HomeMy WebLinkAbout07/01/1987 - Special Minutes City Council MINUTES
CITY COUNCIL SPECIAL MEETING
WEDNESDAY, JULY 1, 1987
5:00 P.M.
COUNCIL MEMBERS PRESENT:
STAFF PRESENT:
VISITORS PRESENT:
Mayor Ringer, Councilmen Jones, Brown,
Boughton, McIlhaney, Haddox, Gardner
City Manager Cole, City Attorney Locke,
City Secretary Jones, Deputy Finance
Director Schroeder, Assistant City
Manager Ragland
See guest register.
Agenda Item No. 1 - Consideration of authorizin~ the city's
Financial Advisors to pursue the refundin~ of a portion of
College Station outstanding General Obligation Bonds.
Mr. David Fetzer, Financial Advisor to the City of College
Station, presented a summary of the four series of general
obligation bonds to be refunded. He defined the two kinds of
refunding, "current" refunding and "advance" refunding, and
stated that he was proposing a combination of the two. He
described two savings scenarios, (1) level annual savings, and
(2) upfront savings; he suggested that the Council consider
"upfront savings"and commented on reasons why it could be more
effective.
Mr. Fetzer outlined procedures and listed the various costs
associated with the refunding. He reviewed the schedules and
figures furnished in an Analysis provided to the Council. He
discussed the amount of savings, and answered questions from the
councilmembers.
Mr. Fetzer projected that by using the level annual savings
alternate on the bonds to be refunded, the effective rate would
be 7.03%; and, by using the upfront savings, the effective rate
would be 7.11%. He noted that currently the effective rate is
10.169%.
Councilman Haddox asked if the cost of issuance is a fixed cost.
Mr. Fetzer replied that it is an estimated figure compiled
through observation and experience with negotiations similar to
this transaction.
Mr. Fetzer stated that the current refunding defines the refund-
ing of general obligation bonds which will be called on August
15, 1987. Refunding bond proceeds will be invested in the escrow
account and on August 15, 1987 will be called and paid off. The
two series of bonds for advanced refunding will be due in
February 1992 and 1994. This transaction will involve buying
government securities to meet payment schedules until the cal~
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CITY COUNCIL SPECIAL MEETING
WEDNESDAY, JULY 1, 1987
Page 2
He noted that the city's current insurance ratings are A-1 and
At; if the city is successful in the insurance consortiums, the
city will automatically receive a AAA rating.
~. Fetzer pointed out that under the new tax code, the funds may
be advanced twice.
Councilman Brown moved to direct staff to proceed with the
refunding; the current refunding for two general obligation bonds
due in August and the advanced refunding for two general
obligation bonds due in 1992 and 1994, and applying the level
annual savings method.
Councilman Jones seconded the motion.
After general discussion by the Council, Councilman McIlhaney
moved to amend Councilman Brown's motion by replacing the "level
annual savings" with "upfront savings."
Councilman Boughton seconded the motion made by Councilman
McIlhaney. The vote was unanimous, 7-0, to approve the amendment
to the main motion.
The motion to proceed with the refunding and apply the "upfront
savings" scenario carried unanimously, 7-0.
The council concurred to meet on Tuesday, July 14th at 5:00 P.M.
to consider the final proposal.
Agenda Item No. 2 - Adjourn.
The meeting was adjourned at 5:35 p.m.
APPROVED:
ATTEST:
Dian Jone~ Secretary
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