2001-10-09 CITY COUNCIL SPECIAL MEETING MINUTES205
MINUTES OF A SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF
PEARLAND, TEXAS, HELD ON OCTOBER 9, 2001, AT 6:00 P.M., IN THE COUNCIL
CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS.
The meeting was called to order with the following present:
Mayor
Tom Reid
Mayor Pro -Tem
Larry Marcott
Councilmember
Woody Owens
Councilmember
Klaus Seeger
Councilmember
Larry Wilkins
City Manager
Bill Eisen
Assistant City Attorney
Nghiem Doan
City Secretary
Young Lorfing
Absent: Councilmember Richard Tetens.
Others in attendance: Deputy City Manager Alan Mueller; Executive Director of Community
Services Tobin Maples.
CALL TO ORDER
PURPOSE OF THE: MEETING:
FIRST AND ONLY READING OF ORDINANCE NO. 1029 - AN ORDINANCE
AUTHORIZING ISSUANCE OF CITY OF PEARLAND, TEXAS, WATER AND SEWER
SYSTEM REVENUE BONDS, SERIES 2001; PRESCRIBING THE TERMS AND
CONDITIONS THEREOF; PROVIDING FORTHE PAYMENTTHEREOF; AWARDING THE
SALE THEREOF; AUTHORIZING THE PREPARATION AND DISTRIBUTION OF AN
OFFICIAL STATEMENT TO BE USED IN CONNECTION WITH THE SALE OF THE
BONDS; MAKING OTHER PROVISIONS REGARDING SUCH BONDS AND MATTERS
INCIDENT THERETO; AUTHORIZING EXECUTION AND DELIVERY OF A PAYING
AGENT/REGISTRAR AGREEMENT; AND CONTAINING OTHER MATTERS RELATED
THERETO. Mr. Bill Eisen, City Manager.
Councilmember Owens made the motion, seconded by Mayor Pro -Tem Marcott, to declare
Ordinance No. 1029 an emergency and approve it on its first and only reading.
City Manager, Bill Eisen, introduced Frank Ildebrando, City's Financial Advisor, and stated
Mr. Ildebrando will be presenting the bids to Council for the sale of the Water and Sewer
System Revenue Bonds.
Page 1 of 4 - 10/9/2001
206
Frank Ildebrando, Financial Advisor, addressed Council and stated the bond sale for
$10,000,000 in Water and Sewer Revenue Bonds, Series 2001, was originally scheduled
for October 8, 2001, however, with that being Columbus Day, a holiday, he recommended
to delay the sale until today since the bond market was closed for the holiday. He further
reported that it was a good reception of bids. Mr. Ildebrando reported the tabulation of bids
are as follows:
Name of Bidder
Dain Rauscher Inc.
Salomon Smith Barney
First Southwest & Company
William R. Hough & Co. Inc.
Effective
Net
Interest Rate
Interest Cost
4.9831%
$ 8,501,760.42
5.0068%
8,542,272.92
5.0160%
8,558,011.88
5.0702%
8,650,478.98
Mr. Ildebrando further stated the bids were very close and he was pleased to see that the
City had received less than a 5% interest rate on the revenue bonds. Originally it was
estimated the Water and Sewer Revenue Bonds interest rate may be at 5.5%. The City is
well below the estimate that was originally predicted. The underwriters really stepped up
to the plate and gave some good bids. Mr. Ildebrando stated the City has an excellent
credit rating and it is his recommendation that the City award the bid to Dain Rauscher at
a4.9831%. He further gave a detailed overview of the bid submitted by Dain Rauscher Inc.
Assistant City Attorney, Nghiem Doan, addressed Council and stated Ordinance No. 1029
that Council received does not have an emergency clause in the ordinance. Ordinance No.
1028 does include the emergency clause. Bond Counsel has added an emergency clause
to Ordinance No. 1029, and has provided the City with a new ordinance. Mr. Doan asked
the maker of the motion to add that it is being declared an emergency and will be
considered on its first and only reading.
Discussion ensued between Council, Staff, and Mr. Ildebrando regarding the administration
and sale of the Water and Sewer Revenue Bonds.
