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HomeMy WebLinkAboutM021511S District No.1 Commissioner: Phil.Johnson District No.2 Commissioner: David W. Sullivan District No.3 Commissioner: .John Austin COllnty Administrator: Philip Morley Clerk of the Board: Lorna Delaney MINUTES Special Meeting February 15,2011 Chairman John Austin called the mecting to order at the appointed time in the presence of Commissioner David Sullivan and Commissioner Phil Johnson. Proposed Resolution re: Authorization of the Issuance of a Bond for E9J / and the Tri Area UGA Wastewater Projects: County Administrator, Philip Morley, introduced Treasurer Judi Morris; James Nelson, Underwriter representing Martin "lelson & Company, and :\1arc Greenough and Lindsay Fisher, Bond Counsel representing Foster Pepper, PLLC. The purpose ol'this special meeting is for the Board to considcr and take action a resolution to authorize the issuance of a bond. Judi Morris thanked Jim Kelson for his help over the past year on this issue and helping prepare for the rating call with Standard and Poors. Jim Nelson then reported that the County rcceivcd a Standard and Poors underlying rating gradc of AA- which is the fourth highest rating gradc in the multi-tiered grading system. lin this interest rate/bond market, the focus that has changed thc last fcw years is to look at the stand alone underlying rating grade instead of going with the traditional stamp of approval with the bond insurance company. Thc bonds in the market currently that havc high underlying rating grades like Jefferson County can achieve a low borrO\ving cost. The market is a little "skiddish" right now and thc real focus is on high quality bonds. Thcsc arc 20 ycar bonds and the County's net borrowing cost with fees would be 4.34%. These bond will providc the County funding in the amount of $880,000 for a portion of the 911 Dispatch Ccntcr and also $2.2 million for sewer design and land acquisition. Payment datcs for thesc bonds will be June I and December I with the last principal payment date of December I, 2030. The bonds become "callable" and payable in the 10'h year or Dccember 1, 2020. After the 10'h year the County can call in the bonds early if funding becomes available and there is no pre-payment penalty. Before the lOth year there is no pre-payment penaJty and if you had additional funds to put into paying the bonds you would kccp it in a separate fund and pay it in the 10'" year, Mr. Nelson then explained the rating system and how it impacts the nct borrowing costs for the County. The key factors that impact the rating are: the strong financial policies of the County including the reserve policy; the County's financial performance (sales tax collections, ending fund balance); the grovv1h in the County's assessed valuation; the low debt level of thc County; and the experienced management of the County and operating in a very cflicient manner, He thanked and commended Judi Morris, Philip Morley, Anne Scars and Al Scalf who participated in the rating conference call. He then reviewcd information about the bond market in general, the debt service schedule for these bonds, and the yields on the bonds at the AA- rating. He then explained that the bond resolution includes a contract to purchase the bonds by Martin, Nelson and Company. Page I Commissioners Meeting Minutes: Week of February ] 5,20]] /~~ .!.It"\ , i:~~~~:' ",,,~17 Commissioner Johnson asked why there is no prepayment allowed for the first] 0 years? Mr. Nelson explained that it is standard in the industry that investors/bond holders expect to have the first 10 years with no prepayment option. If you were to add a prepayment option it would increase the interest rate. It would increase the net borro'hing costs which would not make it cost effective for the County. Marc Grccnough, Foster Pepper, explained that the bond resolution that authorizcs the issuance of the bonds and authorizes the execution of the contract 'hith Martin Nelson & Company which is a contract with bond holders that the County promiscs to repay them. The terms of these bonds are included in thc bond resolution and are a gencral obligation of the County which means that the County promises to pay from whatever money is legally available to bondholders. It doesn't provide any extra resource to the County to rctire the bonds, like a voter approved tax levy. The resolution does specifY the uses for the bond procecds if the County decides all of the bond proceeds couldn't be used for that purpose then the Board would need to change the use by resolution. lIe then explained the uses for the bond proceeds and what IRS regulations apply. Once the rcsolution which includes the purchase and sale agreement is approved and signed, Marc Greenough explaincd, the bond transactions will close in a couple of weeks with the money being expected to move on March]. Commissioncr Sullivan moved to approve RESOLUTION NO. 07-11 relating to contracting indebtedness; providing for the issuance of$3,150,000 par value of Limited Tax General Obligation Bonds, 2011, of the County for general County purposes to provide funds with which to pay (i) a portion of the costs of constructing certain capital improvements for an emergency communications 91] Dispatch Center. (ii) a portion of thc costs of designing and purchasing land for a new wastewater treatment plant, and (iii) the costs of issuance and sale of bonds; tixing the date, form, maturities, interest rates, terms and covenants of the bonds; establishing a bond redemption fimd; and approving the sale and providing for the delivcry of bonds to Martin Nelson & Company, Inc. of Seattle, Washington. Commissioner Johnson seconded the motion which carried by a unanimous vote. NOTICE OF ADJOURNMENT: Commissioner Sullivan moved and Commissioner Johnson seconded the motion to adjourn the meeting at 11:49 a.m. until the next regularly schedulcd meeting or properly noticed special meeting. The motion carried by a unanimous vote. MEETING ADJOURNED .. JEFFERSON COUNTY BOARD OF/10MMISSIONERS \'~.r "j,~~1_ ) Jo~t1 Austin, Chair ~'il) ;/ .(-Lt.! . \. .,,-./ , so/n, Member . ? //Y' e2.~<-,;2ri:d ~ ' David Sullivan. Member SEAL: " ~ . .j. ~f ~, ~ .,0;' , ) ATTEST: ~~ifhQ~ Clerk of the Board Pagc 2