 Okay, it's 5 30 Let's start the meeting Roll call let the record show that Alderperson Donahue is excused Call the meeting to order. Please join me in the Pledge of Allegiance. I Pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God Indivisible with liberty and justice for all Next Cheryl you're pretty pretty well familiar with city staff. Do you want me to enter us to introduce ourselves? I think we're good. All right 2.1 is approval of the minutes from the October 12 2020 Meeting I'll I'll enter in entertain a motion move to approve Second We have a motion and a second to approve the minutes from October 12 any discussions All in favor aye. Aye Vice chair votes aye motion carries Next we have items for discussion only 3.1 the sale of 11 million four hundred and thirty five thousand dollars taxable general obligation refunding bonds series series 2020 D Carol Okay. Thank you. All right now I'm going to try to share my report with you and Move through this information. So we'll see if I can make it happen All right, so I'm going to start with the first page of my report and at the top It does start with the 11 million four thirty five taxable geobahn and the next line says the new issue size When we adopted the preliminary resolutions, it did say an approximate amount The issue size will change depending on the interest rate and the fact that we are borrowing to Provide for certain interest payments. Carol. Okay, Carol. Can you Carol? Can you pause? Can you pause for a second? I just want to make sure can any of the elders remotely see the presentation No, no we can okay. Just give us one second and we'll see if we can't get that corrected Carol did you click on share your screen? Now it's getting closer in council chambers. We can see it and online Okay, now we've got it. Oh, perfect. Okay. Thank you Okay, so my next observation is and you make the printing larger It does not fill up the whole screen Let's see if I can see any hints for me I mean, it's better you you should be able to on the right hand side There should be a little plus and minus symbol if you press the plus symbol you can make it bigger or the top of your screen On your end. I got it. Okay, Carol. I'm good. Oh good. Thank you. Thanks for the help going to start with the fact that the issue size is now 11 million five hundred and ten thousand dollars and That issue size walks away depending on the actual interest rate that we received today because part of this borrowing is for Interest payments that will be paid out on the refunding bonds between 22 23 and 24 so With that, I'm just going to go into the background of the issue and then come forward with how we got to the issue size and the interest rate Now as the background We're going back to 2018 Where the city issued the NAND that was in the amount of 10 million four ninety This was the fund a portion of today team business park development That was the eligible piece for the taxes and financing that were also Long-term financing structured out for some of the taxable purposes in 2018 the NANDs are a short-term form of construction financing they're basically used to fund a project before a Revenue stream is available to support a long-term debt They're not a general obligation of the city However, the city does have to reserve general obligation debt capacity For the refinancing because the refinancing would be general obligation The other thing about a NAND is because it's not geo the city cannot levy for principal or interest payments and Therefore the NANDs were sized as I mentioned for the project for issuance expenses and some capitalized interest for 1819 it was the intention to refinance them with 20 years general obligation refunding bonds at the time of revenue stream would become available and I'm showing you there is a payment schedule Which is payments from June 1st of 2021? through June 1st of 2023 when the principal comes to Okay, in the meantime, there's only interest payments to be paid Now due to the pandemic Economic development has flowed into the team during 2020 and increment is currently not available nor able to be projected with certainty at this time so Although the city does anticipate that general obligation debt incurred for this development to be supported by revenue generated in today team The NANDs themselves have a prepayment feature starting June 1st of 2021 So we can use a special form of refinancing called advanced refunding That allows the city to refinance the NANDs prior to that prepayment date But we can only do that using taxable general obligation refunding bonds Proceeds of these bonds will purchase US Treasury obligations known as floods and they will be placed with an Astro agent and that Funds will pay off the principal of that 10 million 490 and the June 1 interest payment of that 190,131 on June 1st Now moving forward on September 14 sorry a Report was presented to finance and personnel regarding advanced refunding the NANDs with a taxable Geo refunding bond The historically low interest rate offered and opportunities to lock in 20 year financing So the projected true interest cost was at my report in September a 1.93% and Again, the bonds would provide funding for the purchase of the floods the issuance expenses and capitalized interest for 2022 through 2024 So as general obligation depth the tax levy will provide the security For these payments, but as increment becomes available. It will be used to offset the levy So we prepared for the market as we do for all issues We coordinated with forals for your legal documents We prepared and distributed an official statement and a notice of sales and we also went through the bond rating application process The result is Moody's did reaffirm a double a to bomb ratings and there is a report attached This is credit report, but when we do a financing without a new updated Audit, which of course there would be no update to the 2019 audit they give us what's called a press release So it's a very shortened version of a credit report That is included here in the biz received this morning We received three vids and they're listed there And the successful winning bidder came in at a two point one five percent So as you will notice the two point one five percent is higher than the one point nine three back in September we have been monitoring these interest rates and Today when the biz came in at a two point one five percent We get a lot of market research to provide to the city for Making the award tonight and that includes the information I've provided in this report on market which shows that The municipal bond market has experienced a very heavy volume of Pactable municipal curi securities both last week and it's scheduled to Also have that same volume this week So when you have that much volume hitting the marketplace and again generated by a lot of interest due to low