Rick Witte, Bond Counsel with Andrews & Kurth, addressed Council and stated the
apporiate action, if the Council wants to move forward with the bond issue, is to approve the
ordinance. The ordinance will be adopted providing the winning bid information, including
identifying Dain Rauscher Inc., as the winning bidder, and then also incorporating all the
interest rates into the document. Mr. Witte gave a brief overview of the ordinance.
Voting "Aye" Councilmembers Owens, Marcott, Wilkins, and Seeger.
Voting "No" None.
Page 2 of 4 - 10/9/2001
207
Motion Passed 4 to 0, with Councilmember Tetens absent.
FIRST AND ONLY READING OF ORDINANCE NO. 1028 - AN ORDINANCE
AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS CERTIFICATES OF
OBLIGATION, SERIES 2001; PRESCRIBING THE TERMS AND FORM THEREOF;
PROVIDING FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND INTEREST
THEREON; AWARDING THE SALE THEREOF; AUTHORIZING THE PREPARATION AND
DISTRIBUTION OF AN OFFICIAL STATEMENT TO BE USED IN CONNECTION WITH
THE SALE OFTHE CERTIFICATES; MAKING OTHER PROVISIONS REGARDING SUCH
CERTIFICATES, INCLUDING USE OF THE PROCEEDS THEREOF, AND MATTERS
INCIDENT THERETO; AND DECLARING AN EMERGENCY. Mr. Bill Eisen, City Manager.
Council member Seeger made the motion, seconded by Councilmember Wilkins, to approve
Ordinance No. 1028 on its first and only reading.
Frank Ildebrando, City's Financial Advisor, addressed Council and stated the City received
bids for $11,650,000 in Certificates of Obligation, Series 2001. He further reported there
was also good reception of bids for the Certificates of Obligation, and that bidding was
extremely tight. Mr. Ildebrando reported the tabulation of bids are as follows:
Mr. Ildebrando further stated interest rates are well below what was predicted. Originally it
was estimated the Certificates of Obligations interest would be at 5.5%. Mr. Ildebrando
recommended the City award the bid to Dain Rauscher at 4.8609%. He further gave a brief
overview of the bid submitted by Dain Rauscher Inc. He also reported he did re -run a tax
rate analysis and the City is going to meet all the tax rate predictions that have been made
with respect to the City's future bond program.
Brief discussion ensued between Council, Staff, and Mr. Ildebrando regarding the interest
rates, administration, and sale of the Certificates of Obligation.
Voting "Aye" Councilmembers Seeger, Wilkins, Marcott, and Owens.
Voting "No" None.
Motion Passed 4 to 0, with Councilmember Tetens absent.
Page 3 of 4 - 10/9/2001
Effective
Net
Name of Bidder
Interest Rate
Interest Cost
Dain Rauscher Inc.
4.8609%
$ 7,632,395.21
First Southwest & Company
4.8723%
7,650,353.18
Salomon Smith Barney
4.8827%
7,666,545.55
William R. Hough & Co. Inc.
4.8870%
7,673,409.02
Mr. Ildebrando further stated interest rates are well below what was predicted. Originally it
was estimated the Certificates of Obligations interest would be at 5.5%. Mr. Ildebrando
recommended the City award the bid to Dain Rauscher at 4.8609%. He further gave a brief
overview of the bid submitted by Dain Rauscher Inc. He also reported he did re -run a tax
rate analysis and the City is going to meet all the tax rate predictions that have been made
with respect to the City's future bond program.
Brief discussion ensued between Council, Staff, and Mr. Ildebrando regarding the interest
rates, administration, and sale of the Certificates of Obligation.
Voting "Aye" Councilmembers Seeger, Wilkins, Marcott, and Owens.
Voting "No" None.
Motion Passed 4 to 0, with Councilmember Tetens absent.
Page 3 of 4 - 10/9/2001
FM
ADJOURNMENT
Meeting was adjourned at 6:37 p.m.
Minutes approved as submitted and/or corrected this 22nd day of October, A.D.,
2001.
�.P
Tom Reid
Mayor
Page 4 of 4 - 10/9/2001