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HomeMy WebLinkAboutMINUTES-08/22/1989-SpecialAugust 22, 1989 ' COUNCIL OF THE CITY OF FORT COLLINS, COLORADO SPECIAL MEETING 6:15 p.m. A special meeting of the Council of the City of Fort Collins was held on Tuesday, August 22, 1989, at 6:15 p.m. in the Council Chambers in the City of Fort Collins City Hall. Roll call was answered by the following Councilmembers: Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Staff Members Present: Burkett, Krajicek, Crumbaker-Smith Resolution 89-154 Relating to the Issuance of Carson, Burger and Weekly, Inc. Project Industrial Development Revenue Bonds Adopted Following is staffs memorandum on this item: "EXECUTIVE SUMMARY ' On August 15, 1989, City Council passed Ordinance No. 101, 1989, on Second Reading, regarding the issuance of Carson, Burger & Weekly's Industrial Development Revenue Bonds. On August 17, 1989, bond counsel for this issue advised that the proposed terms for the sale of these bonds have been changed. The proposed changes vary materially from the ones contemplated by Ordinance No. 101, 1989. The changes will involve substantial amendments to a number of the bond documents, including the trust indenture and the form of the bonds themselves. For this reason, it is advisable to confirm, by Resolution, the Council's intention to include such a variation within the actions contemplated by the passage of Ordinance No. 101, 1989. Under this new proposal, the bonds will not be sold as long-term bonds at a set interest rate throughout. They will carry a specified rate of interest for a period of six months. At the end of each six-month period, the remarketing agent will announce the rate for the following period. Bondholders may choose to hold a bond or to surrender it after each announcement. The company may choose to convert the bonds from this variable rate structure to a set long-term rate (with the City's consent) during the life of the issue. This Resolution summarizes these changes. This bond issue is currently set for closing on August 29, 1989." Finance Director Alan Krcmarik summarized the CBW bond ordinance project and presented information on the new rate structure. -451- August 22, 1989 Tom Metier, bond counsel, Fischer, Brown, Huddleson & Gunn stated there would be no further involvement of Council regarding the rate changes and stated the bonds would be placed with an bond agent in New York, where the bonds are remarketed on a continual basis and the rates are re -set every six months and commented on the option which allowed the company to exercise a one-time conversion to a fixed rate. He stated the fixed rate could be set for a period of not less than five years and explained that at the end of the five year period the remarketing agent could reset the rate for an additional five years. He spoke of the original rate that was quoted in the market being over one percent higher that had been represented by the underwriter and explained the credit enhancement that will accompany the bond documents. He clarified how the bond documents from CBW could be used for a public purpose from a private entity and explained the guarantee of the IDRBs. He noted the marketing risk was initially on First Interstate Bank of Fort Collins and then upon First Interstate Bank of Denver (the guarantor) and noted the City's protection under the financial's of both companies. He outlined the seven day market rate index which establishes the rates for a six month period. Assistant City Attorney Mary Crumbaker-Smith stated her office had reviewed the Resolution and was comfortable with this approach to the IDRB documents. Finance Director Alan Krcmarik stated that he did not believe the program would require additional work on the part of staff as a consequence of the variable interest rate. Assistant City Attorney Mary Crumbaker-Smith stated that at the present time considerable redrafting of the trust indenture would need to be done and clarified that over the life of the bond there would not be much additional work involved. Councilmember Edwards made a motion, seconded by Councilmember Kirkpatrick, to adopt Resolution 89-154. Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. THE MOTION CARRIED. Adjournment Councilmember Azari made a motion, seconded by Councilmember Maxey, to adjourn the meeting. Yeas: Councilmembers Azari, Edwards, Horak, Kirkpatrick, Mabry, Maxey, and Winokur. Nays: None. 1 1 L -452- August 22, 1989 I The meeting adjourned at 6:25 p.m. TTEST: City Clerk 1 Mayor -453-