From
Tannie Camarata, Cash and Debt Manager
Title
General Obligation Line of Credit Renewal
Presenter
Diana Ortiz, Chief Financial Officer
Recommend Action
Approve
Analysis
The City has a $5 million General Obligation (GO) line of credit with Bank of America. The line of credit expired on September 30, 2010 and needs to be renewed for another 3 year term. The line provides interim construction financing for capital projects for which voters approved long term bonds. Borrowings under the lines are eventually repaid with the proceeds of long term bond issues.
Currently the city has no debt outstanding under the GO line of Credit.
The city's bond counsel Fulbright & Jaworski prepared the ordinance.
Financial Consideration
The terms of the line of credit include payment of interest expense on draws and a 0.50% facility fee on undrawn balances. In fiscal 2010, the only expense has been $19,945 for the fees on the undrawn balances.
Body
AN ORDINANCE authorizing the City of Grand Prairie, Texas, to enter into a Sixth Amendment to General Obligation Loan Agreement; providing for the payment of said agreement by the levy of an ad valorem tax upon all taxable property within the City; and resolving matters incident and relating to the execution and delivery of said agreement and providing an effective date.
WHEREAS, the provisions of Chapter 1371, Texas Government Code, as amended (the “Act”), authorize public entities such as the City of Grand Prairie, Texas (the “City”) to enter into, among other things, credit agreements to finance project costs of an eligible project, as defined in the Act;
WHEREAS, in order to enable the City to finance project costs of an eligible project or eligible projects, the City and Bank of America, N.A. (the “Bank”) entered into a certain General Obligation Loan Agreement (the “Loan Agreement”) dated as of March 31, 1996, as amended by that certain First Amendment to General Obligation Loan Agreement (the “First Amendme...
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