Finance Committee

CITY OF VERONA MINUTES FINANCE COMMITTEE MAY 27, 2014 VERONA CITY HALL 1. The meeting was called to order by William “Mac” McGilvray at 6:03 p.m. 2 Roll Call: William “Mac” McGilvray, Jack Linder. Absent (excused): Elizabeth Doyle. Also present: Bill Burns, City Administrator; Cindy Engelke, Finance Director; Mike Harrigan, Ehlers and Associaites. 3. Approval of the 5/12/2014 Finance Committee Minutes: Motion by Linder, seconded by McGilvray, to approve the 5/12/2014 Finance Committee minutes. Motion carried 2-0. 4. Payment of Bills: Motion by McGilvray, seconded by Linder, to approve the payment of bills in the amount of $235,936.84. Motion carried 2-0. 5. Resolution R-14-021 Approving Initial Resolution Authorizing $1,670,000 General Obligation Bonds for Street Improvements Projects: Discussed with item #9. 6. Resolution R-14-022 Approving Initial Resolution Authorizing $305,000 General Obligation Bonds for Storm Sewer Projects: Discussed with item #9. 7. Resolution R-14-023 Approving Initial Resolution Authorizing $7,135,000 General Obligation Bonds for Fire Station Project: Discussed with item #9. 8. Resolution R-14-024 Resolution Directing Publication of Notice to Electors: Discussed with item #9. 9. Resolution R-14-025 Providing for the Sale of $9,110,000 General Obligation Corporate Purpose Bonds: Mr. Harrigan from Ehlers and Associates presented the pre-sale report for the City’s 2014 general obligation borrowing. The City is planning to borrow $9,110,000 in general obligation bonds for the following projects:  $922,000 Street Improvements – Mill and Overlay Project  $511,471 Lincoln Street Reconstruction Project  $200,000 Traffic Signal Installations  $300,000 Storm Water – Lincoln Street Channel and Basin  $7,000,000 Fire Station Project  $176,529 Issuance Costs, Underwriters Discount, and Rounding $9,110,000 TOTAL  The City previously borrowed $500,000 for the Fire and EMS facility project in 2013. With the proposed 2014 issue, the City’s total borrowing for this project would be at $7,500,000. It is anticipated that a final borrowing for this project would take place in 2015 to provide the balance of funds needed based on the final design and actual construction costs. Planned capital borrowing items are projected for 2015 to 2018, although these are subject to change as part of the annual review of the City’s capital improvement plan. Based on the current and future projected borrowing, the City’s tax rate for debt service is projected to increase from $2.23 per $1,000 to $2.54 per $1,000 by 2016. Committee members asked about the call features of the bonds and the amount of outstanding debt for the City. The bonds would be callable after 8 years. Mr. Harrigan said that he recommends keeping the call period at 8 years since there is limited return in extending the call date out further. The City is currently at 48.2% of its statutory debt capacity which is 5% of the total equalized value of the City. The City’s Financial Management Policy further restricts the City’s outstanding general obligation debt to 3.75% of total equalized value. Mr. Harrigan also provided an explanation of premium bond bids. Ehlers will use a Total Interest Cost calculation to compare bid results which takes into account a premium or discount bid. Motion by McGilvray, seconded by Linder, to recommend that the City Council approve resolutions R-14-021, R-14-022, R-14-023, R-14-024, and R-14-025 relating to the issuance of $9,110,000 general obligation bonds. Motion carried 2-0. 10. Adjournment: Motion by Linder, seconded by McGilvray, to adjourn the Finance Committee Meeting at 6:45 p.m. Motion carried 2-0. Respectfully submitted, Bill Burns, City Administrator