vibrant industry. Bank of America places a premium on their reputation and has rejected several
transactions however in their analysis this one is a very strong credit. Davenport and McChellum
promised if chosen as the underwriter for this transaction to work very hard and closely with both Bond
Counsel and the Town's Financial Advisory.
Council member Sterling asked what the typical capp rate for investment for this type of bond. Davenport
answered 100 basis points over mmd and clarified this would be a non-rated uninsured bond.
Mayor Sanders expressed concern for the Town's liability should something go wrong. Sanders clarified
there is no legal risk to the Town and that Bank of America will take all the necessary precautions and
due diligence as the underwriters of this transaction.
Davenport agrees that there is no moral obligation so long as the Town does not subject themselves to in
inappropriate activity.
For the record, Mayor Sanders notified Bank of America that the Town does not intend to pay anything
other than what they have to pay.
Mr. Wilson concluded the presentation by thanking everyone for all of their hard work and hours invested
in this project. Wilson would like to execute a reimbursement agreement with the Town's expenses move
expediently to the PID agreement.
Mayor Sanders questioned the change to the Northwest ISD and County shares under thoroughfare
improvements. Jim Wingert responded this is an estimated cost share and is still in negotiations.
Sanders mentioned that part of this road looks to be in the Town boundary of Marshall Creek and
Roanoke and that a water-well is currently being discussed with the developer as it relates to #4 of the
Project list.
Mayor Pro Tem Williams commented the list has to be finalized prior to approval of the PID agreement
and is another meeting or workshop necessary. Mayor Sanders added the February 19 meeting date
might be too aggressive. Town Manager Emmons responded the engagement agreements would be
ready to discuss at the February 5th meeting and then move forward on the reimbursement agreement.
C.l Adjourn.
Motion made by Edstrom seconded by Williams to adjourn.
Workshop adjourned at 7:04 p.m.
Lisa ~amsey, Town secret& Nick Sanders, Mayor
Town of ~robh~ Club, ~exai - Town of Trophy ~iub, Texas