interest rates It starts to put pressure on those rates because there's a lot of volume in the market And so in order to attract the investor interest rates start to to rise so That's one of the main reasons why their interest rate rose and when the interest rate rose That also of course raises the interest on the kept interest So that's why the issue size went from eleven million four thirty five to the eleven million five camps They driven by the by the kept interest The other thing is that this morning there was volatility occurring The first of all there were 41 sales today alone in the marketplace There was volatility or is it related to possibility or not of a stimulus bill and also articles were popping up right about that same time as your sale about In certain people's views they might be seeing some Experienced election jitters, which is very common I can't tell you for sure if the election jitters are coming into play here as the first time I've seen that reference in our in our publications, but Definitely the volume is record volume of taxable both last week and this week So that makes sense the more supply you chaos the pressure on on the rate So therefore looking at a two fifteen and twenty year bond the taxable rate You know, of course, we would love to hit the 193 But with that you can see through the tight bidding the three rates. We did receive was very tight And also I took a look back in 2018 when we went through The city did do a 20 year bond Passable bond and the true interest cost at that time in 2018 was four point one nine percent So just for market comparison, I took the rates from that issue back in 2018 and I applied it to this issue and you'll see that the difference in the principal amount would have been twelve million three hundred and sixty thousand dollars instead of the eleven million five ten and The additional debt service when compared to this issue at a two fifteen would have been about another four point one million dollars So that's kind of helped put in for into perspective The fact that even though we're not at the one ninety three The two fifteen now at the 20 year bonds compared to two fifteen I'm sorry at four nineteen back in 2018. I think can still give us some comfort in knowing that we're still hitting the very very good time for locking in the 20 year rates The helpful action on the final award resolution which has been prepared in the final dollar amount We'll lock in the principal amount and interest rates It will award the bonds to the winning bidder Piper Sammler It appoints associated trust company to access that expo agent so that they can order the slugs and and pay for them when the Funds are delivered which goes into the next section on Closing and delivery of fun November 16th is the closing the money will be distributed number one to the escrow agent to pay for the slugs the 659,000 comes to the city and is deposited to pay capitalized interest and You'll see that on the schedule. That's below. You see the column If you go all the way to the right-hand side of the page and then go to the column that Capitalized interest you'll see three years there that total that's 656,000 and then there's some little excess proceeds that goes on top of that so that all of that will come to the city and The expenses of issuance will be paid by the winning bidder And so I listed those by the underwriter municipal visor bond council rating and extra wages So that's the retirement schedule, you'll see principal starts in the year 2025 Because you have kept interest in those first three years and then we have an interest only payment in 24 And that's what we're hoping that by that time we'll see a sufficient increment generated to start covering some of that debt service and Then we have the final year in 2040 which is the longest that we can go out for 20 year bonds and Then I am showing you a tip number 18 cash flow Which this cash flow? shows you the first column on the left all of the issues outstanding there's three issues outstanding a debt service for 2018 now this including this issue that is the final debt service for all issues and Then moving over to the right. We have the capitalized interest that has been borrowed for all of those issues combined And then we have the updated projected tax increments So this is a column that was the city had updated prior to doing the financing and Again, it's everyone's you know best estimates and trying to project what development may reasonably occur And then we have the balance column in terms of what is covered and what is not covered by these projected increments The bottom part of the schedule is the final pricing Which shows you that as a taxable the columns of coupon and yield Which is the yield column is the market and in this case the coupon column is the same And that's because a taxable is frequently bought at a disc as a discount bond And that's what happened here. The underwriter just discounted these which means he keeps the hundred and seventy six thousand three eleven and He pays all the expenses with them and then the purchase price is what goes back to the city and The discount is taken into consideration in the true interest cost or rate that's on the very last line the next page is the What's called the Moody's a press release instead of a full-fledged credit report? Moody's issues a press release at this time. And so what it does is very short. It just has a Statement that Moody's has assigned the double a to and it also reaffirms the double a to rating on all of your outstanding general obligation debt And the rating rationale Is it's basically the same line that's taken out of your your complete credit report where it says it reflects the city's strong Financial position moderate debt retention burden and solid tax-based Below average resident income levels and then your credit report would have a paragraph that discusses each of those The coronavirus paragraph is something that they're putting in Everybody's credit report, but it's nice to see that they also say we do not see any material impact any material immediate credit risk for shabuigan the rating outlook and factors that could lead to a rating up or down are the same as They have been in prior reports to me it does list the legal security as general obligations The proceeds indicates what the money will be used for basic Profile of the city and then it gets into some Moody's disclaimers Those are all pages of the slayers and then we have the final award resolution And as you'll see it starts with the title in the dollar amount of 11 million five times It has a number of where as which is basically reciting history Saying the same thing of what the city did back in 2018 The city did adopt a step-sale resolution saying that we were going to move forward to do a refunding and take this We did a notice of sale that was