HomeMy WebLinkAbout1986-11-06 MinutesMINUTES OF A SPECIAL MEETING OF THE CITY BOARD OF DIRECTORS
A special meeting of the Fayetteville City Board of Directors was held
on Thursday, November 6, 1986 at 4:00 p.m. in Room 326 of City Hall,
113 W. Mountain Street, Fayetteville, Arkansas.
PRESENT: Mayor Noland; Directors Lancaster, Johnson, Hess, Martin
and Orton; City Manager Grimes, City Attorney McCord,
Department Directors Burch, Coates and Linebaugh, City
Clerk Kennedy, members of the press and audience.
ABSENT: Director Bumpass
CALL TO ORDER
The Mayor called the meeting to order with six Directors present.
WATER QUALITY ACT
The Mayor said Senate Bill 1128, The Water Quality Act of 1986, is on
President's Reagan's desk. The Mayor asked if the Board wished to
encourage the President to sign this Bill.
Director Orton, seconded by Martin, made a motion to encourage the
President to sign the Bill.
Director Johnson said this Bill also includes the relinquishing of
sewer storm water drainage prevention requirements.
Upon roll call, the motion passed, 6-0, with Director Bumpass absent.
RESOLUTION NO.UDN-SoA.PPEARS ON PAGE y0 7 OF ORDINANCE & RESOLUTION
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ARTS CENTER BONDS
The Mayor explained the purpose of this meeting was to consider passage
of an Ordinance authorizing issuance of $3,770,000 in Sales Tax Capital
Improvement Bonds for the Arts Center and the execution of a Trust
Indenture with Mcllroy Bank and Trust, an Official Statement, and a
Bond Purchase Agreement with A. G. Edwards and Sons.
Les Baledge, representing The Rose Law Firm, bond counsel for this
issue, addressed the Board. Baledge explained the bonds are to be
issued pursuant to Amendment 62 to the Constitution and Act 871 of
1985. He said the ordinance would ratifythe use of the Preliminary
Official Statement used in connection with the offer and sale of the
bonds, will authorize the execution of the bond purchase agreement with
A. G. Edwards and Sons to purchase the bonds at 98% of the principal
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amount, will authorize the execution of a Trust Indenture to secure the
bonds, and will authorize the preparation of a Final Official Statement
to be delivered to the purchasers of the bonds. Baledge said the bonds
will be secured by a pledge and first lien on 20% of the City's share
of the County 1% sales tax. Baledge said the indenture would
specifically permit the City to issue subordinate lien debt in the
future if there are excess revenues from this tax that are available
which the City wants to pledge. He said, in addition, the insurer for
the bonds has agreed to relax restrictions to permit the investment of
funds held under the indenture with the local banks.
417.1 Director Johnson asked if additional amounts, shouldthey be needed for
capital improvements, can be issued under the same bonds. Baledge said
it would be possible to issue bonds secured by a subordinate lien on
the revenues, but this would require another election.
417.2 Chuck Devers, speaking for A.G. Edwards and Sons, explained the
difference between the original bond amount of $3,545,000 and the
current amount of $3,770,000 is the result of some changes in the
project budget which were called in to the firm two days ago. Devers
went over financial information which had been provided the Directors,
including a Summary Sheet, a Debt Service and Coverage report, and a
Schedule of Payments.
417.3 Devers said the bonds were rated AAA by both Moody's and Standard and
Poors Corporation. He said the bond discount is 2%, and the insurance
premium rate is .720% total debt service. He said the debt service
reserve bond is equal to 10% of the amount of the issue and reserve
bonds will be available to the city as a "rainy day account" and can in
fact be used to make the final bond payment in the final year. He said
total debt service was $7,540,174. Devers said the average interest
rate at which the bonds were sold was 6.864%.
417.4 The City Attorney read the ordinance for the first time. Director
Johnson, seconded by Orton, made a motion to suspend the rules and
place the ordinance on its second reading. Upon roll call, the motion
passed, 6-0. The ordinance was read for the second time. Director
Johnson, seconded by Orton, made a motion to further suspend the rules
and place the ordinance on its third and final reading. Upon roll
call, the motion passed, 6-0. The ordinance was read for the third
time.
417.5 Director Martin asked if the bonds were sold if the ordinance is
adopted. Devers responded that, if the ordinance is adopted, the bonds
were sold from the city's standpoint.
417.6 Upon roll call, the ordinance passed, 6-0.
ORDINANCE NO. 3224 APPEARS ON PAGE Ap OF ORDINANCE & RESOLUTION
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