HomeMy WebLinkAboutMinutes-06/12/2002• •
June 12, 2002
The City Clerk of the City of Waterloo, Iowa, met in Council Chambers, City Hall, 715
Mulberry Street, Waterloo, Iowa, at 12:00 noon on Wednesday, June 12, 2002, to open bids
and receive and refer the sale of $6,900,000 General Obligation Bonds, Series 2002A, and
$1,550,000 General Obligation Bonds, Taxable Series 2002B, to the best and most favorable
bidder for cash, subject to approval of the City Council at 4:30 p.m. on the above date.
The following persons were present at said meeting: Mayor John Rooff, City Clerk Nancy
Eckert, Chief Financial Officer Michelle Weidner, Larry Burger and Dan Forbes from Speer
Financial, Inc.
This being the time and place for the opening of bids for the sale of $6,900,000 General
Obligation Bonds, Series 2002A, the meeting was opened for receipt of bids for the bonds.
The following sealed bids were received, placed on file, but NOT OPENED and sealed
bidding closed:
1.
2.
3.
$6,900,000 General Obligation Bonds, Series 2002A
Name of Bidder
Salomon Smith Barney, Chicago, Illinois
Harris Trust & Savings Bank, Chicago, Illinois
RBC Dain Rauscher, Inc., West Des Moines, Iowa
Whereupon the City Clerk declared the time for filing of sealed bids for the sale of
$6,900,000 General Obligation Bonds, Series 2002A, to be closed, and whereupon the City
Clerk declared the sealed bids be opened, which were as follows:
Name of Bidder
Salomon Smith Barney, Chicago, Illinois
Harris Trust & Savings Bank, Chicago, Illinois
RBC Dain Rauscher, Inc., West Des Moines, Iowa
Net Interest
4.3874%
4.4708%
4.4903%
This being the time and place for the opening of bids for the sale of $1,550,000 General
Obligation Bonds, Taxable Series 2002B, the meeting was opened for receipt of bids for
the bonds. The followng sealed bids were received, placed on file, but NOT OPENED and
sealed bidding closed:
1.
2.
3.
4.
5.
6.
$1,550,000 General Obligation Bonds, Taxable Series 2002B
Name of Bidder
Cronin & Co., Inc., Minneapolis, Minnesota
U.S. Bancorp Piper Jaffray, Minneapolis, Minnesota
United Bankers' Bank, Bloomington, Minnesota
Bernardi Securities, Inc., Chicago, Illinois
Griffin, Kubik, Stephens & Thompson, Inc., Chicago, Illinois
RBC Dain Rauscher, Inc., West Des Moines, Iowa
Whereupon the City Clerk declared the time for filing of sealed bids for the sale of
$1,550,000 General Obligation Bonds, Taxable Series 2002B,to be closed, and whereupon the
City Clerk declared the sealed bids be opened, which were as follows:
Name of Bidder Net Interest
Cronin & Co., Inc., Minneapolis, Minnesota 5.5986%
U.S. Bancorp Piper Jaffray, Minneapolis, Minnesota 5.6043%
United Bankers' Bank, Bloomington, Minnesota 5.6356%
Bernardi Securities, Inc., Chicago, Illinois 5.6773%
Griffin, Kubik, Stephens & Thompson, Inc., Chicago, Illinois 5.6868%
RBC Dain Rauscher, Inc., West Des Moines, Iowa 5.8761%
Whereupon all bids were referred to Speer Financial, Inc., and the meeting adjourned to
4:30 p.m. in the City Hall Council Chambers on June 12, 2002.
June 12, 2002
June 12, 2002
Page 2
The Council of the City of Waterloo, Iowa, met in Special Session at City Hall Council
Chambers, Waterloo, Iowa, at 4:30 p.m. on Wednesday, June 12, 2002. Mayor John R. Rooff
in the Chair. Roll Call: Greenwood, Clark, Hurley, Getty. Absent: Berry, Welper,
Jordan.
