Agenda Item 7284

October 2, 2000

SUBJECT: Resolution for Issuance of $31,445,000 ACC Combined Fee Revenue Building and Refunding Bonds, Series 2000

PROPOSED ACTION:

That the Board of Trustees consider and approve a Resolution authorizing the issuance of approximately $31,445,000 Austin Community College District Combined Fee Revenue Building and Refunding Bonds, Series 2000; entering into an escrow agreement, a purchase contract, and a paying agent/registrar agreement; authorizing the investment of the bond proceeds, approving an Official Statement; and authorizing and approving other matters related thereto.

RELATED BOARD POLICY OR RESOLUTION:

Policies E-1, Master Planning, and E-2, Facilities Planning, call for Board consideration of strategic plans for the College

RATIONALE:

The Master Plan recommends that the college refinance debt tied to the building fee (with no increase) to permit up to $20.9 million in bonds to finance priority construction projects. The Master Plan recommends that the College purchase a Service Center/Warehouse facility financed by a bond sale. The cost of this facility would be funded through lease savings and revenue offsets, as not to place additional financial requirements on the district. Two options are available. Option 1 is comprised of two separate transactions: the bond refunding transaction coupled with the delivery of some $20.9 million in additional proceeds available for new construction would be completed immediately. This transaction would be followed in the near future by the issuance of approximately $ 5.0 million for the Service Center/Warehouse facility. Option 2 is to combine the separate transactions into one larger transaction as a means of reducing cost of issuance, taking advantage of market timing and reducing repetition of staff time. This transaction would utilize: $ 20.9 million for new construction, $4.8 million for the Service Center/ Warehouse and some $ 3.9 for the refunding. In addition the district would contribute an additional $ 1.0 million to fund the increased Debt Service Reserve requirement. The balance of the issue would be used to pay the Municipal Bond Insurance premium, Underwriters Discount and pay cost of issuance. Staff recommends that the sale of bonds be combined into one issue to reduce the cost of issuance as proposed under Option 2.

BUDGETARY CONSIDERATION:

Cost of Refinancing included in the Bond Package.

RESOURCE PERSONNEL:

Jerry Miller, Vice President

Jorge Rodriguez, Vice President Coastal Securities

ATTACHMENTS:

Financing Time Frame, including required Board Action

Resolution Authorizing The Issuance of Series 2000 Bonds

Respectfully Submitted By:

Jerry Miller, Vice President

Richard Fonte, President