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041603 CC SP Miin . . . . CITY OF SHOREWOOD CITY COUNCIL SPECIAL MEETING WEDNESDAY, APRIL 16, 2003 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 5:30 p.m. MINUTES 1. CONVENE SPECIAL CITY COUNCIL MEETING Mayor Love called the Meeting to order at 5:45 P.M. A. Roll Call Present: Mayor Love, Councilmembers Lizee, Turgeon, and Zerby; Administrator Dawson; Finance Director Burton; and City Attorney Tim Keane Absent: Councilmember Garfunkel (due to illness) B. Review Agenda Mayor Love requested a Litigation Report from Attorney Keane be added to the Agenda. Without objection, Mayor Love proceeded with the Agenda this evening, as amended. 2. LITIGATION REPORT Attorney Keane provided Council with a brief update on the outcome of the Shorewood Yacht Club (SYC) legal case, stating that the SYC entered a guilty plea. In addition to coming into compliance with the ordinance, SYC will be under a one-year probation period, they will make application for Zoning Text and CUP Amendments, and must pay all City Attorney fees encumbered in this case. Mr. Keane thanked Mayor Love, Administrator Dawson and Planning Director Nielsen for their availability in preparing for this case. Mayor Love also thanked the Council for its concurrence on this issue. 3. APPROVE AMENDMENTS TO LEASE AND SUBLEASES FOR THE EFD WEST/ SLMPD STATION Administrator Dawson introduced Financial Advisor Paul Donna of Northland Securities, and Bond Counsel Steve Bubul, of Kennedy and Graven. He stated Mr. Donna will report on results of the Bond sale and Mr. Bubul will review the actions required of the documents being considered this evening. Administrator Dawson indicated the Bonds need to be closed within the next two weeks. Mr. Donna reviewed the financial documents, which included the final proposed interest rates. He noted the term date of the 2003 Bonds of February 2023, the same term date as the 2002 Bonds. He stating the overall average coupon is at 4.68%. He indicated that last fall the overall coupon on the same term issue was at 5.15%, noting the interest cost has been substantially improved. Councilmember Zerby asked how much of an overall savings this provided. CITY COUNCIL SPECIAL MEETING APRIL 16,2003 PAGE20F4 . Mr. Donna indicated overall, last fall, the total interest cost projection was $7,997,106. The actual total interest cost now, combining the 2002 and 2003 Bonds, is $7,972,141, an interest savings over the life of the project of $24,965. Councilmember Zerby questioned the total savings to the City; indicating he thought there would be some additional financial benefit to the City for being the conduit for this project. He recalled that the City was to hold the money for a certain amount of time, anticipating some additional interest earnings. He referred to the $84,000 anticipated interest earnings being reduced to $40,000, and questioned the impact this reduction would have to the City. Administrator Dawson stated that the anticipated earnings and savings are all part of the entire project costs, and said the benefit to the City in using the Economic Development Authority (EDA) as the agent to get the project done was in the ability to complete the project with a special levy, which is outside levy limits. He indicated that all cities would benefit from the $24,965 interest savings, just as all cities will share in any projected interest earnings. The City does not benefit beyond this. Mr. Donna completed his review of additional financial documents provided. The Council had no further questions for Mr. Donna. Mr. Steve Bubul of Kennedy and Graven reviewed and explained the documents being considered for approval by the Council this evening. . Mr. Bubul stated the actions to be taken this evening included approval of supplemental documents to issue the Bonds. He indicated two series of Bonds were sold last fall under one Bond Indenture. The first document being considered for approval this evening is the Supplemental Indenture Trust, which specifies the terms of the Bonds, and is in place to tell the Trustees what to do and to protect the Bondholders. Mr. Bubul indicated these Bonds contain an additional feature, known as a Call for Unencumbered Funds. He stated that in addition to the regular optional call, the Call for Unencumbered Funds includes a provision for any money remaining upon completion of the project, in either the police or fire