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Home My WebLink AboutPR 11736: PORT OF PA BONDSinteroffice MEMORANDUM To: From: Subject: Date: Mayor, City Council, City Manager ~ - Mark T. Sokolow City Attorney /~ P. R. No. 11736; Council Meeting of April 16, 2002 April 10, 2002 Attached is P. R. No. 11736 authorizing the Mayor and/or the City Manager to attend and conduct a public hearing at the offices of the Port of Port Arthur on April 26th, 2002 at 9:00 a.m. regarding the issuance and approval of Port of Port Arthur Navigation District of Jefferson County, Texas Multi-Mode Variable Rate Demand Revenue Bonds (BASF Corporation Project) Series 2002A in the aggregate principal amount of $15,000,000, Port of Port Arthur Navigation District of Jefferson County, Texas Multi-Mode Variable Rate Demand Revenue Bonds (ATOFINA Petrochemicals, Inc. Project) Series 2002B in the aggregate principal amount of $10,000,000 (the ~ATOFINA New Bonds")and Port of Port Arthur Navigation District of Jefferson County, Texas Multi- Mode variable Rate Demand Refunding Revenue Bonds (ATOFINA Petrochemicals, Inc. Project)Series 2002C (the "ATOFINA Refunding Bonds"} per 26 USCS Section 147. Mr. Scot Sheldon, the Port's Attorney, will be available to discuss this matter with you. cc: Scot Sheldon Greg salinas VIA FACSIMILE: (409) 835-3838 VIA FACSIMILE= (512) 472-0871 MTS/jb Attachment z .pr11736 .memo MCCALL. PARKHUI~$T & MORTON L.L.P. MEMORANDUM To: Mark Sokolow City Attorney, City of Port Arthur, Texas Ce: Scot Sheldon Sheldon. Jordan & Duntmm L.L.P. From: Gregory B. Salinas McCall, Parklmrst & Hoixon L.L.P. Date: April 5, 2002 Re: $15,000,000 Por~ of Port Arthur Navigation District of Jefferson County, Texas Multi-Mode Variable Rate Demand Revenue Bonds (BASF Corporation Project), Series 2002A (the "BASF Bonds") and $10,000,000 Port of Pozx Arthur Navigation District of Jefferson County. Texas Multi-Mo de Variable Rate Demand Revenue Bonds (ATOFINA Petrochemicals, [nc. l~'ojec0, Series 2002B (the "ATOFINA New Bonds") and Not to exceed $10,000,000 Port of Port Arthur Navigation Dis~ct of Jefferson Count3,, Texas Mul~Mode Variable Rate Demand Refunding Revexme Bonds (ATOFINA Petrochemicals, Inc. Project), Series 2002C (thc "ATOFINA Refunding Bonds") The following memorandum describes the federal tax law provisions requiring the City of Port ~rthur, Texas (the "City") to hold public hearings with respect to the above captioned bonds as well as obtainhxg the approval of such bonds by the Mayor of the City, The memorandum also discusses fl}e necessary steps to hold such hearings. 'Hie federal tax law requirements and the process, however, are identical to the actions reqaired of the Cily in April and May of 2000 }'elating to the issuance of bonds by the Port of Port Arthur Navigation District of Jefferson County, Texas (the "District") tbr the benefit of BASF Corporation ("BASF") and Fina Oil and Chemical Company, now ATOFINA Petrochemicals, Inc. ("ATOFINA"). The District has approved and authorized the BASF Bonds. the ATOFINA New Bonds and the ATOFINA Refunding Bonds pursuant to action taken by the District on April 3, 2002. The BASF Bonds and the ATOFINA New Bonds will be issued to finance the costs of major improvements to the olefins facility,jointly owned by BASF and ATOFINA, behig cortstnmted on State Iffigliway 73, adjacent to thc boundary of the District, but willfin tile cx~ra-te~ritorialj urisdiction of the City of Port Arthur, Texas (thc "City"). The ATOF1NA Refunding Bonds will be issued, in an amount not m exceed $10,000,000 (cun'ently anticipated to be $4_5 million), to refund a portion o fthe Port ofPo~ Arflmr Navigation District Industrial Der elopment Corporation Adj ustab lc Tender Pollution Control Revenue Bonds (American Petrofina Cotnpany of Texas Project), Seri~ 1985 originally issued in the aggregate pfincip-,d amount of $14,500,000/o finance cesta.in air pollution control facilities and sewageAvater pollution control