HomeMy WebLinkAbout2010-11-01 City Council Continued Minutes Approved (2) b�2 Y 0
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City Council Minutes— November 9, 2010
At 2:00 p.m. Deputy Clerk-Treasurer Philip Steffen called the continued meeting of November 1, 2010 to
order for the purpose of authorizing by ordinance Issuance of Utility System Improvement Revenue
Bonds for the Water Treatment Plant project. Because the bonds could not be issued no council
members attended the meeting and Mr. Steffen, in accordance with RCW 42.30.090, adjourned the
meeting to Wednesday, November 10, 2010 at 2:00 p.m. in the City Council Subcommittee Room for the
same purpose.
City Council Minutes—November 10, 2010
At 2:01 p.m. Mayor Pro-Tem Brad Adams called the continued meeting of November 1, 2010 to order for
the purpose of authorizing by ordinance Issuance of Utility System Improvement Revenue Bonds for the
Water Treatment Plant project. Roll call found present: Cynthia Richardson, Brad Adams, Erica Pickett,
Brian Geer and Nick Petrish. Kevin McKeown joined the meeting via teleconference. Bill Turner was
absent. Mayor Dean Maxwell, Finance Director Steve Hoglund, financial advisor Susan Musselman of
DashenMusselman, Inc. and bond underwriter Jane Towery of Piper Jaffray also joined the meeting via
teleconference. Also present were Emily Schuh, Art Shotwell, Philip Steffen and bond counsel Alice
Ostdiek of Foster Pepper.
Susan Musselman updated Council on the recent rating agency visits from Standard & Poor's and
Moody's. She said the City received a strong AA- rating from Standard & Poor's and that Moody's
affirmed the strong Al rating it had previously assigned. Ms. Musselman asked Council to consider
passing the bond ordinance before them authorizing a $44,300,000 bond issue. She explained that this
amount would yield $40M of project funds for the water treatment plant project in addition to$3.9M for the
debt service reserve fund and a small amount to cover the costs of bond issuance. In her capacity as
financial adviser, Ms. Musselman stated she was present for the bond pricing and recommended that
Council adopt the ordinance authorizing the mayor to accept Piper Jaffray's bond purchase offer.
Jane Towery reported that the bond pricing got an early start yesterday and today accepted offers from
investors across the country, all of whom were very comfortable with the City's credit and recognized it as
strong. Ms. Towery explained that the interest rates in the ordinance are taxable rates but that because
the bonds are Build America Bonds the City will receive a 35% subsidy for the interest from the federal
government so the effective cost is lower. She said the rates in the ordinance will yield a 3.63% effective
borrowing cost of capital for a 20-year term which is a historic low. She clarified that the entire bond
offering will be Build America Bonds. She said the ordinance authorizes the mayor to sign the offer from
Piper Jaffray to buy the bonds from the City. She added that not all the bonds are sold so Piper Jaffray is
taking some risk. Mr. Adams asked for clarification. Ms. Towery and Mayor Maxwell explained that once
the purchase agreement is signed Piper Jaffray agrees to buy all the bonds from the City and then resells
any that are not already sold.
Alice Ostdiek stated that the ordinance contains all the bond covenants and the debt service reserve
language and authorizes the mayor to sign the bond purchase agreement. In her capacity as the City's
bond counsel, she said Foster Pepper recommended adopting the ordinance.
Mrs. Richardson moved, seconded by Mr. Geer, to approve Ordinance 2842 providing for the issuance
of Utility System Improvement Revenue Bonds for the water treatment plant project and approving the
sale of the bonds to Piper Jaffray. Vote: Ayes— Richardson, Adams, Pickett, Geer, Petrish and McKeown.
Motion carried.
There being no further business, at approximately 2:11 p.m. the continued City Council meeting of
November 1, 2010 was adjourned.
Anacortes City Council Minutes November 9-10, 2010 1