project funds, could be used to call that portion of Bonds which can be paid for with the remaining funds. This option can be exercised only on July 1, 2004. This applies only to the 2003 Bonds, not the 2002 Bonds, and the Bonds would be retired as directed by the EDA. This is a benefit to all parties involved. Mr. Bubul proceeded to summarize the additional amendments being considered for approval this evening, including the Supplemental Assignment and Security Agreement, First Amendment to Ground Lease (West Side), First Amendment to Lease Purchase Agreement (West Side Fire Facilities), First Amendment to Lease Purchase Agreement (West Side Police Facilities), Continuing Disclosure Certificates, Series 2003A, and Continuing Disclosure Certificate, Series 2003B. . Mr. Bubul also reviewed the document that states the City is subleasing to the Fire and Police Districts, and noted that this document is not in need of any amendments, as the Districts have consented to this amendment. He reviewed the Continuing Disclosure Certificates for the 2002 and 2003 Bonds. He noted the City is the first lessee, and along with the Police and Fire . . . CITY COUNCIL SPECIAL MEETING APRIL 16, 2003 PAGE30F4 Districts, this document states that an annual financial report must be filed, as required by the Federal Securities Law. Mr. Bubul indicated all of these documents are standard transactions. Mr. Bubul stated there is one Resolution for consideration this evening, which approves all of the documents reviewed. Councilmember Zerby asked if the other cities approved these amendments. Mr. Bubul stated that the individual member cities did not need to approve these amendments, as the member cities are covered by the Joint Powers Agreements. He stated that the Fire and Police Districts did approve the amendments. He further explained the only reason the City is in this transaction is because in the last set of Bond issues, there was an attempt to get Bond insurance and the Bond insurer wanted the City in the lease transaction. The Bond insurer was familiar with the City's name and not as familiar with, or understanding of, the Joint Powers Districts; therefore, was more comfortable with the City of Shorewood's name being of value to, and a part of, this transaction. Mr. Zerby asked, upon completion of the building construction, who owns the building. Mr. Bubul indicated the building is actually owned by the EDA. Mr. Zerby asked whom the Police and Fire Districts would write the rent payment to. Administrator Dawson indicated the payment would be written to the City of Shorewood, as the lessee. The EDA is leasing the building to the City of Shorewood. In the end, the City may purchase the building, although under their subleases give the Police and Fire Districts the opportunity to purchase the building. Councilmember Zerby asked if there were any issues with the way these documents are set-up that would prohibit the possibility of future consolidations, such as if the Police and Fire Districts were to become one unit. Mr. Bubul indicated that these issues could be addressed, should the need arise. Council had no further questions for Mr. Bubu!. Zerby Moved, Turgeon seconded Adopting RESOLUTION NO. 03-033 Approving Agreements to the Financing of Certain Fire and Police Facilities. Motion passed 4/0. 4. OTHER BUSINESS Councilmember Lizee reported on an upcoming meeting that she and Engineer Brown have scheduled with TUSA to discuss the possibility of their volunteer involvement with the Eddy Station concessions this year. Upon question of Councilmember Zerby, she noted that the Adult Softball was contacted and given the same opportunity; however, they did not respond. Mayor Love reported that he met with Deephaven Councilmember Paul Skrede and the City of Deephaven Administrator about the possibility of getting water to the East-Side Fire Station. He indicated that the City of Deephaven talked about the possibility of putting water in, and that . . . CITY COUNCIL SPECIAL MEETING APRIL 16, 2003 PAGE40F4 Deephaven Administrator Dana Young would be contacting Administrator Dawson to discuss this issue further. Mayor Love indicated that Engineer Brown could report on this issue at the next Council meeting. 5. ADJOURN Lizee moved, Turgeon seconded, adjourning the Special Council Meeting of April 16, 2003, at 6:18 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, Jean Panchyshyn Recording Secretary ATTEST: