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HomeMy WebLinkAbout1980-02-19 - Special City Council�6 SPECIAL SESSION - TUESDAY FEBRUARY 19, 1980 - 3:00 P.M. CHAMBER OF THE CITY COUNCIL CITY HALL, STEPHENVILLE, TEXAS The City Council of the City of Stephenville, Texas, met in Special Session Tuesday, February 19, 1980 at 3:00 p.m. with Mayor Donald R..Jones present and presiding. COUNCILMEMBERS PRESENT: Mike Leese Calvin A. McGee Raymond Anderson COUNCILMEMBERS ABSENT: W. M. Irwin Linda Chew E. W. Ferguson Larry Hammett Charles Riggins OTHERS; ATTENDING THE MEETING WERE: City „Admini,strator Marshall Shelton - Administrative Assist.Kurt Ackermann - Di.redtor bf Public Works R. Y. Gann - City Secretary Joyce Pemberton - Mr. Scott Allen - Mr. Larry McGee - Members of the press. Mayor Jones called the meeting to order. ITEM I: APPROVAL OF INDUCEMENT LETTER OF INDUSTRIAL BONDS FOR EMERSON ELECTRIC CORPORATION Mayor Jones explained that the purpose of this meeting was to consider approval of the Inducement Letter of Industrial Bonds for Emerson Electric Corporation in conjunction with the Industrial Revenue Bond financing corporation that was approved at the last meeting. Mayor Jones asked Mr. Scott Allen to present the opening remarks. Mr. Scott Allen came before the Council and explained about the corporation's organizational meeting and the filing of necessary papers in Austin and advised that, at this time, the corporation is organized, the Board of Directors elected, the officers elected and are now re- questing the Council's approval to issue bonds pursuant to this development corporation of 1979. Mr. Allen advised that the Board of Directors of the Industrial Revenue Bond Financing Corporation had talked with a bond counselor and an investment brokerage firm to represent the corporation in the placing and writing of the bonds. The Directors have selected Mr. Elbert Morrow of Dumas, Huguenin, Boothman and Morrow of Dallas to be the bond counsel to represent the corporation in the placing of the bonds and Mr. Jack Gray, senior vice president of Snyder, Burnett & Hickman, Inc., an invest- ment brokerage firm. The Board of Directors passed an Inducem randum of Agreement which was approved in the corporation is requesting the City Council to did in the organizational meeting authorizing Mr. Allen said the Board has received letters Morrow stating that they are representing the Development Corporation. -nt Resolution and a Memo - previous meeting. Now the approve what the corporation issuance of these bonds. from both Mr. Gray and Mr. Stephenville Industrial Mr. Jack Gray came before the Council and explained his company's position and background. He advised that as the corporation's financial advisors and investment bankers, they would be on call at all times to meet with the corporation and Council when needed. Anytime the financing should come before the Council, they would be present, along with Board members, to present their case. Mr. Gray also advised the Council that he had visited with the Emerson Electric Company recently and gave the Council some notes on their financial condition. RESOLUTION approving an agreement by the Stephenville Industrial Development Corporation to issue bonds pursuant to the Development Corpor- ation Act of 1979. WHEREAS, the Stephenville Industrial Development Corporation (the "Corporation "), heretofore created with the approval of this governing body, adopted a_resolution on February 12, 1980, authorizing _ (i) the execution of an agreement with•Vernco Division of Emerson Electric Company and(ii) the issuance of industrial development revenue bonds by the Corporation to finance the cost of certain facilities for the use of Vernco Division of Emerson Electric Company, in its trade or business; and WHEREAS, Section 25(f) of the Development Corporation Act of 1979 (the "Act ") provides that this City Council must approve by written resolution any agreement to issue bonds adopted by the Corporation; and WHEREAS, the aforementioned resolution and agreement by the Corporation set out the amount and purpose of the proposed industrial development revenue bonds; now, therefore,` BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLE, TEXAS: That the resolution and agreement of the Corporation (attached hereto and incorporated herein for all purposes), to issue industrial development revenue bonds is hereby approved. That industrial development revenue bonds (in the amount not to exceed $10,000,000) shall be issued (under the conditions set forth in said resolution and agreement) by the Corporation to provide certain facilities (as generally described in the agreement) for use by Vernco Division of Emerson Electric Company. PASSED AND APPROVED, This the��y of 1980. v 11L..r T: MLy6r, City of Ste IT ty ecretary, City o Step enville TEXAS (City Seal) 1' 7 