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HomeMy WebLinkAbout2025-013-01.06.2025 - Sale Award Proceedings 2025A GO UR BONDS Series 2025A (002)ITEMS TO INCLUDE ON AGENDA CITY OF WATERLOO, IOWA $3,560,000* (Subject to Adjustment per Terms of Offering) General Obligation Urban Renewal Bonds, Series 2025A • Receipt of bids. • Resolution directing sale. NOTICE MUST BE GIVEN PURSUANT TO IOWA CODE CHAPTER 21 AND THE LOCAL RULES OF THE CITY. January 6, 2025 The Finance Director of the City of Waterloo, State of Iowa, or her designee, met in City Hall, 715 Mulberry Street, Waterloo, Iowa, at 10:30 A.M., on the above date, to open sealed bids received, access electronic bids and to refer the sale of the Bonds to the best and most favorable bidder for cash, subject to approval by the City Council at 5:30 P.M. on the above date. The following persons were present: Maggie Burger, Speer Financial, Inc., Bridgett Wood, City of Waterloo and Kim Bahr, City of Waterloo * * * * * * * * 1 This being the time and place for the opening of bids for the sale of $3,560,000* (Subject to Adjustment per Terms of Offering) General Obligation Urban Renewal Bonds, Series 2025A, the meeting was opened for the receipt of bids for the Bonds. The following actions were taken: 1. Sealed bids were filed and listed in the minutes while unopened, as follows: Name & Address of Bidders: (Attach List of Bidders) 2. The City Clerk then declared the time for filing of sealed bids to be closed and that the sealed bids be opened. The sealed bids were opened and announced. 3. Electronic bids received were accessed and announced as follows: Name & Address of Bidders: (Attach List of Bidders) 4. The best bid was determined to be as follows: Name & Address of Bidder: Fidelity Capital Markets, Boston, Massachusetts True Interest Rate (as -bid): 3.8498% Net Interest Cost (as -bid): $1,641,382.04 In consultation with Speer Financial, Inc., the City's Municipal Advisor, the City considered the adjustment of the aggregate principal amount of the Bonds and each scheduled maturity thereof in accordance with the Terms of Offering and the following actions were taken: Final Par Amount as adjusted: $3,560,000 Purchase Price as adjusted: $3,608,102.40 All bids were then referred to the Council for action. 2 urSpeer Financial, Inc. INDEPENDENT MUNICIPAL ADVISORS ESTABLISHED 1954 DANIEL FORBES President RAPHALIATA McKENZIE MAGGIE BURGER ANTHONY MICELI MARK JERETINA AARON GOLD Senior Vice President Senior Vice President Senior Vice President Senior Vice President Vice President January 6, 2025 The Honorable Quentin M. Hart, Mayor and Members of the City Council City of Waterloo 715 Mulberry Street Waterloo, IA 50703 Dear Mayor Hart and Council Members: Bids were received today for the $3,560,000 General Obligation Urban Renewal Bonds, Series 2025A. There were five bids received, which are listed at the bottom of this letter. Upon examination, it is our opinion that the bid of Fidelity Capital Markets, Boston, Massachusetts, is the best bid received, and it is further our opinion that the bid is favorable to the City and should be accepted. We therefore recommend that the Series 2025A Bonds be awarded to that bidder at a price of $3,608,102.40, being at a true interest rate of 3.8498%. True Account Managers Interest Rate Fidelity Capital Markets, Boston, Massachusetts 3.8498% TD Securities (USA), LLC, New York, New York 3.8530% Robert W. Baird & Co., Inc., Milwaukee, Wisconsin 3.9156% BOK Financial Securities, Inc., Milwaukee, Wisconsin 3.9255% Bernardi Securities, Inc., Northfield, Illinois 4.0087% MB/eg Enclosures Respectfully submitted, SPEER FINANCIAL, INC. jrk atArr Maggie Burger, Sr. Vice President SUITE 2630.230 WEST MONROE STREET • CHICAGO, ILLINOIS 60606 • (312) 346-3700 • FAX (312) 346-8833 SUITE 608 • 531 COMMERCIAL STREET • WATERLOO, IOWA 50701 • (319) 291-2077 • FAX (319) 291-8628 MOODY'S RATINGS Rating Action: Moody's Ratings assigns Aa2 to Waterloo, IA's GO bonds 23 Dec 2024 New York, December 23, 2024 -- Moody's Ratings (Moody's) has assigned a Aa2 rating to the City of Waterloo, IA's General Obligation Urban Renewal Bonds, Series 2025A, with a proposed par amount of $3.6 million, and Taxable General Obligation Urban Renewal Bonds, Series 2025B, with an estimated par amount of $28.6 million. We maintain the city's Aa2 issuer rating and the Aa2 rating on its outstanding general obligation unlimited tax (GOULT) debt. Post -sale, the city will have about $212 million in total debt outstanding. RATINGS RATIONALE The Aa2 issuer rating reflects the city's role as a regional economic hub, and solid though weaker than Aa medians full value per capita and resident income, at around $80,000 and 82% respectively. When incorporating restricted funds available for core operations, fiscal 2023 (year end June 30) available fund balance is strong at around 60% of revenues, relative to a reported ratio of 30%. For fiscal 2024 the city budgeted for a $2 million draw in the general fund, but draft financial statements indicate a small surplus, due in part to the transfer of local option sales tax (LOST) revenues. Other governmental and business type funds are mostly balanced. We expect fiscal 2025 reserve levels to remain healthy inclusive of some potential draws for capital. Despite the state imposing new property tax restrictions, the city maintains budgetary flexibility with significant margin to increase its employee benefits levy and the ability to shift LOST revenue to the general fund. The long-term liabilities ratio will likely remain under 220% of revenues inclusive of the current issuance and fixed costs around 10%. The Aa2 rating on the GOULT bonds is the same level as the city's Aa2 issuer rating because the city has pledged its full faith, credit and taxing power for repayment of the bonds. RATING OUTLOOK We do not assign outlooks to local governments with this amount of debt outstanding FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Decrease in long-term liabilities ratio closer to 150% of revenues - Improvement in resident income nearing 120% and full value per capita closer to $100,000 FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Reduction in fund balance or cash balance closer to 25% of revenue - Increase in long-term liabilities ratio nearing 300% of revenue - Further constraints placed on revenue raising flexibility LEGAL SECURITY The Series 2025A and Series 2025B bonds are backed by the city's general obligation unlimited tax (GOULT) pledge, which benefits from a dedicated levy that is unlimited as to rate or amount. USE OF PROCEEDS Proceeds of the bonds will finance various urban renewal projects throughout the city. PROFILE The City of Waterloo is the county seat of Black Hawk County, located in northeastern Iowa roughly 89 miles northeast of Des Moines and 50 miles northwest of Cedar Rapids. The city provides standard municipal service to a population of about 67,000 residents. METHODOLOGY The principal methodology used in these ratings was US Cities and Counties published in July 2024 and available at https://ratings.moodys.com/rmc- documents/425429. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology. REGULATORY DISCLOSURES For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https:/Iratings.moodys.com/rating-definitions . 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MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements. if INDEPENDENT MUNICIPAL ADVISORS • ESTABLISHED 1954 Speer Financial, Inc. SUITE 608 • 531 COMMERCIAL STREET • WATERLOO, IOWA 50701 • (319) 291-2077 • FAX (319) 291-8628 Investment Rating: Moody's Investors Service ... Aa2 $3,560,000 CITY OF WATERLOO, IOWA General Obligation Urban Renewal Bonds, Series 2025A Date of Sale: January 6, 2025 Average Life: 11.864 Years (Based on TIC) Bidders* Price Maturities Fidelity Capital Markets 101.351% 2027 - 2044 Boston, Massachusetts $3,608,102.40 Morgan Stanley Advisors Asset Management SumRidge Partners TD Securities (USA), LLC New York, New York Robert W. Baird & Co., Inc. Milwaukee, Wisconsin BOK Financial Securities, Inc. Milwaukee, Wisconsin Stifel Bernardi Securities, Inc. Northfield, Illinois Raymond James & Associates, Inc. Ramirez & Co., Inc. SAMCO Capital Markets 101.322% $3,607,061.15 100.747% $3,586,576.05 100.656% $3,583,369.70 Rate 4.000% True Interest* * 3.8498% $1,641,382 FHN Financial Capital Markets American Veterans Group, PBC SDVOB 2027 - 2044 2027 - 2044 2027 - 2044 4.000% 3.8530% $1,642,423 4.000% 3.9156% $1,662,908 4.000% 3.9255% $1,666,115 99.900% 2027 - 2044 4.000% 4.0087% $3,556,454.55 $1,693,030 *Syndicate information is provided by the underwriter. The information contained in this report is the most current available. * *The true interest rate reflects the time value of money where dollars spent in early years have a greater weight than dollars spent in later years. Speer Financial, Inc. CITY OF WATERLOO, IOWA $3,560,000 General Obligation Urban Renewal Bonds, Series 2025A *** FINAL *** Debt Service Schedule Date Principal Coupon Interest Total P+I Fiscal Total 02/05/2025 - - - - - 12/01/2025 - - 117,084.44 117,084.44 - 06/01/2026 - - 71,200.00 71,200.00 188,284.44 12/01/2026 - - 71,200.00 71,200.00 - 06/01/2027 140,000.00 4.000% 71,200.00 211,200.00 282,400.00 12/01/2027 - - 68,400.00 68,400.00 - 06/01/2028 145,000.00 4.000% 68,400.00 213,400.00 281,800.00 12/01/2028 - - 65,500.00 65,500.00 - 06/012029 150,000.00 4.000% 65,500.00 215,500.00 281,000.00 12/01/2029 - - 62,500.00 62,500.00 - 06/012030 155,000.00 4.000% 62,500.00 217,500.00 280,000.00 12/01/2030 - - 59,400.00 59,400.00 - 06/012031 160,000.00 4.000% 59,400.00 219,400.00 278,800.00 12/01/2031 - - 56,200.00 56,200.00 - Call 06/01/2032 170,000.00 4.000% 56,200.00 226,200.00 282,400.00 12/01/2032 - - 52,800.00 52,800.00 - 06/012033 175,000.00 4.000% 52,800.00 227,800.00 280,600.00 12/01/2033 - - 49,300.00 49,300.00 - 06/012034 185,000.00 4.000% 49,300.00 234,300.00 283,600.00 12/01/2034 - - 45,600.00 45,600.00 - 06/012035 190,000.00 4.000% 45,600.00 235,600.00 281,200.00 12/01/2035 - - 41,800.00 41,800.00 - 06/012036 200,000.00 4.000% 41,800.00 241,800.00 283,600.00 12/01/2036 - - 37,800.00 37,800.00 - 06/012037 205,000.00 4.000% 37,800.00 242,800.00 280,600.00 12/01/2037 - - 33,700.00 33,700.00 - 06/012038 215,000.00 4.000% 33,700.00 248,700.00 282,400.00 12/01/2038 - - 29,400.00 29,400.00 - 06/012039 220,000.00 4.000% 29,400.00 249,400.00 278,800.00 12/01/2039 - - 25,000.00 25,000.00 - 06/012040 230,000.00 4.000% 25,000.00 255,000.00 280,000.00 12/01/2040 - - 20,400.00 20,400.00 - 06/012041 240,000.00 4.000% 20,400.00 260,400.00 280,800.00 12/01/2041 - - 15,600.00 15,600.00 - 06/012042 250,000.00 4.000% 15,600.00 265,600.00 281,200.00 12/01/2042 - - 10,600.00 10,600.00 - 06/012043 260,000.00 4.000% 10,600.00 270,600.00 281,200.00 12/01/2043 - - 5,400.00 5,400.00 - 06/01/2044 270,000.00 4.000% 