HomeMy WebLinkAbout215-10 RESOLUTIONRESOLUTION NO. 215-10
A RESOLUTION TO RATIFY THE RESOLUTION OF THE FAYETTEVILLE
PUBLIC FACILITIES BOARD APPROVING REFUNDING REVENUE
BONDS (BUTTERFIELD TRAIL VILLAGE PROJECT), SERIES 2010 IN A
PRINCIPAL AMOUNT OF NOT TO EXCEED NINETEEN MILLION
DOLLARS ($19,000,000.00)
WHEREAS, the Fayetteville Public Facilities Board, is a public body politic and
corporate with the power of perpetual succession created by Ordinance No. 2485, as amended
and codified as §33.065 through §33.071 of the Code of Fayetteville; and
WHEREAS, the Public Facilities Board is authorized by A.C.A. 14-137-101 et seq. and
the Fayetteville Code to issue and sell its revenue bonds and to use the proceeds thereof for the
purpose of financing housing and health care facilities in the City, to secure payment of such
revenue bonds as therein provided (including bond insurance or letters of credit) and to issue
refunding bonds; and
WHEREAS, the Public Facilities Board has determined that the economic interest and
public purpose of the Public Facilities Board are served by issuing Fixed Rate Refunding
Revenue Bonds, Series 2010 (the "Bonds" for the Butterfield Trail Village Project) in an
aggregate principal amount of not to exceed Nineteen Million Dollars ($19,000,000.00) for the
purpose of providing moneys to refund prior bonds, pay the costs of issuing the Bonds and for
other purposes related thereto; and
WHEREAS, pursuant to A.C.A. §14-137-120(a) the Public Facilities Bonds are not a
debt of or pledge of the credit of the City of Fayetteville and the City of Fayetteville is not
obligated to pay the Bonds; and
WHEREAS, A.C.A. § 14-137-104 provides that none of the powers granted to the Public
Facilities Board shall be subject to the supervision or regulations or require the approval or
consent of the State or of any municipality, except as provided in Ordinance No. 2485 as
amended; and
WHEREAS, pursuant to the provisions of the Fayetteville Code, a Resolution adopted
by the Public Facilities Board which authorizes the approval of bonds for financing or
refinancing for residential housing, health care and related facilities for the elderly which are
owned by non-profit corporations must be ratified by the City Council before the bonds may be
issued; and
WHEREAS, the Public Facilities Board adopted a resolution on November 23, 2010 to
approve the Bonds subject to the ratification by the City and subsequent approval by the Public
Facilities Board of final financing terms; and
Page 2
Resolution No. 215-10
WHEREAS, such resolution adopted by the Public Facilities Board on November 23,
2010, authorized the Chairman and Secretary of the Public Facilities Board to execute documents
to effect the issuance of the Bonds; and;
WHEREAS, the City Council may ratify the Public Facilities Board's Resolution for the
issuance of the bonds and provided further that the City Council has determined to ratify the
Resolution adopted by the Public Facilities Board on November 23, 2010.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS
Section 1: Recognition of Public Facilities Board's Authority. That the City
Council of the City of Fayetteville, Arkansas hereby finds that the Public Facilities Board is
authorized by A.C.A. §14-137-101 et seq. and the Fayetteville Code to approve the issuance of
its not to exceed Nineteen Million Dollars ($19,000,000.00) Fixed Rate Refunding Revenue
Bonds, Series 2010 (Butterfield Trial Village Project) for the purpose of providing moneys to
refund prior bonds, pay the costs of issuing the bonds and for other purposes related thereto. The
Bonds by statute and intent of this City Council are not a debt of or pledge of the credit of the
City of Fayetteville, and the City is not obligated to pay any debt service or principal on the
bonds whether or not said bonds have been properly issued.
Section 2: Ratification of Public Facilities Board's Resolution. That the City
Council of the City of Fayetteville, Arkansas hereby ratifies the Public Facilities Board's
Resolution approved November 23, 2010, a copy of which is filed with the Fayetteville City
Clerk.
Section 3: Severability. That the City Council of the City of Fayetteville, Arkansas
hereby determines that if any provision of this Resolution shall be held or deemed to be or shall,
in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or
provisions herein contained or render the same invalid, inoperative or unenforceable to any
extent whatever.
PASSED and APPROVED this 7th day of December, 2010.
APPROVED:
ATTEST:
\,®aa®a s
oma ate;
SONDRA E. SMITH, City lerk/Trea u kr ETTEVILLE° o®.N.
