City Council

Minutes were approved by the Finance Committee on May 20, 2024. CITY OF LACONIA - CITY COUNCIL SUBCOMMITTEE MEETING FINANCE COMMITEE 6:30 P.M. 11/27/2023 - Minutes 1. CALL TO ORDER Chairman Lipman called the meeting to order at 6:31 PM 2. SALUTE TO THE FLAG Councilor Soucy 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 noted 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. Resolution 2023-24 - Relative to approval of bonding for the purpose of funding capital improvement projects During its meeting of November 13, 2023, the City Council Finance Committee discussed the bonding to fund necessary capital improvement projects. The Committee agreed to recommend that Council authorize the issuance of a bond in the amount of $2,083,738 for this purpose. At its meeting of November 13, 2023, the City Council affirmed this recommendation and directed staff to proceed with adding this amount to bond authorizations previously approved for sanitary sewer upgrades, purchase of a fire engine, and purchase of two ambulances, bringing the total amount to be bonded in FY24 to $7,000,000. This matter is on the City Council’s November 27, 2023 agenda for a first reading and scheduling of a public hearing at the December 11, 2023 Council meeting. The proposed expenditure is not included in the FY24 budget approved on June 27, 2023. Adoption of the accompanying Resolution will increase authorized spending in the amount of $2,083,738, with funding to be provided through bonding. The exact interest cost is dependent on interest rates at the date of issuance. Current estimates are that interest rates at the time the bond is issued will be approximately 4.7%. Using this rate, the interest cost associated with this portion of the overall bond is estimated to be $1,028,405 over the 20-year term of the bond, with $97,935 due in FY25. With approval of this recommendation, the total bond amount for FY24 will be $7,000,000. Forty- three percent of this total will accrue either directly or indirectly to the general fund. The FY25 general fund expense associated with the entire bond is estimated to be $292,818.  approximately 4.7%. Using this rate, the interest cost associated with this portion of the overall bond is estimated to be $1,028,405 over the 20-year term of the bond, with $97,935 due in FY25. With approval of this recommendation, the total bond amount for FY24 will be $7,000,000. Forty- three percent of this total will accrue either directly or indirectly to the general fund. The FY25 general fund expense associated with the entire bond is estimated to be $292,818. A recommendation from the Finance Subcommittee is requested to authorize bonding for the purpose of capital improvement projects as proposed and as contained in Resolution 2023-34. I move to recommend the City Council authorize bonding for the purpose of capital improvement projects as proposed and as contained in Resolution 2023-34. Discussion: Chairman Lipman wanted to cover what the municipal bond bank request. The bond bank approved the additional request to go up to 7 million dollars. This bond is going to cover the sanitary sewer improvements, a new fire truck, two new ambulances and that leaves 2,083,738.00 for capital improvement projects within the city. This will be one 7 million bond with a 20 year note. There was a brief discussion about the potential rates and how they could fluctuate. There is no way in knowing until January when the rate is set by the bond bank. Councilor Soucy asked if there was a time limit on using the funds? Chairman Lipman explained that you typically have 24 months to expend the funds, but as long as you have started the project you have up to 36 months. Chairman Lipman discussed with Director Smith on if a 6 month retro is allowed. Chairman Lipman also stated the importance of matching your useful life with your bond proceeds, you don’t want your debt to exceed the life of the bond. We need to decide where the money should be used to notify the bond bank what it is being spent on. Timeline: Tonight, the recommendation will be made to the council at the council meeting. There will be a public hearing on 12/11/23 on the bond. The council will be asked to vote on the bond at the 12/11/23 meeting. There will be a separate finance committee meeting following the 12/11/23 council meeting. Director Smith explained that road reconstruction can be more than just pavement. Chairman Lipman said they will be looking for items that have a useful life of 20 years. Councilor Soucy made a motion to recommend the City Council authorize bonding for the purpose of transportation infrastructure projects as proposed and as contained in resolution 2023-34. Seconded by councilor Cheney. Discussion: None. The motion passed with all in favor. 3-0 8. Any other business that may come before the Committee 9. ADJOURNMENT Chairman Lipman adjourned the meeting at 6:49 PM Respectfully Submitted, Chairman Lipman adjourned the meeting at 6:49 PM Respectfully Submitted, Katie Gargano, City Clerk