City Council

Minutes were approved by the Finance Committee on May 20, 2024 CITY OF LACONIA - CITY COUNCIL SUBCOMMITTEE MEETING FINANCE COMMITTEE 6:00 P.M. 11/13/2023 - Minutes 1. CALL TO ORDER Chairman Lipman called the meeting to order at 6:19 PM 2. SALUTE TO THE FLAG Chairman Lipman led the salute to the flag. 3. RECORDING SECRETARY Katie Gargano, City Clerk 4. ROLL CALL Clerk Gargano called the roll of the following committee members: Councilor Cheney, Councilor Soucy and Councilor Lipman. Chairman Lipman mentioned that all committee members were in attendance and a quorum was established. 5. STAFF IN ATTENDANCE Kirk Beattie, City Manager; Glenn Smith, Finance Director 6. ACCEPTANCE OF MINUTES FROM PREVIOUS MEETINGS 7. FINANCE (Lipman (Chair), Cheney, Soucy) 7.A. Consideration of bids for FY24 bonded projects The purpose of the bond is to distribute the net cost of the acquisitions over a twenty-year period. The net cost of both items is $3,935,000, with $3,000,000 committed for sanitary sewer system projects and $935,000 for fire engine replacement. Issuance of these bonds was approved by the City Council under Resolution 2023-24 (Fire Engine) and 2023-25 (Sewer System Improvements) on September 11, 2023. On September 18, 2023, a bid request was distributed to Bank of New Hampshire, Franklin Savings Bank, Northway Bank, TD Bank, Meredith Village Savings Bank, New Hampshire Municipal Bond Bank (NHMBB) and Newburyport Bank. Bank of New Hampshire and Franklin Savings Bank filed bids for this project. Both institutions filed proposals for one bond covering both projects. TD Bank declined to bid, noting they do not issue bonds for terms in excess of 10 years. No response was received from Meredith Village Savings Bank, Newburyport Bank or Northway Bank. NHMBB filed a letter of interest outlining their upcoming issue.  TD Bank declined to bid, noting they do not issue bonds for terms in excess of 10 years. No response was received from Meredith Village Savings Bank, Newburyport Bank or Northway Bank. NHMBB filed a letter of interest outlining their upcoming issue. All responses provided for a fixed interest rate, annual principal payments and semiannual interest payments. Rate and fee information is summarized below. FSB BNH Rate 5.35% 6.85% Prepay Penalty None Not Specified Fees $500 (est.) None The project has been proposed for inclusion in the January 2024 issue of the New Hampshire Municipal Bond Bank. Interest rates for this issue have not been finalized. For purposes of comparison, the most recent NHMBB issue offered a rate of 3.65%. Interest cost ranges from $1,508,000 to $2,830,248 over the 20-year life of the bond, depending on which institution is selected as the successful bidder. FY25 costs range from $143,627 to $269,547. There was nothing new to report on this item. The first reading and to schedule a public hearing will be done at the 11/27/23 council meeting. 7.B. Discussion with NH Municipal Bond Bank Director Smith passed out some excerpts from the budget (pages 80 & 82). Chairman Lipman discussed the percentages presented and noted that the City is in good financial shape. He’d like to see an amortization schedule. He feels that 4.7% is a good number to start with. Chairman Lipman called Tammy from the Municipal Bond Bank to hold a conference call. The committee spoke to Tammy about the current market rate, asked about a preliminary analysis. She said she had done one as of today: 10 year 4.2% and 20 year at 4.7% and that is all in costs, the only thing out of pocket is the bond pool. The question of whether the amortization schedule would be straight? She said there are two options: one is level principal, where more principal is paid first, with less interest being paid overall, the second is level debt structure, which is level throughout the cost of the loan. Councilor Lipman noted it was important to look at both structures to compare. Currently 4.9 million is being asked, the average weighted life is 1.25. The time to expend the funds is 24 months with some projects going up to 36 months, the bond council discusses that at the time. Our commitment date is December 18, 2023. That is the date that all loan agreements are due. The bond bank is meeting tomorrow (11/14/23) to approve our application. The committee then discussed the July bond issuance agreement and requirements. For FY 24 the city has 2 bonds retiring totaling 3.1 million. There was also a discussion on what the yearly costs would be for the principal and interest payments. The committee is being cautious about the tax cap. The committee has decided to change our initial request and to ask for 7 million dollars rather than the original 4.9 million. The difference is going to be spent on road improvement projects, that do not include just pavement but could also include complete reconstruction of a road. Tammy noted the change and will present it at tomorrow’s meeting. 8. Any other business that may come before the Committee 9. ADJOURNMENT  Tammy noted the change and will present it at tomorrow’s meeting. 8. Any other business that may come before the Committee 9. ADJOURNMENT Chairman Lipman adjourned the meeting at 7:01 PM. Respectfully submitted, Katie Gargano, City Clerk