The Woodlands Township is expected to go to market in March with a $34.6 million bond to fund new fire stations, build and renovate parks and refinance debt.
To get the best interest rates available, the township is racing to the market with its first bond issue backed by property taxes.
The township will offer unlimited tax bonds, those backed by a commitment to use whatever rate or duration is needed to pay back the obligation, instead of general obligation bond, which are backed by property taxes.
“Everything looks really, really good,” said Drew Masterson, managing director of FirstSouthwest, the township’s financial advisor.
The township approved a preliminary official statement for the bonds on Wednesday and authorized Don Norrell, the president and general manger of the township, to make any necessary adjustments so that the bond can be ready for sale at the March meeting.
Voters approved up to about $50 million in bonds for capital projects and refinancing in November.
The 2010 issue for $34.6 million in bonds will include $19.9 million to refinance existing debt at lower interest rates, $8.2 million to build two new fire stations in Creekside Park and Indian Springs, $6.2 million for park and pathway improvements and $200,000 in issuance costs.
The statement also is needed to get bond ratings from two agencies, Moody’s and Standard and Poor’s, which provides a risk assessment of the township’s bond capability in the market.
To boost The Woodlands bonding position, J.R. Moore Jr., the county tax assessor/collector, reported that the community has achieved a collection rate of 97 percent to date.
Moore said he is confident that the township will collect 98. 1 percent of its taxes this year. The current tax rate is 32.8 cents per $100 of assessed value, which would generate about $37.3 million in revenue based on collections of 98.1 percent, Moore said.
“Most new jurisdictions usually get a 94 to 95 percent collection,” Moore told the township board at Wednesday’s meeting. “You’ve done remarkably well. Compared to other cities, like Shenandoah and Oak Ridge North, you far exceed their collections.”
The township board also hired its bond council to prepare legal documents for the sale. After a short debate, the board voted eight to one to hire the low bidder Bracewell & Guiliani as its bond counsel for the 2010 bond at $7,500. Board member Alex Sutton opposed the contract, saying the bid seemed “a little out of whack.”
Four firms submitted proposal for the contract, ranging in price from $7,500 to $48,000.
“I think all the firms understand the job,” said Don Norrell, president and general manager of the township. “They are using the price submitted to complete the job at the quoted price.”
In other legal matters, the township hired the Strong Firm to represent the township on convenant, parks and general matters, and Winstead to serve as counsel for employment matters. The Strong Firm rates vary from $110 to $228 an hour, while Winstead will charge a flat rate of $350 an hour.
Board Member Peggy Hausman asked if it was time to consider an in-house attorney, since the township paid about $750,000 in 2009 for legal fees.
“Is this the most cost effective and best way to move forward with legal services?” asked Haumsan.
Norrell said that 2009 was a very unusual year because of unique legal issues, the transition from the Community Associations of The Woodlands to the Township and labor negotiations. Sutton said because of the diversity of needs within the township, he would not support a general council.
The Legal Team
The Woodlands Township hired three law firms at its meeting Wednesday. Following are the firms, their area of expertise and their costs:
The Strong Firm, covenants, parks and general purpose, $110 to $228 an hour
Winstead, employment law, $350 an hour
Bracewell & Guiliani, bond counsel, $7,500 for 2010 bond issuance
Source: The Woodlands Township