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AGENDA REQUEST
FOR: COUNCIL MEETING OF DECEMBER 7, 2010
FROM:
KIT WILLIAMS, CITY ATTORNEY
ORDINANCE OR RESOLUTION TITLE AND SUBJECT:
A Resolution To Ratify The Resolution Of The Fayetteville Public Facilities Board Approving
Refunding Revenue Bonds (Butterfield Trail Village Project), Series 2010 In A Principal
Amount Of Not To Exceed Nineteen Million Dollars ($19,000,000.00)
APPROVED FOR AGENDA:
City Attorney Date
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Finance Director Date
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Chief of Staff
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Departmental Correspondence
ARKANSAS
www.accessfayetteville.org
LEGAL
DEPARTMENT
TO: Mayor Jordan
City Council
CC: Don Marr, Chief of Staff
Paul Becker, Finance Director
FROM: Kit Williams, City Attorney
DATE: November 18, 2010
RE: Ratifying a refinancing bond issue for Butterfield Trail Village
Kit Williams
City Attorney
Jason B. Kelley
Assistant City Attorney
The Fayetteville Public Facilities Board was established pursuant to state
law (A.C.A. §14-137-101 et seq.) by the Fayetteville Board of Directors by
Ordinance No. 2485 on November 21, 1978, primarily as a way to finance low
income housing. On March 10, 1984, Ordinance No. 2991 was enacted by the City
Board amending Ordinance No. 2485 to specifically authorize the issuance of
bonds for the construction of Butterfield Trail Village.
The Butterfield Trail bonds were refinanced by another issue of bonds in
2002 as approved by the Fayetteville City Council by Resolution No. 10-02 on
February 5, 2002. Now the Fayetteville Public Facilities Board is requesting
another refinancing issue to lock in current low interest rates, to obtain a longer
term letter of credit and to gain increased flexibility in the bonds' financing
covenants that could allow for the issuance of additional debt for future capital
projects. Please see the letter from Dennis Hunt, Senior Vice President of
Stephens, who is acting as the Board's financial advisor.
A.C.A. §14-137-107(a)(2)(B) allows the City to "place specific limitations
on the exercise of the powers granted, including limitations on the board's area of
operations, the use of public facilities projects of the board, and the board's
authority to issue bonds." This was done by the original and amending
ordinances. Therefore, the Fayetteville Public Facilities Board must comply with
those terms to obtain the City Council's approval (by ratification of the
Fayetteville Public Facilities Board's Resolution authorizing the bonds) before any
bonds may be issued.
State law makes it crystal clear that Public Facility Bonds are not the
financial responsibility of the City of Fayetteville and do not constitute an
indebtedness of Fayetteville.
"§14-137-120. Bonds; obligations, Liability, etc.
"(a) It shall be plainly stated on the face of each bond that it
has been issued under the provisions of this chapter, that the
bonds are obligations only of the public facilities board, and
that in no event shall they constitute an indebtedness for which
the faith and credit of the creating municipality or county or any
of its revenues are pledged."
The Fayetteville City Council has discretion whether or not to agree to the
issuance of this Public Facility Refunding Bonds even though these bonds do not
"constitute an indebtedness" of the City. The Fayetteville Code states: "The
issuance of such revenue bonds shall be accomplished by resolution duly adopted
by the City Public Facilities Board and ratified by the City Council."
§33.068(2)(B). The Ordinance establishing the Fayetteville Public Facilities Board
states: "Prior to issuance of any such bonds, the facilities board must submit to the
City Board of Directors (now Council) for its approval the following
information:" 33,068(A) of the Fayetteville Code. (emphasis added)
It is clear that the Fayetteville City Council has the right to approve the
terms of any proposed bond issuance which bonds may not be issued unless the
City Council ratifies the Fayetteville Public Facilities Board's Resolution to issue
such bonds. I believe Mr. Dennis Hunt will appear at your meeting to explain the
advisability of agreeing to the proposed refinancing bonds.
RESOLUTION NO.
A RESOLUTION TO RATIFY THE RESOLUTION OF THE FAYETTEVILLE
PUBLIC FACILITIES BOARD APPROVING REFUNDING REVENUE
BONDS (BUTTERFIELD TRAIL VILLAGE PROJECT), SERIES 2010 IN A
PRINCIPAL AMOUNT OF NOT TO EXCEED NINETEEN MILLION
DOLLARS ($19,000,000.00)
WHEREAS, the Fayetteville Public Facilities Board, is a public body politic and
corporate with the power of perpetual succession created by Ordinance No. 2485, as amended
and codified as §33.065 through §33.071 of the Code of Fayetteville; and
WHEREAS, the Public Facilities Board is authorized by A.C.A. 14-137-101 et seq. and
the Fayetteville Code to issue and sell its revenue bonds and to use the proceeds thereof for the
purpose of financing housing and health care facilities in the City, to secure payment of such
revenue bonds as therein provided (including bond insurance or letters of credit) and to issue
refunding bonds; and
WHEREAS, the Public Facilities Board has determined that the economic interest and
public purpose of the Public Facilities Board are served by issuing Fixed Rate Refunding
Revenue Bonds, Series 2010 (the "Bonds" for the Butterfield Trail Village Project) in an
aggregate principal amount of not to exceed Nineteen Million Dollars ($19,000,000.00) for the
purpose of providing moneys to refund prior bonds, pay the costs of issuing the Bonds and for
other purposes related thereto; and
WHEREAS, pursuant to A.C.A. §14-137-120(a) the Public Facilities Bonds are not a
debt of or pledge of the credit of the City of Fayetteville and the City of Fayetteville is not
obligated to pay the Bonds; and
WHEREAS, A.C.A. §14-137-104 provides that none of the powers granted to the Public
Facilities Board shall be subject to the supervision or regulations or require the approval or
consent of the State or of any municipality, except as provided in Ordinance No. 2485 as
amended; and
WHEREAS, pursuant to the provisions of the Fayetteville Code, a Resolution adopted
by the Public Facilities Board which authorizes the approval of bonds for financing or
refinancing for residential housing, health care and related facilities for the elderly which are
owned by non-profit corporations must be ratified by the City Council before the bonds may be
issued; and
WHEREAS, the Public Facilities Board adopted a resolution on November 23, 2010 to
approve the Bonds subject to the ratification by the City and subsequent approval by the Public
Facilities Board of final financing terms; and
WHEREAS, such resolution adopted by the Public Facilities Board on November 23,
2010, authorized the Chairman and Secretary of the Public Facilities Board to execute documents
to effect the issuance of the Bonds; and;
WHEREAS, the City Council may ratify the Public Facilities Board's Resolution for the
issuance of the bonds and provided further that the City Council has determined to ratify the
Resolution adopted by the Public Facilities Board on November 23, 2010.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS
Section 1: Recognition of Public Facilities Board's Authority. That the City Council of
the City of Fayetteville, Arkansas hereby finds that the Public Facilities Board is authorized by
A.C.A. §14-137-101 et seq. and the Fayetteville Code to approve the issuance of its not to
exceed Nineteen Million Dollars ($19,000,000.00) Fixed Rate Refunding Revenue Bonds, Series
2010 (Butterfield Trial Village Project) for the purpose of providing moneys to refund prior
bonds, pay the costs of issuing the bonds and for other purposes related thereto. The Bonds by
statute and intent of this City Council are not a debt of or pledge of the credit of the City of
Fayetteville, and the City is not obligated to pay any debt service or principal on the bonds
whether or not said bonds have been properly issued.
Section 2: Ratification of Public Facilities Board's Resolution. That the City
Council of the City of Fayetteville, Arkansas hereby ratifies the Public Facilities Board's
Resolution approved November 23, 2010, a copy of which is filed with the Fayetteville City
Clerk.
Section 3: Severability. That the City Council of the City of Fayetteville, Arkansas
hereby determines that if any provision of this Resolution shall be held or deemed to be or shall,
in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or
provisions herein contained or render the same invalid, inoperative or unenforceable to any
extent whatever.
PASSED and APPROVED this 7th day of December, 2010.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
FAYETTEVILLE CODE OF ORDINANCES
TITLE III ADMINISTRATION
development of housing, health care, and related
facilities for elderly persons, regardless of
income, serves a substantial public purpose and
there is a significant need in the city for such
facilities.
(Code 1965, §2-111; Ord. No. 2485, 11-21-78; Ord. No.
2991, 3-20-84; Ord. No. 4021, §1, 2-18-97; Code 1991,
§33.065)
State law reference(s)--Public Facilities Board Act,
A.C.A. §14-137-101 et seq.
33.066 Establishment
Pursuant to A.C.A. §14-137-107 there is created and
established the city Public Facilities Board
(hereinafter known as "facilities board") with authority
as hereinafter provided to accomplish, finance,
contract or purchase mortgage loans concerning, and
otherwise act in such manner as may be permitted by
the act to provide decent, safe, and sanitary
residential housing facilities within or near the city,
including the city's projected growth areas and the
city's extraterritorial planning areas.
Additional authority has been granted the facilities
board by Ordinance No. 2708 and Ordinance No.
2991 and the facilities board's authority may vary as
allowed by statute and as provided by further
amending ordinances which may be passed by the
city in the future.
(Code 1965, §2-112; Ord. No. 2485, 11-21-78; Ord. No.
4021, §2, 2-18-97; Code 1991, §33.066)
33.067 Members Of The Board; Term Of
Office; Duration Of The Board
The facilities board shall consist of five persons. The
initial members shall, as provided in A.C.A. §14-137-
107, be appointed by the mayor of the city to serve for
terms of one, two, three, four and five years,
respectively. The members of the facilities board
shall be residents of the city and shall take and file
with the City Clerk the oath of office prescribed by the
act.
(Code 1965,§2-113; Ord. No. 2485, 11-21-78; Ord. No.
2991, 3-20-84; Code 1991, §33.067)
State law reference(s)--Creating ordinance -Authority,
A.C.A. §14-137-107; Board members, A.C.A. §14-137-108.
33.068 Powers Of The Board
(A) The facilities board is empowered, from time to
time, to loan, acquire, construct, reconstruct,
extend, equip, improve, sell, lease, and contract
concerning (which shall include the purchase of
mortgage loans and the making of loans to
mortgage lenders) residential housing facilities as
shall be determined by the facilities board to be
necessary to effect the purposes of this article to
provide decent, safe and sanitary residential
housing facilities within or near the city, including
the city's projected growth areas and the city's
extraterritorial planning areas. In addition, the
facilities board shall have each of the powers set
forth in A.C.A. §14-137-111, as amended, and
appropriate to the purposes for which the board
is created unless otherwise restricted herein.
The board may enter into which contractual or
cooperative agreements with such persons as
may in its discretion be advisable to accomplish
the purposes of this article, including, without
limitation, departments, agencies, or
instrumentalities of the United States of America,
the state or the city; for example, the Department
of Housing and Urban Development, the Federal
Housing Administration, the Veterans'
Administration and
Prior to the issuance of
any such bonds, the facilities board must submit
to the City Council for its approval The following
information:
(1) The size of the proposed bond issue and all
related details, including, but without
limitation:
(a) principal amount;
(b) date of the bonds,
(c) interest payment dates;
(d) principal payment dates;
(e) numbers;
(f) denominations;
rates of interest;
(g)
(h) a schedule reflecting the annual
principal maturities;
(i) the semiannual interest requirements
and the total requirements; and
(j) applicable redemption provisions.
FAYETTEVILLE CODE OF ORDINANCES
TITLE III ADMINISTRATION
(2) Recommendations for person to serve as
underwriter, trustee, and custodian for any
such bonds and the mortgage lenders and
servicing institutions with which the facilitie
board shall contract, which the City Counc
reserves the right to select or approve. Th
trustee and the custodian shall be institution
located within the city, if such institutions a
qualified and such appointments do no
otherwise adversely affect the rating of th
bonds (if submitted for rating).
B) The board is expressly authorized to issue
revenue bonds for the purpose of financing
residential housing, health care and related
facilities to serve elderly persons; provided said
facilities are owned by nonprofit corporations or
associations. The issuance of such revenue
bonds shall be accomplished by resolution duly
adopted by the city Public Facilities Board and
ratified by the City Council.
s
it
e
s
re
e
; Ord. No. 2485, - - 8; Ord. No.
2991, 3-10-84; Code 1991, §33.068)
State law reference(s)--Powers generally -bidding and
appraisal procedure, A.C.A. §14-137-111.
33.069 Bond Proceeds; Investments
(A) Any agreements made by the facilities board with
mortgage lenders must contain a provision to the
effect that such mortgage lenders may only loan
the proceeds provided to them to finance housing
located within the city's corporate limits and to
finance housing located within the city's projected
growth area and extraterritorial planning area. A
minimum of 75% of the bond proceeds shall be
available to finance housing located within the
city's corporate limits; and a maximum of 25% of
the bond proceeds shall be available to finance
existing housing located within the city's
projected growth area and extraterritorial
planning area. The facilities board shall have the
authority, after prior approval of the City Council,
to reallocate such percentages.
(B) This section shall apply only to bonds issued for
the purpose of financing owner -occupied
housing.
(C) The facilities board shall offer bond proceeds not
otherwise required to be deposited with the
custodian to financial institutions which have their'
principal place of business located within the city
and which are qualified for such investments.
This section shall apply only to the proceeds of
CD33:13
bonds issued for the purpose of financing owner -
occupied housing.
(Code 1965, §2-115, 2-116; Ord. No. 2485, 11-21-78; Ord.
No. 2991, 3-20-84; Code 1991, §33.069)
State law reference(s)--use of funds and revenue -
bonds, A.C.A. §14-137-115.
33.070 Issuance Of Revenue Bonds
(A) The facilities board is authorized and is limited to
issue this initial series of revenue bonds, in
accordance with the conditions set forth in
§33.068, and to use the proceeds, either alone or
together with other available funds and revenues,
to accomplish the purposes for which the facilities
board is created as the same relates to the
providing of decent, safe, and sanitary residential
housing facilities. Such revenue bonds shall be
obligations only of the facilities board and shall
not constitute an indebtedness for which the faith
and credit of the city or any of its revenues are
pledged, and the principal and interest on the
bonds shall be payable from and secured by a
pledge of revenues derived from residential
housing facilities financed, in whole or in part,
from bond proceeds and as authorized by, and in
accordance with the provisions of law, together
with such other collateral as may properly be
pledged, under the act and as the facilities board
in its discretion may determine.
(B) This section shall apply only to the issuance of
bonds for the purpose of financing owner -
occupied housing. The board is expressly
authorized to issue bonds for the purpose of
financing housing, health care, and related
facilities to serve elderly persons, provided said
facilities are owned by nonprofit corporations or
associations.
(Code 1965, §2-117; Ord. No. 2485, 11-21-78; Ord. No.
2991, 3-20-84; Code 1991, §33.070)
`Note --It should be noted that Ord. No. 4021, adopted
Feb. 18, 1997, provided in the preamble and §3 that §9 of
Ord. No. 2485 provided for the appointment of a bond
counsel for the issuance and sale of residential housing
facility bonds, and said appointment is only for the residential
housing facilities bonds first authorized on Ord. No. 2485
prior to the amendments thereto.
33.071 Organization; Reports
As soon as practicable after the adoption of this
article the facilities board shall meet and elect such
officers as shall be required by law. The facilities
board may adopt such bylaws and other rules and
Dennis R. Hunt
Senior Vice President and Manager
Stephens Inc.
November 8, 2010
Mr. Kit Williams
City Attorney
City of Fayetteville
113 W. Mountain
Fayetteville, AR 72701
Stephens
Jackson T. Stephens, 1923-2005
Chairman Emeritus in Perpetuity
Re: Ratifying Resolution for the Fayetteville Public Facilities Board's Butterfield Trail
Village Fixed Rate Refunding Bonds, Series 2010
Dear Mr. Williams:
Based on my previous discussions with you and Mr. James McCord, Counsel to the
Fayetteville Public Facilities Board, I am attaching a resolution ratifying the action of the
Fayetteville Public Facilities Board to authorize Butterfield Trail Village to issue fixed rate
refunding bonds. Stephens serves as the financial advisor to Butterfield Trail Village in
connection with this financing.
In 2002, the Fayetteville Public Facilities Board and the City of Fayetteville authorized
Butterfield Trail Village to issue up to $25,000,000 in variable rate debt. This financing
mechanism allowed for the issuance of bonds in which interest rates are adjusted every
seven days. Although this variable rate financing mechanism has worked extremely well
for Butterfield Trail Village over the last eight years, the Board is convinced since interest
rates are at historic lows it would be prudent on the part of the Board to convert the
variable rate debt to fixed rate debt. Below are the key reasons the Board of Butterfield
Trail Village is requesting the authorization to issue this fixed rate debt.
Summary of Key Reasons to Convert to Fixed Rate Debt
• Interest Rate Risk. As noted above, interest rates are currently at historic lows and
it is a concern of Butterfield Trail Village that interest rates may increase in the
future. As a result, the Board has decided that it is in its best interest to convert
from a variable rate mode debt to a fixed rate mode debt.
• Letter of Credit Provider Risk. The Board is additionally concerned that there are
fewer letter of credit providers that exist for its variable rate debt. Given the
limited number of providers, the Board is concerned with its ability in the future to
3425 North Futrall Drive
Suite 201
Fayetteville, AR 72703
479-718-7400 t
479-718-7490 f
800-205-8613
dhunt@stephens.com
www.stephens.com
obtain a letter of credit provider at a reasonable rate. More importantly, the
American Recovery and Reinvestment Act allows until December 31, 2010 for the
Federal Home Loan Bank to provide "AAA" letters of credit with participating
financial institutions to secure both variable and fixed rate tax-exempt debt. As a
result, Butterfield Trail Village, in cooperation with Arvest Bank, will be able to
issue its fixed rate debt with a "AAA" letter of credit over a much longer period of
time than its current letter of credit provider allows.
• Covenant Flexibility. The Butterfield Trail Village Board has negotiated with
Arvest Bank a letter of credit with greater flexibility in the financing covenants to
allow for the issuance of additional debt should the Board decide that future capital
projects are necessary.
Based on the above key points, I respectfully request on behalf of Butterfield Trail Village
approval of the attached resolution ratifying the issuance of up to $19,000,000 fixed rate
tax-exempt bonds for Butterfield Trail Village through the Fayetteville Public Facilities
Board. Representatives from Butterfield Trail Village, the Fayetteville Public Facilities
Board and I will be in attendance at the December 7, 2010 City Council meeting to address
any questions that the Mayor and the Council may have regarding this request.