Mr. Gray also advised that, in his duties as financial advisor, the only time he would be working with Emerson Electric Corporation directly on the financing would be at the time they are negoiating interest rates with the investor that will purchase the bonds. All other times he would be working for the Development Corporation and the sponsoring unit which is the City of Stephenville. Mr. Elbert Morrow came before the Council to discuss the steps the Council will be asked to approve in the future. He said there would be two times when the Council would be asked to review a particular appli- cation before it is financed by the non -- profit corporation. (1) a preliminary approval (such as the one today for Emerson Electric Co.) which is the agreement between the two parties in which they try to work out all problems. At such times as the completed financing documents have been prepared and approved by both parties then they are submitted to the Texas Industrial Commission who will review the financial feasibility of the project. When the financing documents are completed the Council will be asked to approve the form and content of the documents that relate to the financing. Must be done within 60 days of the date that the bonds are ,. actually sold by'ahe corporation,,., Mr. Morrow*advised that the review, an opportunity to see ho several different ways it can be sale at the end of a lease term. option to buy, but it is subject Corporation. Council would have the opportunity to w it is actually structured. There are done. He said he thinks this will be a A lease for a period of years with an to change as it is discussed with the Mr. Morrow said that the Development Corporation is charged with the responsibilities of looking at these things first, trying to weed out those that need to be weeded out and bring to the Council only those projects that would finance and would accomplish the purposes for which the corporation was created.. Mr. Morrow, in answer to Mayor Jones' question, explained that the "preliminary agreement" did not lock the city into an agreement that they have approved the issuance of the bonds. The preliminary agreement is just an agreement for the parties to go ahead to work out any problems there might be, but does not approve the issuance of the bonds. Mr. Morrow explained that the Board of Directors of the Industrial Development Corporation will make a finding of the company's financial stability and present it to the City Council at which time the City Council will be asked to endorse that finding.- There will be information on the company made available to the City Council previous to that. Mayor Jones asked if the City Council itself will have the power to reject the issuance of the bonds even though the Industrial Board has approved and said that the company has met all the requirements, etc. Mr. Morrow said "yes" the City Council may reject the issuance of the bonds. Mayor Jones asked if the City Council could reject a bond issuance on the basis of something other than the financial stability of the company? Mr. Morrow replied that they could on the basis of not liking the provisions of the lease agreement or the trust in nature. Mayor Jones explained that this Resolution is a preliminary measure to enable_Vernco Division of Emerson Electric Company to begin the building. Now they build or invest at their own risk and with their own interim financing at this point. The bonds are issued then they can clear their interim financing with permanent financing. If they don't, they will have to do their own permanent financing. Subsequent to this when the papers are drawn for the bond issuance and the financial statments of the com- pany are submitted, then the City Council will have the opportunity to reject or approve the issuance of the bonds. Councilman Anderson moved, seconded by Councilman Leese, to approve the Resolution approving the preliminary agreement between the Stephen- ville Industrial Development Corporation and the Vernco Division of Emerson Electric Company in regard to the issuance of bonds. Motion carried unanimously by those members present. : ITEM II: PETITION SUBMITTED FOR ANNEXATION OF TANGLEWOOD ESTATES City Administrator Shelton., in behalf of Mr. Seth Moore, submitted the petition and metes and bounds of the Tanglewood Estates Addition to the City Council to be considered for annexation of said addition. Mayor Jones explained that Mr. Moore's application was for annexation of a 31.89 acre tract of land known as the Tanglewood Estates and that Mr. Moore is the only property owner. This application must be on file for 20 days from the date it is submitted to the Council.and will be con- sidered on the regular meeting date of March 4th. There being no other business to come before the Council, the meeting adjourned at 5:00 p.m. ATTEST: 2 ztz� ty ecretary