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June 3, 2004
The City Clerk of the City of Waterloo, Iowa, met in the First Floor Conference Room,
City Hall, 715 Mulberry Street, Waterloo, Iowa, at 11:00 a.m. on Thursday, June 3, 2004,
to open bids and receive and refer the sale of $9,745,000.00 General Obligation Bonds,
Series 2004A, 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: Larry Burger, Vice President of Speer Financial, Inc. and Dan Forbes of Speer
Financial, Inc.
This being the time and place for the opening of bids for the sale of $9,745,000.00
General Obligation Bonds, Series 2004A, the meeting was opened for receipt of sealed bids
for the bonds. The following sealed bids were received, placed on file, but NOT OPENED
and sealed bidding closed:
Name of Bidder
1. Wachovia Bank, N.A., Charlotte, North Carolina
Whereupon the City Clerk declared the time for filing of sealed bids for the sale of
$9,745,000.00 General Obligation Bonds, Series 2004A, to be closed, and whereupon the
City Clerk declared the sealed bids be opened, which were as follows:
Name of Bidder True Interest Rate
1. Wachovia Bank, N.A. Charlotte, North Carolina 4.1563%
Electronic bids received were accessed and announced as follows:
Name of Bidder True Interest Rate
1. Citigroup Global Markets, Inc., Chicago, Illinois 4.0456%
2. Piper Jaffray, Minneapolis, Minnesota 4.0526%
3. Harris Trust & Savings Bank, Chicago, Illinois 4.1173%
4. RBC Dain Rauscher, Inc., Clive, Iowa 4.1783%
The best bid was determined to be as follows:
Citigroup Global Markets, Inc., Chicago, Illinois, with a Net Interest Cost of
$2,783,555.30 and a net interest rate of 4.0456%.
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 3 2004
June 3, 2004
The City Clerk of the City of Waterloo, Iowa, met in the First Floor Conference Room,
City Hall, 715 Mulberry Street, Waterloo, Iowa, at 11:30 a.m. on Thursday, June 3, 2004,
to open bids and receive and refer the sale of $3,825,000.00 General Obligation Bonds,
Taxable Series 2004B, 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: Larry Burger, Vice President of Speer Financial, Inc., Dan Forbes of
Speer Financial, Inc. and Michelle Weidner, Chief Financial Officer.
This being the time and place for the opening of bids for the sale of $3,825,000.00
General Obligation Bonds, Taxable Series 2004B, the meeting was opened for receipt of
sealed bids for the bonds. No sealed bids were received.
Whereupon the City Clerk declared the time for filing of sealed bids for the sale of
$3,825,000.00 General Obligation Bonds, Taxable Series 2004B, to be closed.
Electronic bids received were accessed and announced as follows:
Name of Bidder True Interest Rate
1. Bernardi Securities, Inc., Chicago, Illinois 5.5780%
2. Citigroup Global Markets, Inc., Chicago, Illinois 5.5995%
3. Morgan Keegan & Company, Inc., Nashville, Illinois 5.6302%
4. Griffin, Kubik, Stephens & Thompson, Chicago, Illinois 5.6986%
5. First Albany Capital, Inc., Richmond, Virginia 6.0352%
June 3, 2004
The best bid was determined to be as follows:
Page 2
Bernardi Securities, Inc., Chicago, Illinois, with Net Interest Cost of $1,965,282.25,
and Net Interest rate of 5.5780%
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 3 2004
June 3, 2004
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 Thursday, June 3, 2004. Mayor Timothy J.
Hurley in the Chair. Roll Call: Kincaid, Cole, Schmitt, Gunderson. Members absent:
Greenwood, Clark, Welper.
119947 - Gunderson/Schmitt
that the Agenda, as proposed, for the Special Session on Thursday, June 3, 2004,
at 4:30 p.m., be accepted and approved. Ayes: Four. Absent: Greenwood,
Clark, Welper. Motion carried.
119948 - Gunderson/Kincaid
that copies of the Call for the Special Session on Thursday, June 3, 2004, be
received and placed on file. Ayes: Four. Absent: Greenwood, Clark, Welper.
Motion carried.
BOND SALE
119949 - Larry Burger, Vice
opened at 11:00 a.
2004A and at 11:30
Series 2004B. The
of the money. The
President of Speer Financial, Inc. reported that bids were
m. today on $9,745,000.00 General Obligation Bonds, Series
a.m. today on $3,825,000.00 General Obligation Bonds, Taxable
difference between the two bond issuances is the proposed use
$3,825,000.00 General Obligation Bonds, Taxable Series 2004B
was determined by the bonding attorneys as private money.
Mr. Burger reviewed the report from Moody's Investors Service. Moody's has
assigned an A2 rating with positive outlook to the City of Waterloo. The A2
rating reflects the city's satisfactory and improving financial operations;
moderately growing tax base that benefits from its role as county seat; and
above average amount of rapidly retired debt. The positive outlook reflects the
anticipated effect of the city's well-managed finances, which have led to
projections of improving fiscal strength as evidenced by recent increases in
general fund balances. Moody's believes the city's financial operations will
remain satisfactory and should improve due to prudent fiscal management despite
recent state aid reductions. The city's overall debt burden is averaged at 3.2
percent, while the direct burden of 2.9 percent is above average. Moody's
expects the city's debt burden to remain manageable due to the city's rapid debt
amortization schedule (79% of principal retired in ten years) and expected tax
base growth.
