1990-02-12 CC Minutes Special
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SPECIAL MEETIl'G
OF THE
ALBERTVILLE CITY ~IL
MINOTES
FEBRUARY 12. 1990
A special meeting of the Albertville City Council was called to order by
Mayor Gary Schwenzfeier. Members present included Jim Krystosek, IbnatuB
Vetsch. fun Cornelius and Bob Braun. Others present included ~ Andrews
and Brad Farnham.
The PJZ'POSe of the meeting was to consider and approve the sale of
$435.~.m of G.O. ~rovement Bonds of 1990 and $2'10.~.m of G.O. Tax
Increment Bonds of 1990.
Brad briefly reviewed the Preliminary Official Statement for the Bond
Sale. There were several questions regarding the information included in the
document, which Brad discussed and explained.
Questions focused on the City's debt level. A question was raised
regarding whether or not the General Obligation Debt amount seemed high. Brad
noted that yes in fact the debt is high, hIt that the amount is sanewhat
deceiving. first of all the debt for the Joint Power's Bond is included as
part of the City's debt even though. the debt is shared by the other three
cities involved in the Joint Power's Agreement. Secondly it was noted that the
City has incurred alot of General Obligation Debt because of the fact that the
City is growing rapidly and has had to make improvements to keep up with the
growth.
A sea>nd question was raised. regarding the Net Direct and Net Over ~ing
Debt. Brad explained that this information not only shows the City's Debt bJ.t
all the other taxing jurisdictions' bonded indebtness as well.
There was a question regarding how our debt compares to other cities. To
this question>> Brad noted that it is difficult to ~ because each city is
different and Yal are not really CODPll'ing apples to apples.
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Hearing no other questions regarding the Preliminary Official Statement,
Brad next reviewed with the Council the outcaoe of the bidding process . It was
noted that there was only one bid subnitted for the two lx>nds. rot noted that
it was a g<XXi bid just the same.
The bids :received were fran Piper, Jaffray and Hopwood with the following
rates :
$435.a2l'J.m of G.O.
lq>rovement Bonds of 1990
$270.~.m of G.O. Tax
Inclement Bonds of 1990.
NET INTEREST RATE
6.79%
6. 73%
Brad noted that if he did not feel that these were gocx:l rates he would
have recaJlIJlP.nded that the Ca.m.cil reject the bids and go with a negotiated
sale. rot does not feel that the City would do any better. Brad also pointed
out that he had checked. with the Juran and lbJdy's Trading Board and they felt
that these were excellent rates.
Brad did do some checking to see why there was only one bid for each of
the sales and was informed that these are BaDe of the reasons:
1. There were several large sales scheduled. for the next day and that
the caopanies were not interested in bidding on the smaller sales.
2. That there was some concern regarding the Debt Per Capita for a City
the size of Albertville.
3. One bidder stated that he could not believe that the City has
experienced the type of growth Albertville has in the past five
years .
4. That because of the size of the issues that it is difficult for the
Underwriters to make JOODeY. He noted that at the rate :received the
Underwriter is making about $12.m per bond. and that historically
they make between $a?} and $25 per bond. and at this rate they can not
afford to sell the lx>nds.
Hearing no other questions or oarments an motion was made by Ihnatus
Vetsch to award. the bid for the $435 ,~.m of G. O. lJQprovement Bonds of 1990
to Piper. Jaffray and HopWOOd.. The motion was seconded by fun Cornelius. All
were in favor and the motion carried..
A motion to approve the bids for the $270 .~.m of G. O. Tax Increment
Bonds of 1990 to Piper, Jaffray and Hopwood was made by IbnatuB Vetsch and
seconded by fun Cornelius. All were in favor and the motion carried.
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Brad briefly reviewed with the Ca.m.cil BaDe past sales and the cash flows
for the sale. The cash flows were almost the same as they had been in the
schedules shown to the Council prior to the scheduling of the sale.
There was BaDe discussion regarding the financing of the Maintenance
Building. Brad noted that the brllding could be financed through equiI:1OOllt
certificates and likely in a negotiated sale because of its size.
There was BaDe discussion aOOut how the City could get rid of the Joint
power's Board debt. Several points were raised rot no action will be taken on
this matter until the Bond. Attorneys have an opportunity to review the issue.
Hearing no other ~lIEmts or questions a motion was made to adjourn the
meeting. The motion was made by Jim Krystosek and seconded by Ibnatus Vetsch.
All were in favor and the motion carried.
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