HomeMy WebLinkAbout1985-05-13 MinutesMINUTES OF A SPECIAL MEETING OF THE BOARD OF DIRECTORS
A special meeting of the Fayetteville City Board of Directors was
held on Monday, May 13, 1985 in Room 326 of City Hall, 113 West Mountain
Street, Fayetteville, Arkansas.
PRESENT:
ABSENT:
Mayor Noland; Directors Bumpass, Hess, Johnson and
Orton; City Manager Grimes, City Attorney McCord,' City
Clerk Kennedy; members of the press and others
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Directors Lancaster and Martin
The meeting was called 'to order at 42:10 P.M. by Mayor Noland, with
,five Directors present.
WASTEWATER TREATMENT PLANT IMPROVEMENT REVENUE BONDS.
MayorNoland explained that the special meeting was called to consider
a recommendation from the Local Bank Committee regarding marketing
of the improvement revenue bonds for the City's Wastewater Treatment
Plant and Sewage System.
City Attorney McCord reported that a meeting was held, last week with
bond attorneys and financial consultants regarding the best procedure
to get the bonds marketed. -
Bill Gould, member of the Local Bank Committee, presented the recommen-
dation of that committee, which serves as financial .consultant for
marketing of revenue bonds to finance improvement to the City's,Wastewater
Treatment Plant, and Sewage System. Gould, reported that the committee
now recommends a negotiated underwriting sale (rather than a public
sale) for the following reasons:
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The expertise of John Lewis is- 'no longer available as his
association with First National -Bank terminated upon the
recent sale of the Bank;
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A negotiated underwriting will provide the city with:
a.'. .More•flexibility.on daily pricing
in the marketplace which:might
'are sold at public sale;
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More flexibility in structuring
potential purchasers; and
c. A net effective interest rate
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Sb.
to avoid minor distortions
be . present --if the, bonds
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the bond issue'to attract
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equal to or lower than
that which could be obtained at a public sale.
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May 13, 1985
Gould commented that the committee believes the proper selection process
will cause a lesser net cost to the city than a public sale because
of the speed involved. In answer to a question from Mayor Noland,
Gould stated that the intention is to proceed with Requests for Proposals
from major bonding companies In Arkansas. McCord explained that the
Requests for Proposals are currently being drafted by the bond attorneys,
should be in the mall by May 15 and that the proposals should be returned
within seven days. McCord explained that the bank committee would
review the proposals, determine whether to have any oral interviews,
and make a recommendation.
Gould added that the committee is also recommending that its existing
contract with the city, which provided for a $10,000 fee, be rescinded.
Director Hess asked if the proposal to pursue negotiated underwriting
had been taken into consideration when the committee made its initial
recommendation under John Lewis. Gould explained that the committee
felt at that time that part of the cost of the expertise would have
been handled by Lewis.
Hess asked who would be allowed to submit proposals. McCord explained
that Requests for Proposals would be sent to "the leading investment
banking firms who handle tax-exempt municipal financing", such as
Stephens, A. G. Edwards, Merrill—Lynch, and E. F. Hutton.
McCord added that part of the Request for Proposals will be to ask
the underwriter to outline a proposed financing structure.
In answer to Director Hess, McCord responded that the committee would
bring a recommendation before the Board of Directors as to which firm
they feel would be most suitable. McCord added that, before a bond
purchase agreement is actually executed, the underwriter would have
to justify the discount and the proposed interest rate.
In answer to a question from Director Bumpass, Gould explained that
the Local Bank Committee is working on a volunteer basis at this time.
It was confirmed, in response to a question from Bumpass, that the
city's professional selection procedure would be followed.
Director Bumpass, seconded by Johnson, made a motion to rescind the
existing contract with the Local Bank Committee, to establish an Advisory
Committee consisting of representatives from Mcllroy Bank and Trust,
Northwest National Bank, First National Bank of Fayetteville, and
City Finance Director Scott Linebaugh, to provide the Board with infor—
mation regarding a recommendation of a firm to provide negotiated
underwriting for the sale of the sewer improvement bonds. Upon roll
call, the motion passed, 5-0, with Directors Lancaster and Martin
absent.
With no further business before the Board, the meeting adjourned at
about 12:20 P.M.
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