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Regular City Council Meeting Monday, December 12,2011 Page 8 10. Presentations 11. Business Items (Action Items) a. Consider a Resolution Awarding the Sale of the City's 2011 Bonds Finance Director Chris Miller noted distribution of two (2) bench handouts: one consisting of the actual tabulation of bid results from today's bond sale; and the other a revised resolution outlining the award of sale; with one (1) additional par- agraph added at the bottom of page 6 of the resolution (second paragraph, Section B); both attached hereto and made a part hereof. At the request of Mayor Roe, Mr. Miller noted that by previous City Council ac- tion, staff and the City's bond counsel had been authorized to issue $10,000,000 in General Obligation Bonds for the purpose of financing construction of a new fire station, and as a portion of Phase I of park and recreation improvements. Ms. Terri Eaton of Springsted, the City's Financial Consultant reviewed the re- sults of the sale; and Ms. Mary Ippel, the City's Bond Counsel, was present in the audience to address any questions of the City Council related to legal portions of the sale and implications for the City Council to consider moving forward. Ms. Eaton advised that the Bond Issue had received thirty (30) bidders, based in part on the City's very favorable AAA Bond Rating by Moody's, and due to the size of the issue and qualification of the bonds being very appealing to the market, as well as the reputation of the City of Roseville's financial management. Ms. Eaton advised that the low bidder was FTN Financial Capital Markets at a rate of 2.1588%, well below the estimated 2.88% rating estimated several months ago by bond agencies based on the market. Ms. Eaton advised that this reduced interest rate would result in a savings of approximately $710,000 less in interest costs that those estimated one month ago. Ms. Eaton noted that, as the bonds were being opened earlier today, a citizen group had appealed previous court action related to the Bond Issue. Ms. Eaton advised that when an underwriter (e.g. FTN) purchased the bonds, they in turn wanted to resell them immediately, and such a situation provided them the right to withdraw their bid. In the interest of locking in the 2.15888% interest rate and the timing for bank qualified bonds based on thirty (30) basis points and at such low rates, Ms. Eaton advised that throughout the day, City of Roseville and Springsted staff had reached consensus that there was a strong incentive to see what could be done to salvage the Bond Sale, recognizing the provision that would allow the bonds to be callable, which is typically not preferred,but has been known to occur but at a higher interest rate. Ms. Eaton noted that shorter terms would in turn cost more basis points, and depending on the significance of this cloud on the Bond Sale, and with ongoing negotiations with FTN throughout the day, negotiations had resulted in FTN agreeing to an increase of 28 basis points, raising the interest rate from 2.1588% to 2.43%. In exchange for that additional interest cost esti- mated at $263,000 in additional costs between the two (2) interest rates, Ms. Eaton advised that this rate still remained well below original estimates.