HomeMy WebLinkAbout1972-03-27
I
244
Bozeman, MontanH
27 Narch 1972
HINUTES OF THE SPECIAL HEETTNG OF TI-lE CITY COMMISSION
The Commission of the City of Bozeman met in Special Session pursuant to Call by the
Acting City Manager in the Commission Room, Municipal Building, 27 March 1972, at 9:00 o'clock
A.M. Pregent were Mayor Grabow, Commissioner Sedivy, Commissioner Lehrkind, Commissioner Vand-
eventer, Commissioner Vollmer, Acting City Manager Keyes and theClerk.
Co~r:-~s i~~~.9 t Lsm_2 f_~r0p~'l2ls_t:...o-,,~e fi n~~<2~_ Sa~l~a-EL_"S,e~er Bon1_~s.. s u~:
The Acting City Manager explained that this Special Meeting was called for the purpose of
consideration of proposals to refinance the Sanitary Sewer Bond Issue.
Mr. Ken Dawkins representing Dain, Kalman & Quail of Minneapolis and Mr. Bernard T. Tierney,
Financial Advisor for Tierney & Company, Denver, Colorado and representing E. F. Hutton & Company
of Boulder, Colorado, again appeared before the Commission to present a joint proposal of the
brokerage houses of Dain, Kalman & Quail, Inc., of Minneapolis, and E. F. Hutton & Company of
Denver, Colorado, concerning the refinancing of the 1969 Sewerage Revenue Bonds as follows:
The principal of said Outstanding Bonds is payable serially in numerical order,
annually, in various amounts on July 1, 1972, through and including July 1, 1980.
Said Outstanding Bonds bear interest at an average rate of 6'10 per annum, which
interest cost amounts to $5~3,945.80 from 12 April 1972 through and including
1 July, 1980.
He have completed a detailed investigation oj said Outstanding Bonds. In our
opinion, said Outstanding Bonds may be refu~d at this time, effecting a re-
duction in total dollars of interest paid by the City over the remaining life
of the Bonds. Such refunding may be accomplished through the purchase of
United States Obligations with the proceeds of the Refunding Bonds, plus the
accrued principal and interest on the municipal bonds from their last interest
payment date to the date of settlement, and a cash contribution of $l35,000.
Such United States Obligations being placed in an irrevocable refunding
escrm\T trust according to a predetermined schedule in amounts sufficient to
pay all the principal of and interest plus premium on the outstanding Bonds.
He are pleased to submit our offer to act as your Financial Gonsultant in
attempting to accomplish this refunding on or before April 12, 1972. From
our investigation, we anticipate a minimum net savings in dollars of principal
and/or interest on the Outstanding Bonds of $110,294.31, if schedule B is used.
(1) Schedule B is bases upon the City receiving a Moody's A rating on the
new refunding bonds dated ~pri1 l2, 1972. If the City receives a Moody's A
rating on the new refunding bonds dated April 12, 1972, then the minimum net
savings in dollars of principal and/or interest on the Outstanding Bonds will
be $9(~,376.6(f, as shown in Schedule C. This net savings is net to the City
after payment of all expenses incidental to the refunding including legal,
Certified Puhlic Accountants' fees, and our fiscal fee.
I
It is understood that the new refunding issue will mature and bear interest
in amounts that will not exceed $133,500 per year, except in the year 1980,
\\Thich ts explained in Schedule A.
Because time is of essence we will provide the City with three (3) seperate
Certified Accountants' reports rcgarding the verificati.on of our figl1rc~s.
The [i.rst report \>!J_ll verify that the income from the Government Obligations
is sufficient to pay the principal, interest and premium on the old issue and
n~tirc the issue on July l, 1980. The second report \Jill compare the prin-
cipal and interest payments on the old issue and the new issue and certify the
savings to the City. The third report \'1i11 conform to the Treasury Ruling
7072 regard ins the use of funds and the maxin'ur.1 arbi trage of .50.
(2) This proposal is subject to the unqualified approving opinion of
Messrs. Dorsey, Marquart, Windhorst, West & Halladay of Minneapolis, Minn-
esota as to the legality of the refunding bonds and the escrow account.
Upon the successful refunding of said Bonds, resulting in a savings to you
equal to or greater than that stated in this contract, you agree that for said
services on our part you are to pay us a fee of $l.80 for each $1,000 in
bonds :Lssuec1.
I
However, it is understood that you are under no financial obligation to us if
we are unable to accomplish the refunding by April 26, 1972, and any expenses
incurred by us in attempting to effect said refunding are solely our re-
sponsibility.
Following a discussion and a question and answer period, it was moved, seconded and carried
that the Commission go into an executive recess for a period of thirty minutes to further discuss
the proposal.
Acting City Attorney Mike O'Connell was telephoned in reference to the legal aspects of the
I
I
I
proposal. The Acting City Attorney advised the Commission that there were no legal ramifications
in connection with the proposal and recommended accepting the proposal.
The Commission concurred with the recommendation of the Acting City Attorney, also concurred
in by the Acting City Manager and it was moved by Commissioner Vandeventer, seconded by Commissioner
Vollmer, that they enter into the joint proposal of the brokerage houses of Dain, Kalman & Quail, Inc.,
of Minneapolis and E. F. Hutton & Company of Denver incorporating the following recommendations
made by the Mayor and the Acting City Manager.
l. That we have the ability to call bonds and the ability to issue add-
itional bonds if properly authorized by the public.
2. That Tierneys fee for services rendered in the amount of $l.80 for
each $1,000.00 in Bond issued will be paid by Dain, Kalman & Quail
c and E. F. Hutton & Company.
The Mayor and the Clerk of the Commission were instructed and directed to sign the proposal
for the City of Bozeman. The motion was carried by the following Aye and No vote: those voting
Aye being Commissioner Vandeventer, Commissioner Vollmer, Commissioner Sedivy and Commissioner
Lehrkind and Mayor Grabow; those voting No, none.
It was moved by Commissioner Vollmer, seconded by Commissioner Sedivy, that they thank Mr.
Bernard T, Tierney and Mr. Ken Dawkin for figuring and preparing the proposal and the chance to
make it possible to refinance the 1969 Sewerage Revenue Bonds. The motion was carried by the
following Aye and No vote: those voting Aye being Commissioner Vollmer, Commissioner Sedivy,
Commissioner Lehrkind, Commisssioner Vandeventer and Mayor Grabow; those voting No, none.
Adj~()~!!)men t_;..
There being no further business to come before the Commission at this time, it was moved by
Commissioner Sedivy, seconded by Commissioner Lehrkind, that the meeting be adjourned and the motion
was carried by the following Aye and No vote: those voting Aye being Commissioner Sedivy, Comm-
issioner Lehrkind, Commissioner Vandeventer, Commissioner Vollmer and Mayor Grabow; those voting
,
No, none.
)-
ATTEST:
245