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HomeMy WebLinkAboutEDA MIN 08-27-07 Special ECONOMIC DEVELOPMENT AUTHORITY (EDA) SPECIAL MEETING MINUTES August 27, 2007 CALL TO ORDERIROLL CALL President, Gary L. Peterson called the meeting to order at 6:30 p.m. Present: Gary L. Peterson, Bruce Nawrocki, Tammera Diehm, Marlaine Szurek and Bruce Kelzenberg. Williams arrived at 6:44pm. Absent: Patricia Jindra PLEDGE OF ALLEGIANCE BUSINESS ITEMS Adopt Resolution 2007-20. Awardina the Sale of Public Facilitv Lease Revenue Bonds. Series 2007B Walt Fehst stated the bids were opened this morning and would like to turn this over to Mark Ruff. Mark Ruff, Ehlers & Associates passed out one more document to the board which contained: 1) results of the bids, 2) the Moody's Investors Service report for the bond issue; 3) payment schedules based on the bids and 4) is an overview of the market and how this bond issue compares to the market. The lowest bid was from Stifel, Nicolaus with a true interest rate, which combines the coupon rates and the fees at a 4.9589 percent. The second bid was from Northland Securities with 20 basis points or less than a quarter percent higher. We are very happy with the rate we received from Stifel, Nicolaus, which was based on a Moody's rating of 83 and is the rating we expected. It is just two notches below our cities general obligation A-1 rating. This is typical for something that is not a City Hall or a Public Works Facility. These are 20-year bonds. Fehst stated if you look the 4.959, compared to 4.96, we are less than three one hundreds percent or eleven ten thousands percent off of what the average is for a G. O. bond throughout the country. Ruff stated that is correct. Nawrocki asked if they only received the two bids. Ruff stated that was correct. Nawrocki stated he looked over the preliminary official statements sent out previously to him. The one for the Liquor Store he found interesting as they indicated we had revenues in 2005 of $367,000 profits, 2006 we had $380,000 and on the document for the million dollar issue you indicate the profitability for 2005 was $222,000 and 2006 it was $224,000. On the statement from the audit conducted for 2006 it indicates profits of $202, 000 and 2005 of $200, 000. Where are you getting all of these different profit numbers? Ruff stated he wasn't sure which numbers Mr. Nawrocki was referring to that vary substantially. The purposes in the two different official statements was in an effort to say, if the Liquor Stores didn't lease property, how much money would be available to pay debt service. Economic Development Authority Special Meeting Minutes August 27, 2007 Page 2 of2 Motion by Diehm, second by Williams, to Adopt Resolution 2007-20, a Resolution Awarding the Sale of $5,040,000 in Public Facility Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores Project), and its related documents; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. Andrew Pratt, Kennedy & Graven stated one of the major aspects of the Lease Purchase Agreement is that the EDA will be leasing the land and the facility to the City. The City would pay lease payments on it, which would intern be used to pay the debt service off. Section 5.6 of the Lease Purchase Agreement, talks about the Cities powers in any fiscal year not appropriating funds to pay the lease. In case that ever does happen, in section 3.02 references that the authority would have to find another tenant to payoff the bonds. That is one of the risks of the lease revenue bond. In this case we have the trustee being the EDA. Nawrocki stated in the debt service schedule you aren't paying anything but principal the 1st so many years and farther down the road we will end up making payments that will far exceed our expectations. Therefore, he wanted the record to show he would not be voting in favor of this item. Upon Vote: Williams-aye, Nawrocki-Nay, Kelzenberg-aye, Diehm-aye, Szurek-aye, Peterson-aye. Motion Carried. Peterson stated he received word today that Commissioner Jindra will be resigning from the EDA due to health issues. We wish her well. As board members he wanted everyone to think if they new of anyone they think would be a good candidate to fill her position and bring to bring that persons name to the meeting tomorrow night. ADJOURNMENT President, Peterson, adjourned the meeting at 6:58 p.m. Respectfully submitted, A'", //'~ L-.f~ ~ Cheryl Bakken Community Development Secretary H:\EDAminutes2007\8-27-2007 Special Mtg