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HomeMy WebLinkAboutPR 11658: $15 MIL ESCROWTo: From: Date: Subject: Memorandum City of Port Arthur, Texas Finance Department Steve Fitzgibbon.s,, Ci~M~n~ jR;nbueaCCr~ ~gn, d;;0h;ll, Di/~f Fiddnce Proposed Resolution 11658 As a condition of the loan from the Texas Water Development Board funding the $15,000,000 in Certificates of Obligation being issued today, the City must place the proceeds of the issue in the hands of an escrow agent. The agent will invest the funds, as directed by the City. The funds will be released to the City after the expenditures have been approved by the Board. I am recommending Chase Manhatten Bank as the escrow agent, with the funds to be invested in Tex Pool. The City has been satisfied with the performance of Tex Pool during the past eight years that we have worked with them. P. R. NO. 11658 JJA 1/29/02 RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN ESCROW AGREEMENT WITH THE CHASE MANHATTAN BANK FOR THE PROCEEDS OF THE SALE OF CERTIFICATES TO BE INVESTED IN TEXPOOL. WHEREAS, on February 5, 2002, the City Council will sell $15,000,000 in Certificates of Obligation to the Texas Water Developmem Board (the Board); and WHEREAS, as a condition of the sale, the Board requires that the proceeds of the sale, less issuance costs, be deposited into an escrow account which is subject to withdraw only with the approval of the Board; and WHEREAS, the City of Port Arthur has a longstanding relationship with Tex Pool, is satisfied with their investment performance, and desires that Tex Pool invest these bond proceeds; now therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: Section 1. The facts and opinions in the preamble are true and correct. Section 2. The City Manager is hereby authorized to execute on behalf of the City of Port Arthur an escrow agreement with Chase Manhatten Bank to serve as escrow agent for funds received from the Texas Water Development Board. Section 3. A copy of said contract is attached hereto and made a part here of as Exhibit A. Section 4. A copy of the caption of this resolution shall be spread upon the Minutes of the City Council. HEAD, ADOPTED, AND APPROVED, this 5th day of February, 2002, AD, at a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote: AYES: Mayor: Councilmembers: NOES: ATTEST: Mayor Jan Stroder, Assistant City Secretary APPROVED AS TO FORM: Mark Sokolow, City Attorney APPROVED FOR ADMiNISTRATION: Steve Fitzgibbons, City Manager Rebecca Underhill, Finance Director EXHIBIT "A" ESCROW AGREEMENT FOR TEXAS WATER DEVELOPMENT BOARD TRANSACTIONS This Escrow Agreement (the Agreement ) is entered into as of February 5 .2002 by and between the City of Port Arthur . Texas (the Issuer), a political subdivision of State of Texas, and The Chase Manhattan Bank, a New York State Bank (the Escrow Agent ). WITNESSETH: VOtEREAS, the Issuer has authorized and sold Certificates of Obligation Bonds, Series ~ 200Z in the aggregate principal amount of $ 1 2002A , dated (the Bonds ); and WltEREAS, the Bonds were sold to Texas Water Development Board (the Board ), which required as a condition of the sale that proceeds of the sale, less amounts to pay costs of issuance, (the Funds ) be deposited in escrow subject to withdrawal only with the approval of the Development Fund Manager of the Board or an authorized representative; provided, however, the Funds can be transferred in accordance with this Agreement; and WltEREAS, the Texas Treasury Safekeeping Trust Company (the Trust Company ) has created the Texas Local Government Investment Pool ( TexPool ), a public funds investment pool, and the Interlocal Cooperation Act, Ch. 791, Tex Govt Code Ann. (Vernon 1994) and the Public Funds Investment Act, Ch. 2256, Tex Govt Code Ann. (Vernon 1995), authorized the Issuer to delegate to TexPool the authority to hold legal title as custodian and to make investments with the escrowed funds; NOW, TItEREFORE, in consideration of the premises and the covenants herein contained, the Issuer and the Escrow Agent agree as follows: Section 1: The Funds shall be deposited with and held in escrow in TexPool to the credit of an account entitled Certificates of Obligation 2002A Escrow Account (the Escrow Account ) until released or transferred as provided in this Agreement. The escrow period shall begin on the date money is first deposited to the credit of the Escrow Account and shall terminate when all money so deposited, together with all interest earnings has been released or transferred in accordance with this Agreement. Section 2: TexPool shall invest the Funds in accordance with the Participation Agreement between the Issuer and the Trust Company. All interest earned will be deposited in the Escrow Account and shall become part of the Funds. Section 3: The Issuer reserves the fight to secure release from the Escrow Agent of all or a portion of the Funds upon presentation to the Escrow Agent of an executed escrow agreement with another financial institution. Upon receipt of such an agreement and with the written authorization from the Board, the Escrow Agent shall transfer the released Funds held in the Escrow Account to such new escrow agent. Section 4: Upon written authorization from the Board authorizing release of all or a portion of the Funds in the Escrow Account, the Escrow Agent will authorize TexPool to release the Funds into the SEWER REItABTLTTATION Fund, or use as directed by the Issuer. Section 5: If only a portion of the Funds in the Escrow Account are released pursuant to Section 4, or transferred pursuant to Section 3, the Escrow Agent shall continue to maintain the Escrow Account in accordance with the terms hereof until all Funds in the Escrow Account have been released or transferred, after which the Escrow Agent shall have no further duties pursuant to this Agreement. Section 6: The Escrow Agent may rely on, and shall not be liable for acting or refrain'mg from acting in accordance with any written notice, instruction, request or other document furnished to it and believe by it to have been signed or presented by the proper party or parties. The Escrow Agent may consult with counsel regarding its duties or responsibilities under this Agreement and shall not be liable for action taken or not taken in good faith in reliance upon such counsel. The Escrow Agent shall not be liable for any exemplary, consequential, or incidental damages by reason of performance of its duties under this Agreement. This Agreement shall be governed by the laws of the State of Texas. Section 7: To the extent permitted by law, the Issuer will indemnify and defend the Escrow Agent from, and will hold it harmless from, any and all losses, costs, damages, claims and expenses, including attorney s fees, incurred or suffered by the Escrow Agent in connection with, or arising out of, this Escrow Agreement, except for a such acts or omissions resulting from the negligence or willful m/sconduct of the Escrow Agent. IN WITNESS WHEREOF, the parties have executed this Escrow Agreement in two originals, each of which shall be deemed to be an original, as of the date and year fu:st written above. Notice Address: [ISSUER] [Issuer] By: Name: STEVE FITZGIBBONS Notice Address: 700 Lavaca, 5t~ Floor Austin, Texas 78701 Attn: Mike Ulrich Fax: (512) 479-2553 Phone: (512) 479-2562 Title: CITY MANAGER~ CTTY OF PORT ARTHUR THE CHASE MANHATTAN BANK, as Escrow Agent By: Name: Title: