Broken Arrow Economic Development Authority
Meeting of: 03/19/2019
Title:
title
Consideration, discussion and possible approval of Resolution No. 1198, a Resolution of the Broken Arrow Economic Development Authority (the "authority") authorizing the issuance of its tax increment revenue note, taxable series 2019 (the "note") in the aggregate principal amount of $7,565,000; waiving competitive bidding and authorizing the note to be sold on a negotiated basis; approving and authorizing execution of a security agreement by and between the City and the Authority pertaining to a pledge of certain sales tax increment revenue and ad valorem tax increment revenue; approving and authorizing execution of a general bond indenture and a series 2019 supplemental note indenture (collectively, the "indenture") authorizing the issuance and securing the payment of the note; providing that the organizational document creating the authority is subject to the provisions of the indenture; approving and authorizing the transfer of funds; authorizing and directing the execution of the note and other documents relating to the transaction; and containing other provisions relating thereto
End
Background:
The Broken Arrow Economic Development Authority issued a note (the "2010 Note") with Bank of Oklahoma in 2010 to finance the Flight Safety project and to provide funding for downtown redevelopment. The original amount of the loan was $9,715,000 with principal and interest payments every April 1st and October 1st until the final maturity of October 1, 2030. The current principal balance on the 2010 Note is $7,515,000. The 2010 Note can be paid off by the Authority at any time with no penalty or premium.
The interest rate on the 2010 Note is variable (6-month LIBOR plus 2.0%) and adjusts every six months. When the 2010 Note was issued the interest rate was initially set at 2.45%. Currently the 2010 Note interest rate is 4.87% due to the rise in short term interest rate...
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