117086 - Getty/Hurley
that the Agenda, as proposed, for the Special Session on Wednesday, June 12,
2002, at 4:30 p.m. be accepted and approved. Ayes: Four. Absent: Berry,
Welper, Jordan. Motion carried.
117087 - Hurley/Greenwood
that copies of the Call for the Special Session on Wednesday, June 12, 2002, at
4:30 p.m. be received and placed on file. Ayes: Four. Absent: Berry,
Welper, Jordan. Motion carried.
BOND SALE
117088 - Larry Burger, Vice President of Speer Financial, Inc., stated that after the
public hearing, it was determined that part of the bonds relating to the
airport improvements needed to be taxable bonds. Mr. Burger stated that the
bonding attorney determined $1,550,000 needed to be taxable bonds, and the
decision was made to include $1,550,000 in the Official Statement because the
interest rate was low.
Mr. Burger reviewed the bids received today for $6,900,000 General Obligation
Bonds, Series 2002A. There were three bids received, with Salomon Smith Barney
the low bidder.
Mr. Burger reviewed the report received from Moody's Investors Service.
Moody's affirmed the A2 rating for the city. The assignment of the A2
underlying rating is based on the city's narrowed, but stabilized financial
operations, supported by a stable economy and moderate tax base growth, and a
manageable amount of rapidly retired debt. Moody's reported that John Deere
remains the city's largest employer, and Deere's staff levels have remained
relatively constant, despite the current problems in the U.S. Mr. Burger
stated that we were a little concerned because Deere recently received a
downgrade on tts bond rating. Moody's reported that the city's debt payout is
rapid, with 75.3 percent of principle retired within ten years. Mr. Burger
stated that Moody's was quite enthused about the Riverfront Renaissance
Project. Moody's referred to the $16 million grant from Vision Iowa, and if
the grant is approved the city would supplement the project with $18 million.
Moody's reported that the city plans to hold a referendum to extend the sales
tax until 2013; however, if the sales tax extension is not approved, there may
be great reliance on general obligation debt.
Mayor Rooff stated that Moody's A2 rating speaks to the city's ability, even
with John Deere's downgrade. Mr. Burger stated he believes Moody's recognizes
that the city has been diversifying over the past nine or ten years.
Councilperson Hurley stated that Moody's recognized the multi divisions within
the John Deere Company with multi products, and that in our city the products
are doing well.
Councilperson Greenwood asked about Moody's comment regarding GO Bonds for the
Riverfront Renaissance Project. Michelle Weidner, Chief Financial Officer,
replied that the city will issue bonds to fund the Riverfront Renaissance
Project, but those bonds will be repaid with Local Option Sales Tax revenue.
Mr. Burger reviewed the bidders list for $6,900,000 General Obligation Bonds,
Series 2002A. Mr. Burger stated three bids were received with 14 companies
interested in the bonds. Mr. Burger recommended that the city accept the bid
from Salomon Smith Barney with a net interest rate of 4.3874 percent. Mr.
Burger explained that the bonds were sold below the 5.09 percent bond buyer
index, which is what the city could have been selling for today. Mr. Burger
reported that the city's interest rate on last year's general obligation bond
sale was 4.54 percent, and the interest rate on the city's bonds in 2000 was
5.58 percent.
Mr. Burger explained how the amount of $1,550,000 was broken out for the
airport. The bonding attorney looked at the floor plans and determined a
certain percentage of the airport is leased out to private industry. Mr.
Burger will get a copy of the letter from the bonding attorney explaining how
he arrived at the taxable bonds.
• •
June 12, 2002
• •
BOND SALE CONTINUED
Page 3
Councilperson Hurley asked why the city pays no principal or interest the first
year. Mr. Burger responded that based on the budgeting process, the interest
is usually budgeted to start a year or two after the sale.
Mr. Burger stated that the closing date for the sale of the bonds is June 27,
2002. The city will receive $6,831,000, plus accred interest from June 1, 2002
from the underwriter, for the $6,900,000 General Obligation, Series 2002A.
