HomeMy WebLinkAboutA010 - Council Action Form dated April 9, 2002ITEM # 80 b
DATE ---ADril 9. 2002
COUNCIL ACTION FORM
SUBJECT: SALE AND ISSUANCE OF GENERAL OBLIGATION BONDS IN AN
AMOUNT NOT TO EXCEED $3,475,000 FOR ACQUISITION AND
DEVELOPMENT OF AMES QUARRY.
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In November of 2001, the citizens of Ames approved a referendum calling for the
issuance of $4,970,000 in general obligation bonds for the acquisition and
development of the Ames Quarry site.
This $3,475,000 bond issue will fund the first stage of the Ames Quarry
development project including property acquisition, initial development costs, and
bank stabilization. The remainder of the Ames Quarry project will be funded
through annual Capital Improvement bond issues as additional funding is required.
As determined during the budget process, the term of this issue will be 20 years.
Also note that the City is not requesting a rating from Standard and Poor's for this
bond issue. For some time we have had a split rating on our bond issues, with
Moody's giving our bonds their highest rating of Aaa while S & P rated the bonds at
a lower AA+. Our financial advisor Evensen Dodge believes that paying for the
lower S &P rating provides no value for the sale or interest rates on City of Ames
bonds and is recommending that we issue bonds with the Moody's rating only.
Evensen Dodge will be providing a letter explaining their opinion on this matter.
ALTERNATIVES:
1. Pass a resolution providing for the sale and issuance of General Obligation
bonds not to exceed $3,475,000.
2. Reject the bond sale resolution.
MANAGER'S RECOMMENDED ACTION:
It is the recommendation of the City Manager that the City Council adopt
Alternative #1, passing a resolution providing for the sale and issuance of General
Obligation bonds not to exceed $3,475,000.
COUNCIL ACTION: