Item 6DCITY OF
SOUTH LAKE
MEMORANDUM
May 10, 2011
To: Shana Yelverton, City Manager
From: Sharen Jackson, Director of Finance
Subject: Resolution No. 11 -024, Approving the issuance of an issuer
note by the Italy Higher Education Facilities Corporation for
the Clariden School
Action
Requested:
Approval of Resolution No. 11 -024
Background
Information:
On September 17, 2002, City Council approved Resolution
No. 02 -060 approving the issuance of education revenue
bonds by the Italy Higher Education Facilities Corporation for
Clariden School. Clariden School borrowed $6,300,000 in
tax exempt bonds through Italy Higher Education Facilities
Corporation. The funds were used to finance the school
campus at 100 Clariden Ranch Road here in Southlake.
Clariden School would like to refinance the outstanding
portion of the 2002 bonds (approx. $2,200,000). In addition,
the school wants to borrow approximately an additional
$156,000 (i) to refinance a 2008 conventional loan used to
install a security system, and (ii) to buy new technology
equipment including a phone system and computers.
Clariden School is a 501(c)(3) nonprofit corporation and
under the provisions of both state and federal income tax
requirements, 501(c)(3) corporations can borrow through the
use of tax exempt bonds. The City of Southlake's approval
is required under Section 147 (f) of the Internal Revenue
Code. The section requires that the bond issue be approved
both by the "issuing" jurisdiction (i.e. Italy, Texas) and by the
"host" jurisdiction where the School project is located (i.e.
Southlake). The City of Italy approved the transaction on
April 11, 2011. The procedure for this approval requires two
steps: 1) a public hearing; and 2) approval by the City by
Resolution. The bonds are paid back solely by payments
made by the Clariden School and do not constitute any
obligation of the City of Southlake. Southlake's sole
involvement with the project is to give the approval required
by the tax code. Additionally, the school gives the city an
indemnity in regard to this financing and the bank
acknowledges in the debt instruments that the City of
Southlake (as well as the City of Italy) have no liability to
repay the bank. Approval of Resolution No. 11 -024 would
approve the issuance of issuer notes by Italy Higher
Honorable Mayor and City Council
Page 2 of 2
Education Facilities Corporation for Clariden School in an
amount not to exceed $2,500,000.
Financial
Considerations: The obligation to repay the note is solely that of Clariden School.
Strategic Link: C5 Promote opportunities for partnerships and volunteer
involvement.
Citizen Input/
Board Review: Public hearing scheduled for May 17, 2011.
Legal Review: The law firm Fulbright and Jaworski serves as the City's bond
counsel, and as such has reviewed the Resolution.
Alternatives: Deny.
Supporting
Documents: Resolution No. 11 -024
Staff
Recommendation: Approval of Resolution No. 11-024
CERTIFICATE FOR RESOLUTION
THE STATE OF TEXAS
COUNTY OF TARRANT
CITY OF SOUTHLAKE, TEXAS
I, the undersigned City Secretary of the CITY OF SOUTHLAKE, TEXAS (the
"City "), hereby certify as follows:
1. The City Council (the "City Council ") of the City convened in REGULAR
MEETING ON THE DAY OF , 2011, at its regular meeting
place in the Italy City Hall (the "Meeting "), and the roll was called of the duly constituted
officers and members of the City Council to wit. All members of the City Council were
present, except the following: , thus constituting a
quorum, whereupon among other business, the following was transacted at the
Meeting, a written:
RESOLUTION APPROVING THE ISSUANCE OF AN ISSUER
NOTE BY THE ITALY HIGHER EDUCATION FACILITIES
CORPORATION FOR THE CLARIDEN SCHOOL
(the "Resolution ") was duly introduced for the consideration of the City Council. It was
then duly moved and seconded that the Resolution be adopted; and, after due
discussion, such motion, carrying with it the adoption of the Resolution prevailed and
carried by the following votes:
AYES: NOES: ABSTENTIONS:
2. A true, full, and correct copy of the Resolution adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this
Certificate; the Resolution has been recorded in the City Council's minutes of the
Meeting pertaining to the adoption of the Resolution; the persons named in the above
and foregoing paragraph are duly chosen, qualified, and acting officers and members of
the City Council's and duly and sufficiently notified officially and personally, in advance,
of the time, place, and purpose of the Meeting, and that the Resolution would be
introduced and considered for adoption at the Meeting and each such officers and
members consented, in advance, to the holding of the Meeting for such purpose; and
the Meeting was open to the public, and public notice was given, all as required by
Chapter 551, Texas Government Code.
