HomeMy WebLinkAbout04/23/1985Special Council Meeting
Council Chambers
April 23, 1985
4:00 p.m.
Mayor Del Bowers in the Chair. Roll call: Getty, Lichty, Penaluna,
Klinger, Dowie, Wright, Seeber.
87310 - Moved by Klinger, seconded by Dawie
that the Agenda as proposed for the Special Session of April 23,
1985, at 4:00 p.m., be accepted and approved.
Motion carried.
87311 - Moved by Getty, seconded by Klinger
to receive and file the calls of the Special Meeting.
Motion carried.
87312 - Mayor Del Bowers said that it was time for discussion between the
Employees Reorganization Committee for the Rath Packing Company and
the City Council regarding the Reorganization Plan for the Rath
Packing Company and the proposed subordination of the City's position
in the Rath Packing.
Mayor Bowers announced that he had asked several department heads to
do some investigation into some of the statements that Mr. Gerry
Burns made regarding proposed financing for the Rath Packing
Company.
Larry P. Burger, City Clerk/Auditor, stated that he had investigated
the statement made regarding purchasing and funding of the Rath
Packing Company's Columbus Junction Plant with a $10,000,000 grant
from the Department of Agriculture. Burger continued that he had
talked with John Walker from the Farm Home Administration Office from
Des Moines regarding their policy of grant for the operation of
various businesses in the state.
Burger outlined some of the information he had received from Mr.
Walker regarding loan guarantees that the Farmers Home
Administration makes. Some of these are as follows: loans are only
submitted to communities of a population of 50,000 and under;
$10,000,000 would be an upper limit of a loan that they would
guarantee; the loan guarantee from the FFJA would only be for 80% of
the loan with the other 20% being guaranteed by the bank making the
loan; FHA looks for a local lender in a community close by the
project that they are undertaking; and that the funding for the FHA
Office is not presently in the federal fiscal year budget beginning
October 1, 1985.
Jim Lindsey, Director of Community Development, stated that the City
of Waterloo could not subordinate the position in the Rath Packing
Company without prior approval from HUD.
W. David Tyler, City Attorney, presented a Memorandum of Agreement in
principal that he asked the Council to review and consider for
signing between the City of Waterloo and G.N.B. Investment Bankers
regarding the subordination of the City's position in the Rath
Packing Company.
April 23, 1985 Page Two
87312 - Councilperson Getty asked that a line be added to Roman Numeral I
(cont.) Page 1 stating this agreement is subject to HUD approval.
Discussion then turned to Page 6 Roman Numeral V paragraph A
regarding the possibility of the Board of Directors of Rath Packing
Company having less than 9 members on the Board. This paragraph
needs to reflect the language of 9 Board members or less.
Tyler stated, that the City would not subordinate unless all the
portions of this agreement were met.
Moved by Penaluna, seconded by Dowie
that the Council meet in Executive Session to discuss the City's
position and the proposed subordination of the City to the Rath
Packing Company.
The City Attorney stated that the Council was allowed to meet in
Execution Session according to the potential litigation that is
involved with the Rath Packing Company. Ayes: Five. Nays: Lichty,
SeeLer.
Motion carried.
EXECUTIVE SESSION
87313 - Moved by Getty, seconded by Lichty
to adjourn the Executive Session.
Motion carried.
87314 - Gerry Burns of the G.N.B. Investment Bankers asked that the agreement
be changed on Page 2 to reflect the following:
City Committee Total
1. June 5, 1986 $131,250 $65,000 $196,250
2. October 5, 1986 $131,250 $65,000 $196,250
3. February 5, 1987 $131,250 $65,000 $196,250
4. June 5, 1987 $131,250 $65,000 $196,250
5. October 5, 1987 $131,250 $65,000 $196,250
Gerry Burns of G.N.B. Investment Bankers stated that he could offer
the City as security of the Trademark if the Trademark was not sold
the following week.
Vern Petrie of the Employees Reorganization Committee of the Rath
Packing Company asked that on Page 1 Roman Numeral II Interest Rates
and Principal that the 7% that is outlined in the agreement be
lowered to the rate that is in existance at the present time of the
loan pay back. Discussion followed regarding what rate of interest
the present loan is at.
The Council stated that they would accept the present interest rate.
Moved by Getty, seconded by Seeber
that "Resolution of Memorandum of Agreement in Principle as amended
between the City of Waterloo, the Employees Reorganization Group of
Rath Packing Company, and G.N.B. Investment Bankers of Houston,
Texas", be adopted. Ayes: Seven
Resolution adopted and upon approval by Mayor assigned No. 1985-185.
87315 - Moved by Dowie, seconded by Penaluna
that the Council adjourn.
Motion carried.
Larry P. Burger
City Clerk/Auditor