Item 4PM E M O R A N D U M
March 26, 2019
To: Shana Yelverton, City Manager
From: Sharen Jackson, Chief Financial Officer
Subject: Resolution 19-012, Authorizing the execution and delivery of a
continuing disclosure agreement (“CDA”)
Action
Requested: Approval of Resolution 19-012 to enter into a continuing
disclosure agreement with Trinity River Authority of Texas
(“TRA”)
Background
Information: The City has entered into various contractual agreements to
unconditionally finance the principal and interest or a fixed
percentage of principal and interest of TRA’s Revenue Bonds.
Under the agreements, TRA utilized the bond proceeds to
administer and construct the various sewer/wastewater
treatment projects on the City’s behalf. Such agreements
provide the City title to the assets upon retirement of the
debt/capacity rights in the use of constructed assets.
The Securities and Exchange Commission (“SEC”) Rule
15c2-12 of the Securities Exchange Act requires that
municipal security issuers provide certain information to the
Municipal Securities Rulemaking Board (“MSRB”) about the
municipal securities on an ongoing basis. To meet this
requirement, TRA has had CDAs as a part of each bond
resolution, as well as with each customer (participating cities).
Both TRA and participating cities have responsibilities related
to this SEC rule. As an obligated city on TRA bonds, the
participating cities is the main credit source for repayment of
the obligations on TRA bonds.
Because of the revisions to the Rule 15c2-12 over the years
but specifically the 2018 revisions, TRA is in the process of
updating CDA’s with each participating city. The updated
agreement clarifies the information to be provided by each city
to MSRB. The rule and therefore the agreement include three
items required to be provided to the MSRB by the city:
1.Certain annual financial and operating information and
audited financial statements
2.Timely notice of the occurrence of certain events (i.e.
material financial obligations, events of debt default,
etc.)
Item 4P
Honorable Mayor and City Council
Page 2 of 2
3. Timely notice of the failure of an issuer or participating
entity to provide required annual financial information
on or before the date specified in the CDA.
Historically, TRA staff would obtain the disclosure information
from the participating cities and file the continuing disclosure
information to MRSB for TRA’s revenue bonds. With the
approval of Resolution 19-012 (new CDA), participating cities
will now file the required continuing disclosure information to
MRSB for TRA’s revenue bonds. The city will file the
continuing disclosure information under TRA CUSIP debt
numbers.
Financial
Considerations: The approval of Resolution 19-012 will not have a financial
impact to the city. The approval is a process change for
reporting continuing disclosure information.
Strategic Link: This agenda item is linked to the Southlake Strategy Map
through the following objectives:
• B2 Collaborate with select partners to implement
service solutions
• F1 Adhere to financial management principles and
budget
Citizen Input/
Board Review: None required
Legal Review: Consultant with bond counsel and financial advisor
Alternatives: N/A
Supporting
Documents: Resolution 19-012
Staff
Recommendation: Staff recommends approval of Resolution 19-012
RESOLUTION 19-012, AUTHORIZING THE EXECUTION AND DELIVERY OF A
CONTINUING DISCLOSURE AGREEMENT
THE STATE OF TEXAS
SOUTHLAKE OF TEXAS
WHEREAS, the City of Southlake, Texas (the "City") and the Trinity River Authority of
Texas (the "Issuer") have heretofore entered into, and may in the future enter into, contracts
relating to the provision of facilities and/or services by the Issuer for the benefit of the City; and
WHEREAS, in connection with the financing of the facilities and/or services provided by
the Issuer for the benefit of the City, the Issuer has, and/or will, from time to time authorize, issue
and deliver bonds (the "Bonds") of the Issuer supported by payments to be made by the City
pursuant to such contracts; and
WHEREAS, the United States Securities and Exchange Commission has adopted Rule
15c2-12, as amended from time to time (the "Rule"); and
WHEREAS, the Rule provides that a broker, dealer or municipal securities dealer of Bonds
issued after the effective dates set forth in the Rule, may not purchase or sell Bonds in connection
with an offering thereof unless, prior to the purchase or sale thereof, "obligated persons", or entities
acting on behalf of "obligated persons", have undertaken to provide certain updated financial
information and operating data annually, and timely notice of specified material events, to certain
information vendors; and
WHEREAS, the Issuer and the City heretofore entered into a Continuing Disclosure
Agreement, as amended, in conformance with the Rule (the "Original CDA"); and
WHEREAS, in order to reflect the Rule, as recently amended, and provide adequate
flexibility to accommodate any subsequent amendments to the Rule, it is deemed appropriate and
necessary to enter into a new Continuing Disclosure Agreement (the "CDA"), which supercedes
the Original CDA; and
WHEREAS, it is the intent of both the Issuer and the City that any and all obligations
and/or duties of the respective party under the Original CDA with respect to any heretofore issued
series of Bonds shall continue to be observed as carried forward into the CDA; and
WHEREAS, in order to comply with the Rule and facilitate the future issuance of Bonds,
the City and the Issuer have agreed that it is deemed appropriate and necessary to enter into the
CDA hereinafter authorized to be executed and delivered.
THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SOUTHLAKE, TEXAS:
Section 1. That the recitals set forth in the preamble hereof are incorporated herein and
shall have the same force and effect as if set forth in this Section.
Section 2. That the Mayor of the City is hereby authorized and directed to execute and
deliver, and the City Secretary of the City is authorized and directed to attest, the CDA
substantially in the form and substance attached hereto.
Section 3. That the Mayor of the City is hereby authorized and directed to execute and
deliver, and the City Secretary of the City is authorized and directed to attest, any amendment or
supplement to the CDA hereinafter required or appropriate in response to further amendment of
the Rule in order to maintain compliance with the requirements of the Rule.
Section 4. That the CDA, and any amendment or supplement thereof, shall become
effective and enforceable in accordance with its terms immediately upon execution and delivery
thereof for all intents and purposes.
Section 5. That each of the officers and members of the City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place and purpose of the
meeting at which this Resolution was introduced, and that said Resolution would be introduced
and considered for passage at said meeting, and each of said officers and members consented, in
advance, to the holding of said meeting for such purpose, and that said meeting was open to the
public and public notice of the time, place and purpose of said meeting was given, all as required
by the Texas Government Code, Chapter 551.
PASSED AND APPROVED this day of , 2019.
Mayor
ATTEST:
City Secretary