distributed telling underwriters how to place their bid and then we get into the The fact that I'm just going to back up here That the city Second we're asking the bottom Saying that there was a notice of sale that is now an exhibit attached to this resolution and that we also did publish in different Industry publications and I put the sale on calendars the next page has the fact that we received this and Exhibit B will be the big tabulation that you've seen in my report And then it goes into the fact that you receive a bid from the Winning bidder and they're calling that the proposal which is also attached as exhibit C So these attachments is what makes the difference between your draft resolution that you may have seen to this Final award resolution is the attachment of those as well as of course the increase to the issue side So the rest of the resolution I don't ever like to call resolutions of boilerplate document, but I will say that it's prepared any format Exactly the way every sale general obligation sale document is prepared in terms of Authorizing the issuance the terms of the bond under payable principal nentures call features There's a tax levy Associated but as I mentioned as increment is available You are able to offset the tax levy as well as it is a tax levy for the 21 payments Which you will not have to levy for because you will have to capitalize interest to offset that so so all of this is standard general obligation language the fact that you will have a debt service fund the fact that you will use the money for F growing to buy those securities to take care of those nans Section scrolling through here approving of the official statement that went out that was reviewed by city administration Providing undertaking to Continue disclosure in the marketplace and we do take care of that for you and here is the assignment of the escrow agents So that will take care of the flood already have been subscribed for so that's in this resolution So the resolution itself ends on page nine That's the body of the resolution everything else is an exhibit and so As I mentioned today, I'm going to scroll through this very quickly. That's your notice of sale that document itself goes on Or right there for five pages and then there's another exhibit, which is the big tab And that's the exhibit is the winning bid and this is something you haven't seen but this is the bid form so it consists of two pages it is signed by the winning bidder and Does make reference to the change at the bottom because they obviously bid on it as 11 million 435 So that's how they're there the basis of the award and then we communicate with him to Agree to the numbers on the resizing so that's the bid form and The pricing summer you have seen already in my report. That's that table and the debt service schedule you have seen This is on a semi-annual basis. So that's that schedule And this is a form of bond. It's just one bond prepared for each principal amount. So this is a template so That is I believe the end of our That's the end of the Document So can I answer any questions? Any questions from the committee? Yes, this is for Would you go back to the page just before the Moody's document, which is a long way back Yeah Moody's logo Okay, no, you're right. That was it right there page number Okay, okay. Yeah number four The final pricing Summary the coupon the yield the maturity value the price the dollar price Would you would you go through the rationale for that again? Okay The purpose of this page is number one the most important Starting point is the yield column. Yes. The yield column is market Okay, an investor That wants to purchase the bond I look to the number one What is the credit quality and number two? How long does he want to invest for? Right. He wants to invest very short. He'll buy something on the front end there No, you know first five years if I know as he goes out longer. He gets more yield so back and Or mid-September let's say when I gave my last report those yield columns obviously were lower And so that's where you'll instantly know that there's a difference in the market because That is the market and so soon as I seen the yields. I knew that you know market was off And so that's what we started the investigation about okay What's driving the market up and then we got all kinds of feedback about the reason markets up is because of how many billions of dollars of Pactables are starting to drive the market up and those investors That you know, we're in it last week and bought their billions of dollars worth now. We have the same level of sales schedule in this week, so I Did not track the sales that took place this afternoon Because we were working out some of the revisions with the wing bitter in terms of the resize And it'll be interesting to see if the sales that occurred in the afternoon Experienced more pressure on interest rates than if those interest those yields would have gotten higher Throughout the day and we'll get higher throughout the week as more sales come into the into the market So you anticipate that more sales will come into the market. Oh, yeah, definitely. They're on the calendar already They're on the calendar. They had 41 on the calendar for today alone Okay, so yes, definitely So in this case the coupon column is mirroring the yield column, so and that's just the reflection of how a taxable bond is bought Right. Thank you. Yeah, any other questions? Carol I had one what was that back from 2018? What was that 12 million dollar figure you gave? I couldn't write it fast enough. Okay, the 12 million dollar figure is And that's 12 million. It's kind of you can see at the bottom here 12 million $360,000 that would have been the right. Thank you. Thank you very much Marty, I don't I can't speak for the rest of the committee But I would like a copy of this Not the whole resolution just the the winning bidder and the and the moody's report if you could email that out to us tomorrow Yes, I will we just couldn't for public director or open meetings law as we couldn't send it out before this because it wouldn't have met the time frame. I Understand is there any other questions? Thomas or Chuck Do we have a resolution that I mean When it comes when this comes up in the agenda tonight, what will be the revised the revised language for passage Or do you want to wait until that comes up and then give it to us? No, I think it can be dealt with at tonight's meeting Okay, it would be an ocean to amend essentially to reflect the changes that Carol just walked you through Okay Okay, any any anything else from anybody on the committee? Okay, our our next meeting would will be on October 26 2020 I'll entertain entertain a motion to adjourn so moved We have a motion and a second to adjourn all in favor. Aye. Aye. Aye chair votes aye. We are adjourned. Thank you for your time tonight