Res 125-2013 11/19/2013RESOLUTION NO. 125-2013
Resolution Consenting To Dean Dale Special Utility District’s
Assignment Of A Security Interest In The City’s Water Purchase
Contract With Dean Dale Water Supply Corporation (Predecessor In
Interest) To The First National Bank Of Byers
WHEREAS, on December 1, 1998, the City entered into a Water Purchase
Contract (Contract) with the Dean Dale Water Supply Corporation (Dean Dale WSC);
and
WHEREAS, on October 2, 2007, the City consented to the Dean Dale WSC’s
transfer of the Contract to a newly formed Dean Dale Special Utility District (Dean Dale
SUD); and
WHEREAS, Section 10.1 of the Contract requires the City to consent to any
assignment thereof, but provided for the assignment of an interest in said contract to the
U.S. Department of Agriculture (USDA) Rural Development Service, and Dean Dale
WSC became indebted to the USDA in a total amount of approximately $1,162,000
pursuant to said clause; and
WHEREAS, Dean Dale SUD is refinancing the remaining unpaid portion of the
aforementioned debt (approximately $487,000) at a lower interest rate with the First
National Bank of Byers, which is expected to enhance the financial viability of Dean
Dale SUD.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
The City Manager is authorized to execute the attached Letter consenting to the
Dean Dale Special Utility District’s grant of a security interest in the City’s Water
Purchase Contract thereto as collateral for the First National Bank of Byers’ loan to
Dean Dale SUD (including renewals, extensions, and modifications of the loan), with
changes to said Letter as approved by the City Attorney.
PASSED AND APPROVED this the 19th day of November, 2013.
M A Y O R
ATTEST:
City Clerk
November ___, 2013
W. E. Reichert, President
Dean Dale Special Utility District
6741 State Highway 79 N
Wichita Falls, Texas 76305-2765
Re: Consent to Dean Dale Special Utility District assignment of security interest in Contract as
collateral for Refinance of USDA Loan to First National Bank of Byers
Dear Mr. Reichert:
The City of Wichita Falls, Texas (the "City") and Dean Dale Special Utility District (“Dean Dale SUD”),
which is the successor by conversion from Dean Dale Water Supply Corporation, are parties to a Water
Purchase Contract (as amended by Amendments dated October 29, 2002, September 21. 2004, September
19, 2006, September 18, 2007 and October 1, 2008, respectively, hereafter referred to as the "Contract").
The City sells water to Dean Dale SUD pursuant to the Contract. Dean Dale SUD is currently indebted to
the United States of America acting through the Rural Utilities Service of the United States Department of
Agriculture for financing of the construction of Dean Dale SUD's water supply system (the "USDA
Loan"). Pursuant to Section 10.1 of the Contract, the City approved the original assignment of the
Contract rights as collateral for the USDA Loan.
Dean Dale SUD is negotiating a loan with First National Bank of Byers (the "Bank") to refinance the
unpaid indebtedness of the USDA Loan, which was in the original aggregate amount of approximately
1,162,000. The new loan will be at a lower interest rate than the original USDA Loan, and will be in the
amount of approximately $487,000. Section 10.1 of the Contract prohibits Dean Dale SUD's assignment
of the Contract without the approval of the City. Dean Dale SUD has requested the approval of the City to
assign and grant a security interest in the Contract to the Bank as collateral for the Bank's loan to
refinance the USDA Loan.
The City has considered Dean Dale SUD’s request, and, subject to Dean Dale SUD’s acceptance of
this Consent and acknowledgment of succession to the duties of Dean Dale Water Supply
Corporation under the Contract, the City hereby approves Dean Dale SUD's assignment of, and
grant of a security interest in, the Contract as collateral for the Bank's loan to Dean Dale SUD and
for all renewals, extensions, and modifications of the loan. By its signature, Dean Dale SUD hereby
acknowledges that it is the successor to Dean Dale Water Supply Corporation and is obligated to
perform all duties of said corporation contained in the Contract.
City of Wichita Falls Dean Dale Special Utility District
Consent Acceptance of Consent of the City of Wichita Falls. Texas
and
Acknowledgment that Dean Dale Special Utility District is
the successor to all duties of the Dean Dale Water Supply
Corporation under the Contract
Darron Leiker, City Manager W.E. Reichart, President Date
City of Wichita Falls Dean Dale Special Utility District