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HomeMy WebLinkAbout~Master - Special Meeting of the Ames City Council 06/15/1992MINUTES OF THE SPECIAL MEETING OF THE AMES CITY COUNCIL AMES, IOWA JUNE 15, 1992 The Ames City Council met in special session at 5:05 p.m. on Monday, June 15, 1992, in the City Council Chambers in the City Hall, 515 Clark Avenue, pursuant to law with Mayor Curtis presiding and the following Council Members present: Brown, Campbell, Hertz, Hoffman, Parks, and Wirth. MARY GREELEY MEDICAL CENTER: Cal Halliburton, Chairman of the Hospital Board presented a Hospital Board Resolution to the Council which included the following statements: 1. The Board hereby confirms its intent to proceed with the financing of the acquisition and construction of the Project and the refunding of the Series 1979 Bonds and the Series 1986 Bonds during calendar year 1992. 2. The Board requests the City Council to do all things necessary to be able to proceed with the issuance of the Hospital Bonds during calendar year 1992 to accomplish such financing and further requests the City Council not to take any action that would preclude the issuance of the Hospital Bonds by the City during calendar year 1992. 3. The hospital will fund the interest rate differential and other reasonable costs associated with the change in the transaction. Mr. Halliburton stated that the Hospital is making this request prior to the closing of the City's bond sale on June 16, 1992, because if the City's bonds are sold as bank-qualified, the hospital would be prevented from selling bonds during 1992. Bob Helmick, Bond Attorney from Dorsey and Whitney, explained that bank qualified bonds are intended for use when a governing body reasonably anticipates that no more than $10,000,000 worth of bonds will be sold in one year. He said that in April, as the City prepared to sell bonds, it was understood that the hospital's expansion project was on hold, so the City's bonds were to have been the only ones sold in 1992, which allowed them to be sold as bank qualified. At the Council meeting on May 26, 1992, the Council was informed that no other bonds could be sold during 1992 if the City's bonds were sold as bank qualified. Mr. Helmick pointed out that the Council could either rescind the sale and immediately resell the bonds as non-bank qualified or go ahead with the sale while making a clear declaration that no hospital bonds will be sold this year. Wayne Burggraaff, Bond Counsel from Evensen Dodge, Inc., said that he immediately contacted Harris Bank and Trust last week as soon as he heard of the possible change in the bond sale to discuss with them the possibility of rescinding the sale and renegotiating it as non-bank qualified. He said that they were very interested in continuing to handle this transaction and they felt if would be possible from their standpoint to renegotiate the sale. Mr. Burggraaff commented that there may be some negative reactions on the part of some banks as a result of having to go through this process again, but that in the long run the City's credit rating will not be affected. He estimated that the higher cost for the non-bank qualification rate could fall in the range of $70,000 to $100,000. He pointed out that without rescinding this sale the hospital could sell bonds in November, 1992, as long as they did not close until January, 1993. He stated that he could not predict the bond market for the Fall; however, he said that some people speculate that if bonds are sold in early January there will always be a good market. He commented that interest rates are good now and have been for some time and he didn't know of anything that would be changing that situation very soon. Council Member Hoffman asked Mr. Halliburton if the hospital would be willing to "make the City whole" in 1993 if by chance they don't sell bonds in 1992 and the same situation arises in 1993. Mr. Halliburton said that the hospital would be willing to do whatever is necessary to sell bonds. Mr. Halliburton confirmed that in March the Board consciously stepped back from their expansion plan but in May they decided to proceed with expansion within the boundaries of the approved site plan but not within the same footprint. He stated that they expect to receive their required Certificate of Need from the State to allow the expansion shortly after filing the application in September. Moved by Parks, seconded by Campbell, to adopt RESOLUTION NO. 92-215 rescinding the sale of $6,010,000 General Obligation Corporate Purpose bonds and authorizing a bond purchase contract. Roll Call Vote: 4-2. Voting Aye: Campbell, Hertz, Hoffman, and Parks. Voting Nay: Brown and Wirth. Resolution declared adopted, signed by the Mayor, and hereby made a portion of these minutes. Moved by Campbell, seconded by Parks, to adopt RESOLUTION NO. 92-216 setting June 23, 1992, as the date for a public hearing on a loan agreement in the principal amount of $6,010,000. Roll Call Vote: 4-2. Voting Aye: Campbell, Hertz, Hoffman, and Parks. Voting Nay: Brown and Wirth. Resolution declared adopted, signed by the Mayor, and hereby made a portion of these minutes. COMMENTS: There were no comments. ADJOURNMENT: The meeting was adjourned at 5:50 p.m. _________________________________ ______________________________________ Nancy Dionigi, City Clerk Larry R. Curtis, Mayor