5,400.00 275,400.00 280,800.00 Total $3,560,000.00 - S1,689,484.44 55,249,484.44 - Yield Statistics Bond Year Dollars $42,237.11 Average Life 11.864 Years Average Coupon 4.0000000% Net Interest Cost (NIC) 3.8861134% True Interest Cost (TIC) 3.8498495% Bond Yield for Arbitrage Purposes 3.7360587% All Inclusive Cost (AIC) 3.9473505% IRS Form 8038 Net Interest Cost 3.7614923% Weighted Average Maturity 11.777 Years 25A Waterloo 3.56 TE GO U I SINGLE PURPOSE 11/ 6/2025 11129 AM Speer Financial, Inc. Registered Municipal Advisor January 6, 2025 The City Council of the City of Waterloo, State of Iowa, met in Regular Session, in the Council Chambers, City Hall, 715 Mulberry Street, Waterloo, Iowa, at 5:30 P.M., on the above date. There were present Mayor Quentin Hart, in the chair, and the following named Council Members: Boesen, Nichols, Creighton -Smith, Chiles, Simon, Wilder and Feuss Absent: None Vacant: None 3 Council Member Feuss introduced the following Resolution entitled "RESOLUTION DIRECTING SALE OF $3,560,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2025A," and moved its adoption. Council Member Chiles seconded the motion to adopt. The roll was called and the vote was, AYES: Boesen, Nichols, Creighton -Smith, Chiles, Wilder and Feuss NAYS: None Whereupon, the Mayor declared the following Resolution duly adopted: RESOLUTION NO. 2025-013 RESOLUTION DIRECTING SALE OF $3,560,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2025A WHEREAS, bids have been received for the Bonds described as follows and the best bid received (with permitted adjustments, if any) is determined to be the following: $3,560,000* (SUBJECT TO ADJUSTMENT PER TERMS OF OFFERING) GENERAL OBLIGATION URBAN RENEWAL BONDS, SERIES 2025A Bidder: Fidelity Capital Markets of Boston, Massachusetts The terms of award: Final Par Amount as adjusted: $3,560,000 Purchase Price as adjusted: $ 3,608,102.40 True Interest Rate: 3.8498% Net Interest Cost: $1,641,382.04 -4 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WATERLOO, STATE OF IOWA: Section 1. That the bid for the Bonds as above set out is hereby determined to be the best and most favorable bid received and, the Bonds are hereby awarded as described above. Section 2. That the statement of information for Bond bidders and the form of contract for the sale of the Bonds are hereby approved and the Mayor and Clerk are authorized to execute the same on behalf of the City. Section 3. That the notice of the sale of the Bonds heretofore given and all acts of the Clerk done in furtherance of the sale of the Bonds are hereby ratified and approved. PASSED AND APPROVED this 6th day of January 2025. ATTEST: Kelley Felchle DIGITALLY SI Kelley Felchle, City Clerk 62uerduz rr Quentin Hart, Mayor 5 STATE OF IOWA COUNTY OF BLACK HAWK CERTIFICATE ) ) SS ) I, the undersigned City Clerk of the City of Waterloo, State of Iowa, do hereby certify that attached is a true and complete copy of the portion of the records of the City showing proceedings of the Council, and the same is a true and complete copy of the action taken by the Council with respect to the matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty-four hours prior to the commencement of the meeting as required by law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective City offices as indicated therein, that no Council vacancy existed except as may be stated in the proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of the Council hereto affixed this 6th day of January 2025. Kelley Felciile SIGNED Kelley Felchle, City Clerk, City of Waterloo, State of Iowa (SEAL) OC WAA. T oe o u 4931-5556-0457, v. 1