Council Minutes
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
February 14, 2005
The city council of the city of Grand Forks, North Dakota met in special session in the council chambers in City Hall on Monday, February 14, 2005 following the committee of the whole meeting with Mayor Brown presiding, pursuant to call by Mayor Brown, which was served on all members. Present at roll call were Council Members Brooks, Hamerlik, Gershman, Christensen, Kerian (teleconference), Kreun - 6; absent: Council Member Glassheim - 1.
Mayor Brown announced that anyone wishing to speak to any item may do so by being recognized prior to a vote being taken on the matter, and that the meeting is being televised.
ADOPT RESOLUTION AUTHORIZING THE ISSUANCE OF
SALES TAX REVENUE REFUNDING BONDS, SERIES 2005A
The staff report from the finance and administrative services director relating to the advance refunding of Sales Tax Revenue Bonds, Series 1997A, with recommendation to approve the advance refunding of Sales Tax Revenue Bonds, Series 1997A (Alerus Debt) and adopt resolution authorizing refunding of debt at a floor of $3.5 million in present value savings.
Council Member Hamerlik stated that there were certain provisions that needed to be done because of the situation and would like the recommendation of the city auditor on how that would have to be worded.
The city auditor reported that this is the refinancing of the Alerus Center bonds from 1997 and in the market that rates appear very good to advance refund this issue, it is not callable until 2007 but the timing of the market is critical, and are asking for and recommending passing of a resolution to authorize the sale of Sales Tax Revenue Bonds, Series 2005A, defeasance of or basically pay off and put in escrow enough money to call the original debt when it is callable in 2007 and issue new debt at considerable savings to the taxpayers. He stated savings on this issue by refunding at this point and if the market holds about $3.9 million in payments, roughly $228,000-$230,000 a year to the debt service. He stated we need to act quickly on this because of where the market is and don't want it to fluctuate upwards; a copy of the resolution drafted by Lynn Endorf of the Dorsey firm was sent to the council, and the most critical part of that resolution falls on page 2, paragraph (e), where it states we will only do this refinancing if there is at least a $3.5 million savings, calculated on the net present value basis, and that gives the Mayor and himself the authority as they move forward with this and if things hold up to actually bring this to conclusion and do the refinancing and closing by mid-March. He stated they are working on this process and doing a negotiated sale with the same firm they did the negotiated sale of the original bond, there was a selection process at that time for doing that. He stated he is recommending that they would want to adopt the resolution authorizing the issuance of Sales Tax Revenue Refunding Bonds, Series 2005A and in that is documentation of at least a $3.5 million, at the present calculation, savings or nearly $4 million.
Council Member Hamerlik stated this will give the auditor and the mayor authority to move forward if those provisions are met, and that this cannot be refinanced again. The city auditor stated that you are allowed only one advance refinancing of a bond issue, and that we cannot refinance this issue again for another ten years.
The city auditor stated that if the bond market would shift enough while going through this process to bring the interest savings to less than $3.5 million, they will not proceed with this.
Council Member Hamerlik introduced the following resolution and moved its adoption: Document No. 8621 - Resolution.
The motion for the adoption of the foregoing resolution was duly seconded by Council Member Brooks and upon vote being taken thereon, the following voted in favor: Council Members Brooks, Hamerlik, Gershman, Christensen, Kerian, Kreun - 6; and the following voted against the same: none; whereupon the resolution was declared duly passed and adopted, and was signed by the Mayor and attested by the City Auditor.
ADJOURN
It was moved by Council Member Gershman and seconded by Council Member Brooks that we adjourn. Carried 6 votes affirmative.
Respectfully submitted,
John M. Schmisek
City Auditor
Approved:
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Michael R. Brown, Mayor