CC_Minutes_2011_1010 - Laserfiche WebLink

Home

Regular City Council Meeting Monday, October 10, 2011 Page 34 • would be conducting a related Public Hearing on October 24, 211 as part of the process; and further advised that, in order to enable the City's Port Authority for these purposes, the City must enact a separate ordinance, currently being drafted by the City's bond counsel but not yet available. Mr. Miller advised that the City Council would be asked to adopt the ordinance at the October 24, 2011 meeting to keep the bond issue on track for the portion to be completed by year end 2011. For the record, Councilmember Pust noted that the City could issue bonds as a City Council or as a Port Authority, with the actual cost of the issue the same, but if issued as a City Council, a referendum would be needed. Mr. Miller advised that there were more distinctions than that, namely a lower administrative cost in front and at the back end of the bond issue. Mayor Roe corrected Councilmember Pust's interpretation of the distinctions in the issuing authority, noting that the City intended to issue General Obligation bonds, that would be subject to a reverse referendum unless the City chose to have a referendum; but that there was no City Ordinance or State requirement to do so unless the City volunteered to do so or through a petition process. Mr. Miller advised that, in the case of the fire station, a separate State Statute ap- plied for allowing capital improvements, including construction of public safety 1110 buildings outside and under a different statutory authority, without referendum but subject to a reverse referendum. Councilmember McGehee requested, by the October 24, 2011 meeting, specifics on the front end and back end savings balanced against whatever obligations there would be under a Port Authority, such as audit costs for any bond or one issued under the Port Authority allowing for a comparative analysis. Mr. Miller advised that, in addition to the Public Hearing and notice requirements, the City Council would be asked to take a series of separate actions all toward the same outcome at the October 24, 2011 meeting. Mr. Miller advised that the rea- son for these actions coming forward at one meeting was due to the time sensitive nature in attempting to save the City significant interest savings by issuing $10 million in bonds yet in 2011. In response to Councilmember McGehee's concerns in understanding the pro- posed process, its urgency and apparent speculative nature of bond rates now and in the future, Mr. Miller advised that the City had a market history in its favor in- dicating that a bank qualified bond issue of no more than $10 million in a given year would be much more marketable and interest a much larger pool of bidders, therefore driving down issue costs and interest rates. If the process was delayed until 2012, and a $20 million bond issue was done, rather than $10 million respec- • tively in 2011 and again in 2012, Mr. Miller advised that the City would miss out on this bank qualified opportunity, in turn costing taxpayers hundreds of thou-