Thank you for your assistance on this matter.
Sincerely,
�.. f)
4
Dennis Hunt
Cc: James McCord
Bill Wickizer
Adele Atha
Paul Becker
Preliminary Overview
FAYETTEVILLE PUBLIC FACILITIES BOARD
FIXED RATE REFUNDING REVENUE BONDS, SERIES 2010
Stephens
Capitalize on Independence''
(BUTTERFIELD TRAIL VILLAGE PROJECT)
November 23, 2010
Preliminary Term Sheet
Financing Participants
• Issuer — Fayetteville Public Facilities Board
• Borrower — Butterfield Trail Village, Inc.
• Issuer's Counsel — McCord Law Firm
• Underwriter — Lancaster Pollard
• Trustee — First Security Trust
• Bond and Disclosure Counsel — Friday, Eldredge & Clark
• Letter of Credit Provider — Arvest Bank and the Federal Home Loan Bank
• Bank's Counsel — Mitchell Law Firm
• Financial Advisor — Stephens Inc.
Financing Components
• Amount of Issue - Not to exceed $19,000,000
• Purpose of Financing — To convert Butterfield Trail Village's current variable rate debt to
a fixed rate debt secured with a 10 -year letter of credit
• Security — Revenues of Butterfield Trail Village as well as a first mortgage security on
the assets of Butterfield Trail Village
• Dated Date — December 21, 2010
• Structure — Serial Bonds December 1, 2011 thru December 1, 2020 (Interest paid on
June 1 and December 1 of each year)
• Redemption Provision — December 1, 2016 and thereafter at par
• Tax Status — Tax-exempt and bank qualified
Stephens
Capitalize on Independences'
City of Fayetteville, Arkansas Public Facilities Board
Fixed Rate Refunding Revenue Bonds, Series 2010
(Butterfield Trail Village Project)
Sources & Uses
Dated 12/21/2010 Delivered 12/21/2010
Sources Of Funds
Par Amount of Bonds
02/01/11 P&I Payment
Additional required Equitycontribution
Total Sources
Uses Of Funds
Deposit to Current Refunding Fund
Costs of Issuance
Rounding Amount
Total Uses
$18,075,000.00
1,079,936.98
225,000.00
$19,379,936.98
19,152,532.99
225,000.00
2,403.99
$19,379,936.98
Stephens
Capitalize on Independence'"
City of Fayetteville, Arkansas Public Facilities Board
Fixed Rate Refunding Revenue Bonds, Series 2010
(Butterfield Trail Village Project)
Pricing Summary
Maturity
12/1/2011
12/1/2012
12/1/2013
12/1/2014
12/1/2015
12/1/2016
12/1/2017
12/1/2018
12/1/2019
12/1/2020
Type of
Bond
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Serial Coupon
Coupon Yield
1.000% 1.000%
1.200% 1.200%
1.450% 1.450%
1.700% 1.700%
1.950% 1.950%
2.300% 2.300%
2.500% 2.500%
2.950% 2.950%
3.200% 3.200%
3.350% 3.350%
Maturity
Value
790,000.00
830,000.00
865,000.00
905,000.00
945,000.00
990,000.00
1,035,000.00
1,080,000.00
1,130,000.00
9,505,000.00
Price
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
100.000%
Dollar Price
790,000.00
830,000.00
865,000.00
905,000.00
945,000.00
990,000.00
1,035,000.00
1,080,000.00
1,130,000.00
9,505,000.00
Total
$18,075,000.00
$18,075,000.00
Bid Information
Par Amount of Bonds
Gross Production
Bid (100.000%)
Total Purchase Price
Bond Year Dollars
Average Life
Average Coupon
$18,075,000.00
$18,075,000.00
18,075,000.00
$18,075,000.00
$139,430.83
7.714 Years
Net Interest Cost (NIC)
True Interest Cost (TIC)
3.0650511%
3.0650511%
3.0487292%
Stephens
Capitalize on Independence'
City of Fayetteville, Arkansas Public Facilities Board
Fixed Rate Refunding Revenue Bonds, Series 2010
(Butterfield Trail Village Project)
Debt Service Schedule
Date Principal Coupon Interest LOC Fee Total P+I
12/1/2011 790,000.00 1.000% 471,558.75 273,133.33 1,534,692.08
12/1/2012 830,000.00 1.200% 491,397.50 276,560.00 1597,957.50
12/1/2013 865,000.00 1.450% 481,437.50 263,280.00 1,609,717.50
12/1/2014 905,000.00 1.700% 468,895.00 249,440.00 1,623,335.00
12/1/2015 945,000.00 1.950% 453,510.00 234,960.00 1,633,470.00
12/1/2016 990,000.00 2.300% 435,082.50 219,840.00 1,644,922.50
12/1/2017 1,035,000.00 2.500% 412,312.50 204,000.00 1,651,312.50
12/1/2018 1,080,000.00 2.950% 386,437.50 187,440.00 1,653,877.50
12/1/2019 1,130,000.00 3.200% 354,577.50 170,160.00 1,654,737.50
12/1/2020 9,505,000.00 3.350% 318,417.50 152,080.00 9,975,497.50
Total
$18,075,000.00 $4,273,626.25 $2,230,893.33 $24,579,519.58
Yield Statistics
Bond Year Dollars
Average Life
$139,430.83
7.714 Years
Average Coupon
Net Interest Cost (NIC)
True Interest Cost (TIC)
3.0650511%
3.0650511%
3.0487292%
Bond Yield for Arbitrage Purposes
All Inclusive Cost (AIC)
2.0865355%
3.2344461 %
IRS Form 8038
Net Interest Cost
3.0650511%
Weighted Average Maturity
7.714 Years
Stephens
Capitalize on Independence"
City of Fayetteville, Arkansas Public Facilities Board
Fixed Rate Refunding Revenue Bonds, Series 2010
(Butterfield Trail Village Project)
Current Refunding Escrow
Date Principal Rate Interest
12/21/2010 - 1/1/2011
2/1/2011 18,992,564.00 0.110% 2,403.99
Receipts
159,968.99
18,994,967.99
Disbursements
159,968.49
18,994,968.49
Cash
Balance
159,968.99
0.50
Total $18,992,564.00
- $2,403.99 $19,154,936.98
$19,154,936.98
Investment Parameters
Investment Model [PV, GIC, or Securities]
Default investment yield target
Securities
User Defined
Cash Deposit
Cost of Investments Purchased with Bond Proceeds
Total Cost of Investments
Target Cost of Investments at bond yield
Actual positive or (negative) arbitrage
Yield to Receipt
Yield for Arbitrage Purposes
State and Local Government Series (SLGS) rates for
159,968.99
18,992,564.00
$19,152,532.99
$19,111,085.96
(41,447.03)
0.1139430%
2.0865355%
11/16/2010
Stephens
Capitalize on Independence"
JAMES N. McCORD
Attorney at Law
The Fulbright Building
217 E. DICKSON STREET
SUITE #102
FAYETTEVILLE, ARKANSAS 72701
TELEPHONE (479) 695-1134
FACSIMLE (479) 442-1490
iimmccordlaw@windstream.net
Kit Williams
Fayetteville City Attorney
City Administration Building
113 W. Mountain
Fayetteville, AR 72701
November 24, 2010
VIA HAND DELIVERY
Re: Fayetteville Public Facilities Board Fixed Rate Refunding Revenue Bonds
(Butterfield Trail Village Project), Series 2010 In Aggregate Principal
Amount Not To Exceed $19,000,000
Dear Kit:
I am counsel to the Fayetteville Public Facilities Board (the "PFB"). Enclosed is a
Resolution unanimously approved by the five members of the PFB on November 23,
2010, authorizing issuance of the above referenced bonds. Also enclosed is a
"Preliminary Overview" of the proposed bond issue prepared by Stephens Inc., Financial
Advisor to the Board of Directors for Butterfield Trail Village, Inc. Dennis Hunt, Senior
Vice President and Manager, Stephens, Inc. reviewed the Overview with the PFB before
the Bond Authorizing Resolution was approved.
Mr. Hunt advised the PFB that the principal amount the Board's outstanding
variable rate bonds for the Butterfield project is $18,835,000. He summarized the key
reasons to convert to fixed rate debt as follows:
Interest Rate Risk. Interest rates are currently at historic lows and may increase in
the future.
Letter of Credit Provider Risk. Because of the limited number of letter of credit
providers for variable rate debt, Butterfield is concerned about its future ability to
obtain a letter of credit provider at a reasonable rate. The American Recovery and
Reinvestment Act allows until December 31, 2010, for the Federal Home Loan
Bank to provide "AAA" letters of credit with participating financial institutions to
secure both variable and fixed rate tax-exempt debt. As a result, Butterfield, in
cooperation with Arvest Bank, will be able to issue its fixed rate debt with a
"AAA" letter of credit over a much longer period of time than its current letter of
credit provider allows.
Covenant Flexibility. Butterfield has negotiated with Arvest Bank a letter of
credit with greater flexibility in the refinancing covenants to allow for the
issuance of additional debt if future capital projects are necessary.