facilities (including solid waste disposal facilities related to such facihties) (the "Facihti~s") at ATOFINA's chemical plant site complex (located at Farm-to-Market Road 366 and 32nd Sn-eet) m Prat .aoahut, Ie×as. On April 17, 2002 and pr/or to the issuance and deliver of any of such bonds, thc District will hold a public heatings regarding such bonds and the proj~ts to be financed and refinanced with such bonds. The public hearings are a requirement of the federal Tax Equity and Fiscal Responsibility Act of 1984, now -codified as Section 147(fl of the Internal Revenue Code of 1986, as amended ("Section 147(f)"). Section 147(0 requires that a public hearing be held within the jurisdiction of the issuer of private activity bonds, in this case rite District, and, if such facilities lie outside the boundaries of the issuer, within thej urisdiction (including extra-t *nritorialjurisdic lion) ora political subdivision where the facilities to be fuumced or refaumced with such bonds are located. Notice of the public hearing is required to be published in a new~aper of general circulation no! less than fourteen days prior to the hearing. In addition, Section 147(0 requires that the highest govemnaental official of the jurisdiction where the hearings are held, after considering the comments of such hearings, approve the bonds. The approval is only for proposes of Section 147(f) and does not create any liabilit~ on the part of such official or the related political subdivision. Therefore, the District, on behalf of BASF and ATOFINA, is requesting that the City authorize the holding of the appropriate public hearings and anthorize the Mayor of the City to approve such bonds after due consideration of any testimony at such public beahngs. As stated above, Section 147(0 requires that the hearing ~o beheld not less than 14 days after published notice of such hearing. For other federal tax reasons, the BASF Bonds are scheduled to close on May 6-7, 2002 and ATOFINA New Bonds and the ATOFINA Refunding Bonds are scheduled to close on May 8-9, 2002. Beca,~qe of the shot! time frame in which to get the required notices published, it would be preferable that a O. me and date for the public hearings be determined prior to thc City Council meeting of the City on April 16, 2002. However, if such a rime and dale must be detemfined at that meeting, the publication deadlines for the Port .4rthur N'ews would permit hearing on May 2 or May 3, 2002. Again, it would be preferable to have the hearings earlier allowing for the required 14 days published notice of such hearinlls. The location oftha public hearhlgs is currently blank in the forms of notices (although the address to the District's offices are hi'acke~exl). The hearing held in May of 2000 by the City was held at the District's offices and the hearings this year could also be held there, bm the hearings can be held anywbere within the City. 2 As for the City Council meeting on April 16, 2002, the tuffy action of the City Council would be the authorization for the holding of the public hearings, designation of a hearing officer, presumably the Mayor, if available, (and an alternate hearing officer m case the hearing officer is unavailable for some reason) and authorizing the Mayor's approval of the subject bonds for purposes of Section 147(0. '['lie following is suggested agenda language: "Approval of holding certain public hearings relating to certain private activity revenue bonds to be issued by the Port of Port Arthur Navigation District for the benefit of BASF Corporation and ATOFINA Petrochemicals, Inc., appointing hearing officers therefor and authorizing the Mayor to approve such bonds certain federal tax purposes only." Scot Sheldon of Sheldon, Jordan & DmZ, am L_L.P., the Dis~ct~s general counsel, is available at the April 16th City Council mceling to answer any questions. Also attached are the folms of the approval certificates of the Mayor with respect to the BASF Bonds, thc ATOFINA New Bonds and the ATOFIlqA Refunding Bonds which, after the required City public hearings, the Mayor shall be asked to exccute. If you have any questions or comments, please do not hesitate to call me or Scot Sheldon. 