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HomeMy WebLinkAbout1985-10-31 Minutes356 MINUTES OF A SPECIAL MEETING OF BOARD OF DIRECTORS 356.1 A special meeting of the Fayetteville Board of Directors was called on Thursday, October 31 at 11:30 A.M. for the purpose of considering the authorization of the issuance of Solid Waste Revenue bonds. The meeting was held in Room 326 of City Hall, 113 West Mountain Street. PRESENT: Mayor Noland; Directors Bumpass, Hess, Johnson, Lancaster, Martin and Orton; City Manager Grimes, City Attorney McCord, Finance Director Linebaugh, City Clerk Kennedy;. members of the Resource Recovery Authority, members of the press and others 356.2 The meeting was called to order by Mayor Noland at 11:35 A.M., with seven Directors present. 356.3 The Mayor stated the purpose of the meeting was to consider a resolution to be read by the City Attorney. The City Attorney explained the resolution was in response to a recommendation from the city Finance Director that the Board of Directors consider approving the issuance of Solid Waste Tax -Exempt Revenue Bonds by the Solid Waste Authority, to preserve the option of tax-exempt financing in the event the Board of Directors decides to go forward with the solid waste resource recovery project. 356.4 The City Attorney read the following resolution: A RESOLUTION APPROVING THE ISSUANCE AND SALE OF UP TO $22,405,000 IN TAX EXEMPT SOLID WASTE MANAGEMENT REVENUE BONDS, SERIES 1985, BY THE NORTHWEST ARKANSAS RESOURCE RECOVERY AUTHORITY. WHEREAS, the City of Fayetteville, Arkansas (the "City") is a member of the Northwest Arkansas Resource Recovery Authority (the "Authority"); and WHEREAS, the Authority has proposed that a Solid Waste Resource Recovery Facility (the "Facility") be constructed within the City to provide the citizens of Washington County a safe, sanitary and environmentally desirable means for the disposal of solid waste; and WHEREAS, the Authority has proposed that the Facility be owned by the Authority and be operated by private enterprise; and WHEREAS, the Board of Directors has been considering the Authority's proposal and other alternatives for the construction and operation of a Solid Waste Resource Recovery Facility; and October 31, 1985 WHEREAS, the Board of Directors supports construction of a Solid Waste Resource Recovery Facility but has withheld approval of such a project to study the impact various alternat,ives would have on the level of required tipping fees; and WHEREAS, under existing law the Authority can issue tax exempt bonds to finance construction of a Solid Waste Resource Recovery Facility which is publicly owned and privately operated or which is privately owned; and WHEREAS, the House Ways and Means Committee is, considering a tax reform proposal under which tax exempt bonds could not be issued to finance the construction of a solid waste resource recovery unless the Facility is both owned and operated by a public entity; and WHEREAS, the loss of tax exempt financing for a Solid Waste Resource Recovery facility would require a substantial increase in tipping fees to offset the higher interest rate taxable bonds would bear; and WHEREAS, the option of tax exempt financing can be preserved while the Board of Directors considers various alternatives for construction and operation of a Solid Waste Resource Recovery Facility, if solid waste management revenue bonds are sold before January 1, 1986. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the .Board of Directors hereby approves the issuance and sale by the Authority of up to $22,405,000 in Solid Waste Management Revenue Bonds, Series 1985. PASSED AND APPROVED this 31st day of October, 1985. Director Johnson, seconded by Orton, made a motion to approve the resolution. Mayor Noland commented that the only action being taken by the Board as a result of passage of the resolution would be the preservation of the option to finance the project, if it goes forward, with tax-exempt bonds. Director Bumpass asked what the costs would be to issue the bonds. The City Attorney explained that costs would be standard and would include the underwriter's discount, bond counsel fees, and printing costs. McCord added that the financing would be structured so that, if a decision is made not to proceed with the project, all costs should be. recouped from arbitrage earnings, although there is no "absolute guarantee" that all costs would be recouped. Finance Director Linebaugh noted that bond insurance would not be required in this case. Charles Crow; representing Stephens, 357.1 357.2 357.3 35:8° N • October 31, 1985 358.1 Inc., estimated total issuance expenses to be approximately between $600;000 and $800,000 but he pointed out that the exact_ figure would not be known until the interest rate is known and until it is known what financing structure will be accepted by bond counsel. 'In answer to a question from Bumpass, Crow explained the expenses would come out of bond proceeds. Director Bumpass asked how long it would take to recover'the issuance costs. Crow estimated a substantial. portion of those costs should be recovered in about a year's time. 358.2 The City Attorney pointed out that, if the city does not preserve its option under existing law, one adverse impact from the proposed tax reform proposal would be that (even'if the facility were'publicly owned and operated) if the energy produced is sold to a private entity and that entity purchases more than 5% (or more than 1%' as proposed by the President), the bonds lose their tax-exempt status. 358.3 The Mayor asked if anyone in the audience wished to comment. A resident along Fox Hunter Road commented that, should the Board decide to change the location of the facility from Razorback Road to the site of the Wastewater Treatment Plant, he and other residents along Fox Hunter Road are concerned about there being "a continuous procession of trucks" if Fox Hunter Road is used as the access road to the facility. He remarked that Fox Hunter Road in its present condition is not adequate for truck traffic, and is not a very good route for building the Wastewater Treatment Plant. He added that he didn't think the residents along Fox Hunter Road would be willing to sell their property to widen the road, and he commented that he and• other residents want to preserve the type of road they now have. The Board was urged by this resident to consider a more direct access to the facility. In reply to the Mayor, the resident stated Wyman Road was really a more direct access road but that it could not handle the weight of the trucks. 358.4 Director Orton remarked that the. Razorback Road site for the new facility was an ideal location for access, and that the alternative site is negative by comparison, and is a problem that the Board will have to face. 358.5 Their being no additional comments, the resolution passed by,a vote of 5-1-1, with Director Bumpass voting "no" and Director Martin abstaining. RESOLUTION NO. 115-85 APPEARS ON PAGE BOOK XXIII 39 OF ORDINANCE & RESOLUTION ADJOURNMENT 358.6 With no further business being considered by the Board, the meeting was adjourned at about 11:50 A.M. •