CC 02-25-1985 - Laserfiche WebLink

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. . . . MINUTES OF REGULAR COUNCIL MEETING Village of Arden Hills Monday, February 25, 1985, 7.30 p.m. Village Hall Call to Order Pursuant to due call and notice thereof, the ~eeting was called to order at 7:30 p.m. by Mayor Woodburn. Roll Call Present: Mayor Robert Woodburn, Councilmembers Dale Hicks, Nancy Hansen, Gary Peck, Thomas Sather None Treasurer Donald Lamb, Clerk Administrator Charlotte McNiesh Public Works Supervisor Robert Raddatz, Parks Director J. T. Buckley Absent: Also Present: Approval of Minutes Motion was made by Hicks, seconded by Peck, that the minutes of February II, 1985 be approved as amended. Motion carried unanimously. (5 - 0) BUSINESS FROM THE FLOOR None Improvement Bonds of 1985 - Steven Mattson, Juran and Moodv Mr. Mattson presented to the Council two options for issuance of the upcoming bond issue. The first option he discussed would be in the amount of $2,515,000, would include refinancing of the temporary bond issue of 1982 and various other projects dating from 1978 through 1984 which have been financed inter- nally. His second option provided for refinancing of the 1982 temporary issue and projects 84-1, 2 and 3 (Lametti, Royal Hills North, and McClung Third Addition), and would result in a bond issue of $2,165,000. Both proposed bonds are structured assuming 105X of principal and interest payments, and no pre- payment of assessments. (Briggs and Morgan, Bond Counsel, requires that the cash flow sheet be based on 105X of funds needed for debt service.) Any pre- payment of assessments would hopefully be re-invested at the same or a higher interest rate than is being paid on the bonds. Mattson also presented a second cash flow sheet for the first option presented (sheet labeled Option A). This option provides for total payoff by 1996, is shortened by four years. This structure would bring the total net interest.rate down, would probably be more attractive to investors, and the rating firm of Moody's would prefer it, could possibly improve City's rating from A to A-I. Although bond would be paid off in 1996, there would still be assessment monies corning to the City from the projects covered in the bond, which could then be re-invested as the City chose. Assuming the bond is issued in the amount of $2,515,000, Council asked Mattson his recommendation...which of the proposed cash flow structures would be best for the City? He stated that while the first presentation, extending four more years, is more conservative, he feels the second is more saleable, would save the City interest monies, and could increase City's financial rating. Mr. Mattson explained that when a bond sale is contemplated, financial rating of the City is obtained from either or both Moody's and Standard and Poor's. He recommends the rating be obtained from Moody's, since they deal mainly in public institutions, whereas Standard and Poor's deals more in corporations; also Moody's rating can be obtained more quickly. He plans to submit the Arden Hills' prospectus to Moody (will probably fly to New York himself), will have rating results before the bond sale; feels the City will certainly receive an A rating, and possibly an A-I. Usually A-I ratings are not given to Cities under 15,000 in population, would be the only factor he sees in Arden Hills not receiving this rating. He has budgeted $2,500 for obtaining this rating, but actual costs may not exceed $1,500. Hicks queried why interest rates begin at approximately 6% and climb over the period of time the bond is out...Mattson explained that investors are willing to tie up their money that long only with the promise of increasing interest.