In response to a question from PFB member Tommy Deweese, Dennis Hunt
stated that prior to passage of the American Recovery and Reinvestment Act, the Federal
Home Loan Bank could not issue letters of credit for tax-exempt debt and it will not be
able to do so after December 31, 2010.
Section 33.068(2)(B) of the Fayetteville Code of Ordinances requires that the
Bond Authorizing Resolution approved by the PFB on November 23, 2010, be ratified by
the Fayetteville City Council. A ratifying resolution is on the Agenda for the December 7,
2010, City Council meeting. To answer any questions the Council member may have
regarding this matter, I will attend the Council's Agenda Session on Tuesday, November
30, 2010, at 4:30 p.m. in Room 326 of the City Administration Building. Dennis Hunt
from Stephens Inc. will most likely attend as well.
It may be that the ratifying resolution is an appropriate item for the Consent
Agenda at the December 7, 2010, City Council meeting.
Should there be any questions regarding this matter prior to the Agenda Session,
please contact me or Dennis Hunt.
Sincerely,
pc: Fayetteville Public Facilities
Board members (via e-mail)
Dennis Hunt (via e-mail)
Shep Russell, Bond Counsel (via e-mail)
Steve Gunderson, Borrower's Counsel (via e-mail)
RESOLUTION AUTHORIZING THE ISSUANCE OF THE ISSUER'S
REFUNDING REVENUE BONDS (BUTTERFIELD TRAIL VILLAGE
PROJECT), SERIES 2010 IN AN AGGREGATE PRINCIPAL AMOUNT NOT
TO EXCEED $19,000,000 (THE "BONDS") TO PROVIDE FUNDS TO
REFINANCE DEBT ISSUED FOR A RESIDENTIAL LIFE CARE
RETIREMENT PROJECT IN FAYETTEVILLE, ARKANSAS, FOR
ELDERLY PERSONS; SPECIFYING THAT THE BONDS ARE LIMITED
OBLIGATIONS OF THE ISSUER PAYABLE SOLELY FROM THE TRUST
ESTATE AS PROVIDED IN THE TRUST INDENTURE; APPROVING AND
AUTHORIZING EXECUTION OF THE TRUST INDENTURE WITH
RESPECT TO THE BONDS; APPROVING AND AUTHORIZING
EXECUTION OF THE PRELIMINARY AND FINAL OFFICIAL
STATEMENT WITH RESPECT TO THE SALE' OF THE BONDS; MAKING
CERTAIN FINDINGS AND DETERMINATIONS WITH REFERENCE TO
THE BONDS; AUTHORIZING THE SALE OF THE BONDS; AUTHORIZING
THE EXECUTION AND DELIVERY OF RELATED DOCUMENTS;
PROVIDING FOR REPEAL OF ANY INCONSISTENT PRIOR
RESOLUTIONS OF THE ISSUER; AND PROVIDING FOR THE EFFECTIVE
DATE OF THIS RESOLUTION.
WHEREAS, The Fayetteville Public Facilities Board (the "Issuer") has been organized and
exists under the laws of the State of Arkansas as a public facilities board; and
WHEREAS, the Issuer is a public body corporate and politic duly organized and validly
existing under the Constitution and laws of the State of Arkansas (the "State"), including the
Arkansas Code Annotated §§ 14-137-101, et seq., as amended (the "Act"), and by Ordinance No.
2485, as amended (the "Ordinances"), of the City Council of the City of Fayetteville, Arkansas (the
"City"), adopted on November 21, 1978; and
WHEREAS, for the purposes set forth in the Ordinances, the Issuer desires to issue not to
exceed $19,000,000 in aggregate principal amount of its Refunding Revenue Bonds (Butterfield Trail
Village Project), Series 2010 (the "Bonds") pursuant to a Trust Indenture dated as of December 1,
2010 (the "Indenture") by and between the Issuer and First Security Bank, as trustee (the "Trustee"),
to make a loan to Butterfield Trail Village, Incorporated (thee"Borrower") to provide funds to refund
the Prior Bonds, as defined in the Indenture, which refinanced the acquisition, construction and
equipping of a residential life care retirement facility for the elderly, known as "Butterfield Trail
Village" consisting of approximately 265 independent living units, a skilled nursing care center and
related facilities located on approximately 48 acres in Fayetteville, Arkansas (the "Project"); and
WHEREAS, the Bonds are payable from the Trust Estate (as that term is defined in the
Indenture) (the "Trust Estate"), which Trust Estate includes ;payments on a standby letter of credit
issued by Arvest Bank and a Standby Confirming Letter of Credit issued by Federal Home Loan
Bank of Dallas; and