{01476020.DOCx \} -1- RESOLUTION OF CITY OF SOUTHLAKE
SIGNED AND SEALED THIS DAY OF , 2011.
City Secretary, City of Southlake, Texas
{01476020.DOCx \} -2- RESOLUTION OF CITY OF SOUTHLAKE
RESOLUTION NO. 2011 -
RESOLUTION APPROVING THE ISSUANCE OF AN ISSUER
NOTE BY THE ITALY HIGHER EDUCATION FACILITIES
CORPORATION FOR THE CLARIDEN SCHOOL
WHEREAS, the City of Italy, Texas, pursuant to the provisions of Chapter 53,
Texas Education Code, as amended (now including Chapters 53 and 53A of the Texas
Education Code, with Chapter 53A being the "Act "), approved and created the Italy
Higher Education Facilities Corporation (the "Corporation ") as a nonprofit corporation to
exercise the powers enumerated and provided in the Act for and on behalf of the City;
and
WHEREAS, the Corporation may issue revenue bonds or other obligations to
provide funds for any of its purposes including financing or refinancing costs to acquire,
construct, enlarge, extend, repair, renovate, or otherwise improve "educational facilities"
or "housing facilities" for certain educational institutions permitted under the Act,
including The Clariden School, a Texas nonprofit corporation created under the laws of
the State of Texas (the "School "), and regardless if such facilities are located within or
without the city limits of the City of Italy; and
WHEREAS, the City has been informed by the School that the School is
requesting the Corporation to issue a new tax exempt Note (the "Issuer Note ") for the
benefit of the School; and
WHEREAS, the Issuer Note shall be issued by the Italy Higher Education
Facilities Corporation in an amount not to exceed $2,500,000. The proceeds of the
Note will be loaned to the School (i) to refinance the outstanding balance due on the
Italy Higher Education Facilities Corporation Education Revenue Bonds (Clariden
School Project) Series 2002; (ii) to refinance the outstanding balance due on a Note
dated May 15, 2008, from the School to Citizens National Bank of Texas, (iii) to acquire
certain new technology equipment for the School, and (iv) to pay costs of issuance of
the new Note. All of these items relate to the financing or refinancing of the School
campus, consisting of buildings for administration, a lower school, an upper school, a
fine arts building and a gymnasium /auditorium, and providing a security system and
technology equipment for the School (the "Project "), all to be located at the School
campus at 100 Clariden Ranch Road, Southlake, Texas; and
WHEREAS, the Issuer Note will be payable solely from revenues derived by the
Corporation from the School pursuant to provisions of a Loan Agreement between the
Corporation and the School and other applicable documents being entered into by the
Corporation in connection with the issuance of the Issuer Note, and the City of
Southlake, Texas, will have no responsibility in any manner for the payment of the debt
service requirements of the Issuer Note; and
WHEREAS, Section 147(f) of the Internal Revenue Code of 1986, as amended,
requires the City Council of the City of Southlake (as the "applicable elected
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representative" of the "Government unit" where the Project is located) to approve the
issuance of the Issuer Note; and
WHEREAS, on , 2011, a public hearing was held by this
City Council, with respect to the Issuer Note and the related Project, and notice of such
public hearing was published in a newspaper of general circulation in Southlake at least
14 days prior to such public hearing; and
WHEREAS, the documents authorizing issuance of the Issuer Note shall contain
wording stating that the Issuer Note imposes no liability on the City of Southlake, its
officials, officers, or employees; and
WHEREAS, it is hereby deemed necessary and advisable that this resolution be
adopted.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SOUTHLAKE, TEXAS:
1. That all of the recitals and preambles hereinabove stated are found to be
true and correct and are incorporated herein and made a part of this resolution.
2. That in order to satisfy the requirements of Section 147(f) of the Internal
Revenue Code of 1986, as amended, the City of Southlake hereby approves the
issuance of the Issuer Note described above in an aggregate principal amount not to
exceed $2,500,000 in order to obtain funds for the School to finance or refinance the
Project. Proceeds of the Issuer Note may also be used for paying certain expenses in
connection with the issuance of the Issuer Note, all pursuant to the requirements of the
Act and other applicable laws.
3. That this resolution shall become effective immediately upon its adoption.
4. That this approval in no event shall make the City of Southlake liable in
any manner whatsoever with regard to the Issuer Note or with regard to the Project to
be financed with the proceeds of the Issuer Note.
5. That it is hereby officially found and determined that the meeting at which
this resolution is passed is open to the public as required by law, and that public notice
of the time, place and purpose of said meeting was given as required by law.
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PASSED AND APPROVED this day of ' 2011.
ATTEST:
City Secretary
City of Southlake, Texas
Mayor
City of Southlake, Texas
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