3 P. R. No. 11736 04/09/02 jb RESOLUTION NO. A RESOLUTION AUTHORIZING THE MAYOR AND/OR THE CITY MANAGER TO ATTEND AND CONDUCT A PUBLIC HEARING AT THE OFFICES OF THE PORT OF PORT ARTHUR (221 HOUSTON AVENUE, PORT ARTHUR) ON APRIL 26, 2002 AT 9:00 A.M. REGARDING THE ISSUANCE AND APPROVAL OF PORT OF PORT ARTHUR NAVIGATION DISTRICT OF JEFFERSON COUNTY, TEXAS MULTi-MODE VARIABLE RATE DEMAND REVENUE BONDS (BASF CORPORATION PROJECT) SERIES 2002A IN THE AGGREGATE PRINCIPAL AMOUNT OF $15,000,000 ("BASF BONDS"), PORT OF PORT ARTHUR NAVIGATION DISTRICT OF JEFFERSON COUNTY, TEXAS MULTI- MODE VARIABLE RATE DEMAND REVENUE BONDS (ATOFINA PETROCHEMICALS, INC. PROJECT) SERIES 2002B IN THE AGGREGATE PRINCIPAL AMOUNT OF $10,000,000 (THE "ATOFINA NEW BONDS") AND PORT OF PORT ARTHUR NAVIGATION DISTRICT OF JEFFERSON COUNTY, TEXAS MULTI- MODE VARIABLE RATE DEMAND REFUNDING REVENUE BONDS (ATOFINA PETROCHEMICALS, INC. PROJECT) SERIES 2002C (THE "ATOFINA REFUNDING BONDS") PER 26 USCS SECTION 147. WHEREAS, the City Council of the City of Port Arthur finds it to be in the best interests of the citizens of the City of Port Arthur to authorize the Mayor and/or the City Manager to attend and conduct a public hearing at 9:00 a.m., April 26, 2002, regarding the issuance and approval of Port of Port Arthur Navigation District Multi-Mode Variable Rate Demand Revenue Bonds (BASF Corporation Project) Series 2002A in the aggregate principal amount of $15,000,000 ("BASF Bonds"), Port of Port Arthur Navigation District Multi-Mode Variable Rate Demand Revenue Bonds (ATOFINA Petrochemicals, z pr11736 Project) Series 2002B in the aggregate principal amount Inc. of $10,000,000 (the ~ATOFINA New Bonds"), and Port of Port Arthur Navigation District of Jefferson County, Texas Multi- Mode Variable Rate Demand Revenue Bonds (ATOFINA Petrochemicals, Inc. Project) Series 2002C (the "ATOFINA Refunding Bonds") per 26 USCS Section 147, as more fully discussed in the memorandum attached as Exhibit NOW THEREFORE, BE OF PORT ARTHUR= Section 1. are true and correct. IT RESOLVED BY THE CITY COUNCIL OF THE CITY That the facts and opinions in the preamble Section 2. That the City Council herein authorizes the Mayor and/or the City Manager to attend and conduct a public hearing at 9:00 a.m., April 26 , 2002, at the offices of the Port of Port Arthur (221 Houston Avenue, Port Arthur) regarding the issuance and approval of Port of Port Arthur Navigation District of Jefferson County, Texas Multi-Mode Variable Rate Demand Revenue Bonds (BASF Corporation Project) Series 2002A in the aggregate principal amount of $15,000,000 (~BASF Bonds"), Port of Jefferson County, Texas Revenue Bonds (ATOFINA Petrochemicals, Inc. 2002B in the aggregate principal amount of "ATOFINA New Bonds") and Port District of Jefferson County, Port Arthur Navigation District of Multi-Mode Variable Rate Demand Project) Series $10,000,000 (the of Port Arthur Navigation Texas Multi-Mode Variable Rate z pti 1736 Demand Refunding Revenue Bonds Project) Series 2002C USCS Section 147. Section 3. bonds, shall not the sole parties Petrochemicals, Section 4. Resolution Council. (ATOFINA Petrochemicals, Inc. (the ~ATOFINA Refunding Bonds") per 26 That the City, by its approval of these be liable for the payment thereof and that liable therefore shall be BASF and/or ATOFINA Inc. That a copy of the caption of this shall be spread upon the Minutes of the City READ, ADOPTED AND APPROVED on this __ day of , A.D., 2002, at a Regular Meeting of the City Council of the City of vote: AYES: Mayor: Port Arthur, Texas, by the following City Council: , NOES: ATTEST: Oscar Ortiz, Mayor Jan Stroder, Acting City Secretary APPROVED AS TO FORM: Mark T. Sokolow, City Attorney APPROVED FOR ADMINISTP~ATION: Steve Fitzgibbons, City Manager