05-27-2014 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL Tuesday, May 27, 2014 7:00 o’clock p.m. _____________________________________________________________________________________ Page 3 of 23 APPROVAL OF AGENDA CONSENT AGENDA Item Nos. 9, 10, 13, 14, 15, and 16 were added to the Consent Agenda. Levang moved, Bremer seconded, to approve the Consent Agenda as amended. VOTE: Ayes 5, Nays 0. APPROVAL OF MINUTES *3. REGULAR CITY COUNCIL MEETING OF MAY 12, 2014 Levang moved, Bremer seconded, to approve the minutes of the Orono City Council meeting of May 12, 2014, as submitted. VOTE: Ayes 5, Nays 0. SALE OF BONDS 4. SALE OF GENERAL OBLIGATION BONDS SERIES 2014A – RESOLUTION NO. 6405 Nick Anhut, Ehlers & Associates, stated the City of Orono has maintained its Moody’s AAA rating. Anhut stated he would like to highlight various points from the report prepared by Ehlers. Moody’s remains positive about the economic strengths of the City given its ample general fund and reserves for its capital planning process as well as being proactive in its conservative fiscal management and overall financial policies. Anhut stated one of the challenges mentioned by Moody’s as far as the rating is concerned is that the City as a whole is relatively smaller than other like rated entities. The AAA rating is the highest rating that can be attained worldwide and Moody’s recognizes that there may be some potential burdens with having a small population. Moody’s also recognizes there have been some recent housing declines but that there have been some positive indicators that are now on the mend. Anhut noted Ehlers, on behalf of the City, went to market this morning on the sale of general obligation bonds for the financing of the City’s public safety addition, various water improvements, and refinancing of Big Island. Given the City’s AAA rating, five bids were received this morning and the winning bid was from Raymond James & Associates out of New York with a 2.27 percent interest rate. The bid is approximately one-half a percentage point below what was anticipated, which will amount to some significant savings for the City. Anhut noted he did discuss with the City Council previously that Ehlers was expecting premium bids on the bonds, which were received. With that premium bid, Ehlers was able to downsize the issuance of the bonds by $105,000, resulting in a total bond sale of $5.275. The underwriter’s discount also came in below budget and the costs of issuance came in at what was projected. Given those factors, the City is looking at a total principal and interest savings of approximately $200,000 over 14.5 years.