Mr. Burger explained that the Official Statement was sent out two weeks ago,
and city representatives went to Moody's for the bond rating. The companies
had two weeks to get their orders taken. The discount is the commission they
pay their sales people and it is offered up front.
Councilperson Hurley asked how the city pays for Mr. Burger's services. Mr.
Burger explained that Speer, Financial, inc. puts the entire issue together and
takes the city through the process. Speer Financial, Inc. has an all inclusive
fee contract, which is built right into the bond issue.
Getty/Hurley
that proof of publication of Notice of Sale on consideration of the proposition
of issuance of not to exceed $6,900,000 General Obligation Bonds, Series 2002A,
as published in the Waterloo Courier on June 4, 2002, be received and placed on
file. Ayes: Four. Absent: Berry, Welper, Jordan. Motion carried.
117089 - Getty/Clark
that "Resolution authorizing sale and award of $6,900,000 General Obligation
Bonds, Series 2002A, to Salomon Smith Barney of Chicago, Illinois, with net
interest rate of 4.3874 percent", be adopted. Ayes: Four. Absent: Berry,
Welper, Jordan.
Resolution adopted and upon approval by Mayor assigned No. 2002-354.
117090 - Getty/Hurley
that the City Clerk be instructed to return certified checks to unsuccessful
bidders. Ayes: Four. Absent: Berry, Welper, Jordan. Motion carried.
4
117091 - Hurley/Clark
that proof of publication of Notice of Sale on consideration of the proposition
of issuance of not to exceed $1,550,000 General Obligation Bonds, Taxable
Series 2002B, as published in the Waterloo Courier on June 4, 2002, be received
and placed on file. Ayes: Four. Absent: Berry, Welper, Jordan. Motion
carried.
117092 - Getty/Greenwood
that "Resolution authorizing sale and award of $1,550,000 General Obligation
Bonds, Taxable Series 2002B, to Cronin & Co., Inc. of Minneapolis, Minnesota,
with net interest rate of 5.5986 percent", be adopted. Ayes: Four. Absent:
Berry, Welper, Jordan.
Resolution adopted and upon approval by Mayor assigned No. 2002-355.
117093 - Hurley/Clark
that the City Clerk be instructed to return certified checks to unsuccessful
bidders. Ayes: Four. Absent: Berry, Welper, Jordan. Motion carried.
117094 - Clark/Greenwood
that Tax Exemption Certificate for $6,900,000 General Obligation Bonds, Series
2002A, be approved. Ayes: Four. Absent: Berry, Welper, Jordan. Motion
carried.
117095 - Clark/Greenwood
that Continuing Disclosure Certificate for $6,900,000 General Obligation Bonds,
Series 2002A, be approved. Ayes: Four. Absent: Berry, Welper, Jordan.
Motion carried.
June 12, 2002 Page 4
BOND SALE CONTINUED
117096 - Clark/Greenwood
that "Resolution authorizing and providing for issuance of $6,900,000 General
Obligation Bonds, Series 2002A, and levying tax to pay said bonds", be adopted.
Ayes: Four. Absent: Berry, Welper, Jordan.
Resolution adopted and upon approval by Mayor assigned No. 2002-356.
117097 - Hurley/Getty
that Continuing Disclosure Certificate for $1,550,000 General Obligation Bonds,
Taxable Series 2002B, be approved. Ayes: Four. Absent: Berry, Welper,
Jordan. Motion carried.
117098 - Getty/Hurley
that "Resolution authorizing and providing for issuance of $1,550,000 General
Obligation Bonds, Taxable Series 2002B, and levying tax to pay said bonds", be
adopted. Ayes: Four. Absent: Berry, Welper, Jordan.
Resolution adopted and upon approval by Mayor assigned No. 2002-357
ADJOURNMENT
117099 Clark/Hurley
that the Council adjourn at 4:55
Jordan. Motion carried.
p.m.
Ayes: Four. Absent: Berry, Welper,
Nancy 'Eckert
City Clerk
• •