Mr. Burger reviewed the five bids received for the $9,745,000.00 General
Obligation Bonds, Series 2004A. It is the opinion of Speers Financial, Inc.
that the bid received from Citigroup Global Markets, Inc. of Chicago, Illinois
is the best bid received, and Speer Financial recommends that the bonds be
awarded to Citigroup Global Markets, Inc. at a price of $9,733,207.20, plus
accrued interest and a true interest rate of 4.0456%. The total interest cost
is $2,783,555.30. There is about $100,000.00 difference in total interest cost
from the high bid and low bid.
Mr. Burger explained discount, which is designed to pay sales commission costs.
If the city did not offer a discount, the company would pay the commission in
the first to three years of the bonds. The bonds will close at $9,733,207.00
and were sold at 99.87 percent because of $11,792.80 discount costs. The bonds
are sold on a risk as to whether the market will change before the bonds are
paid off.
Mr. Burger reported that the city is now using an electronic bidding process,
and Speers sent out the notice of sale to approximately 350 potential bidders.
Mr. Burger noted that Harris Trust & Savings Bank has 12 underwriters who were
interested in buying bonds, which shows there was a lot of interest in today's
sale.
Mr. Burger explained that there are five companies that will insure the bonds,
and that buying insurance with the A2 rating eliminates the risk to the
underwriters. It was cost effective for the city to buy insurance to receive
the lower interest rate. Underwriters some times do not allow less than AA
rating for bonds to be sold to individual portfolios. The cost for the
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June 3, 2004
Bond Sale - continued
Page 3
insurance is $29,000.00 and is included as part of the bond sale. Part of the
$9,745,000.00 GO Bonds, Series 2004A, was refunding of 1986 bonds. Mr. Burger
reviewed the Debt Service Schedule for the General Obligation Refunding Bonds,
Series 2004A current Refunding 1996 GO and new money. Mr. Burger noted that the
present net value savings on the refunding bonds is $134,413.06.
Mr. Burger reviewed the bids received for the $3,825,000.00 General Obligation
Bonds, Taxable Series 2004B. Five bids were received. It is the opinion of
Speers Financial, Inc. that the bid of Bernardi Securities, Inc. of Chicago,
Illinois with a true interest rate of 5.5780 percent is the best bid received,
and Speer Financial, Inc. recommends that the bonds be awarded to Bernardi
Securities, Inc. at a price of $3,793,650.25, plus accrued interest and a true
interest rate of 5.5780%.
Mr. Burger explained that the $9,745,000.00 is for an essential corporate
purpose and considered by bonding companies for an essential purpose to run the
city such as improvements to streets, etc. The $3,825,000.00 General Obligation
Bonds, Taxable Series 2004B is used for items such as land for the Ferguson
project, and bonding attorney says it is for private use. Persons who buy these
bonds will pay income tax.
Councilperson Gunderson asked if the city pays off some bonds quicker than
others. Michelle Weidner, Chief Financial Officer, responded that the city does
not generally call them in early, we mostly do refinancing to get the lower
interest rates. There are dates restrictions as to how quickly the bonds can be
paid off. Mr. Burger stated that usually the bonds cannot be paid off before
seven years.
Gunderson/Kincaid
that proof of publication of notice of public hearing on Notice of Sale on
consideration of the proposition of issuance of not to exceed $9,745,000.00
General Obligation Bonds, Series 2004A, as published in the Waterloo Courier on
May 25, 2004, be received and placed on file. Ayes: Ayes: Four. Absent:
Greenwood, Clark, Welper. Motion carried.
119950 - Schmitt/Gunderson
that "Resolution directing sale of $9,745,000.00 General Obligation Bonds,
Series 2004A, to Citigroup Global Markets, Inc. of Chicago, Illinois for a true
interest rate of 4.0456 percent", be adopted. Ayes: Four. Absent: Greenwood,
Clark, Welper.
Resolution adopted and upon approval by Mayor assigned No. 2004-349.
119951 - Gunderson/Schmitt
that proof of publication of notice of public hearing on Notice of Sale on
consideration of the proposition of issuance of not to exceed $3,825,000.00
General Obligation Bonds, Taxable Series 2004B, as published in the Waterloo
Courier on May 25, 2004, be received and placed on file. Ayes: Four. Absent:
Greenwood, Clark, Welper. Motion carried.
119952 - Schmitt/Gunderson
that "Resolution directing sale of $3,825,000.00 General Obligation Bonds,
Taxable Series 2004B, to Bernardi Securities, Inc. of Chicago, Illinois for a
true interest rate of 5.5780% percent", be adopted. Ayes: Four. Absent:
Greenwood, Clark, Welper.
Resolution adopted and upon approval by Mayor assigned No. 2004-350.
119953 - Kincaid/Cole
that "Resolution authorizing the redemption of outstanding General Obligation
Bonds, Series 1996, of the City of Waterloo, Iowa, dated June 1, 1996 and
directing notice of redemption and approving Funding Trust Agreement" be adopted
and Mayor and City Clerk authorized to execute same. Ayes: Four. Absent:
Greenwood, Clark, Welper.
Resolution adopted and upon approval by Mayor assigned No. 2004-351.
June 3, 2004 Page 4
ADJOURNMENT
119954 - Gunderson/Kincaid
that the Council adjourn at 5:03 p.m. Ayes: Four. Absent: Greenwood, Clark,
Welper. Motion carried.
Nancy Eckert , CMC
City Clerk
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