Minutes of the January 4, 2001 meeting were approved with a motion by
Commissioner Beard and a second by Commissioner Gowen. Motion passed
Mayor Lay expressed sympathy the family of Billy Ray Helton in the passing of his mother.
Mayor Lay also announced the closing of the City Administration Building on January 15 in observance of Martin Luther King, Jr. Day.
Commissioner Gowen announced that due to the holiday Monday garbage pick-up will be done on Thursday of next week.
City Attorney Alan Betz presented 2 ordinances and 5 resolutions for adoption.
Public Hearing was opened on Ordinance #934, with no one wishing to address the Commission on the subject, the Public Hearing closed.
# 934 to amend Ordinance #789 entitled "Zoning Ordinance" of the City of Lawrenceburg - to rezone a portion of West Taylor Street from R-3 to C-1. Motion to approve on third and final reading was made by Commissioner Lindsey, with a second by Commissioner Pulley. Motion passed.
#935 to remove certain lands currently owned by Ronald R. Riggs and wife Alia B. Riggs from the corporate limits of the City of Lawrenceburg located in the East section of said city. Motion to approve on third and final reading was made by Commissioner Beard with a second by Commissioner Pulley. Motion passed.
RESOLUTIONS 1. To charge off bad debts in the Water, Sewer, Gas and Sanitation Departments for the month of December in the amount of $4,457.63. Motion to approve was made by Commissioner Pulley with a second by Commissioner Lindsey. Motion passed.
2. To enter into a memorandum of understanding with the Lawrence County Ambulance Service. Motion to approve was made by Commissioner Lindsey, with a second by Commissioner Pulley. Motion passed.
3. To borrow funds in an aggregate principal amount of not to exceed Seventeen Million Two Hundred Fifty Thousand Dollars ($17,250,000.00) for the purpose of financing certain capital improvements to the City's Water & Sewer System and converting certain Capital Outlay Notes. Motion to approve was made by Commissioner Pulley, with a second by Commissioner Beard. Motion passed.
4. To borrow funds in an aggregate principal amount of not to exceed Six Million Three Hundred Thousand Dollars ($6,300,000.00) for the purposes of financing certain capital improvements and converting certain Capital Outlay Notes. Motion to approve was made by commissioner Gowen, with a second by Commissioner Beard. Motion passed.
5. To borrow funds in an aggregate principal amount of not to exceed Twenty-Six Million Five Hundred Thousand Dollars ($26,500,000.00) for the purpose of financing certain capital improvements to the City's electric System and refunding certain Electric Revenue Bonds. Motion to approve was made by Commissioner Pulley, with a second by Commissioner Gowen. Motion passed.
Consultant Don Howell explained the plan and process on borrowing of the funds:
What you have just approved is the ability of the City and the Power System's General Fund and Utilities, depending upon what happens with interest rates in the financial market over the next 20 to 30 days, to issue refinancing bonds, which is refinancing existing debt as well as new capital for improvements to the Water & Sewer System and existing debt and city's infrastructure which totals $50,050,000.00. If rates do not get attractive enough at the time the bonds are offered for sale to create savings on some of the refunding debt, then the actual amount you will issue will be $431,600,000.00. This action you took simply gives the financial advisors and underwriters the ability to take advantage of additional savings should market conditions exist that will allow those savings. It is not mandatory. If those market rates are not attractive and do not create the cost savings of doing the refinancing then we will pull back from the $50 Million to about $31 Million, to those that really make sense and have attractive savings as well as new capital for the capital improvements that are required to be made in your Water & Sewer Systems.
The first action that you took addressed the utilities, Gas, Water & Sewer Systems of the city and provides the $20 Million to $10 Million Dollars of capital improvements that are the result of the Master Plan that you commissioned by J. R. Wauford Engineering, where they went in and assessed your needs, and identified the condition of your infrastructure. They issued a voluminous report that told you where the problems were, how long it had been since maintenance had occurred, what your current capacity is in your water treatment facility and your wastewater treatment capabilities. This financing is the result of addressing those items that were pointed out in that report, that are not needing to be fixed, they are required to be fixed. There is no option, if we want to continue to have clean safe drinking water and we want to discharge that water into our lakes and streams in an environmentally safe manner.
Secondly, in addition to that it will provide $6.8 Million Dollars of refinancing existing debt. In most cases taking debt down from a higher interest rate to a lower interest rate. In some cases that is not necessarily a savings, and what this refunding will do is allow the city, over time, to address these capital improvement needs through a rate structure that can be gradually implemented, so it is not necessary to come along and hit your rate payers with a significant increase right off the bat. That is the rational behind doing some of the refinancing, even though there may not be a savings on each and every issue.
The third item is the Lawrenceburg Power System, it would provide $9.65 Million Dollars in new construction projects what would go toward replacing and rebuilding Sub Stations and a number of other capital improvements that are needed in the Power system, and potentially refinance $16.4 Million dollars of outstanding debt. If rates hold where they are, refunding that outstanding debt, again if that occurs in the next 20 to 30 days and the rates hold true, it will create a savings of over $400,000.00 for the Power System in interest cost. If the rates move, the Power System has basically said that if there is not savings, they will withdraw that amount of money from the bond issue. So it could go from $50 Million to $16 Million Dollars.
The resolutions state that rates will not exceed 7%. There will not be a bond issue of refunding or refinancing if rates go to 7%. The reason this item is in the resolutions is; these resolutions must be published for 20 days, nothing can occur, no sale of bonds, we can not enter the market place for at least 20 days. Add 10 more days for week ends and you have about 30 days from adoption of these resolutions that this market could change. This gives you the flexibility on the new capital dollars to go into the market if you need to, should rates change. But, we would certainly not refinance if rates got higher than we expect them to. We believe they will be around 5% to 5 1/4 %. We want to make sure the general public clearly understand that we will not refinance debt if it gets out of that 5.5% to 5.75% range. The 7% is in there just to allow that time period that occurs from approval of this resolution to actually being in the market.
We did receive the approval of all three issues from the Director of Local finance, of the State Comptrollers Office, just prior to coming into the meeting. We are clear to go.
The next move with the approval of these resolutions will be the publication, a meeting on January 18th of the Commission to approve the next step, which is actually the loan agreements, to borrow the funds and refinance the existing debt. Then on January 25th there will be a meeting of the Public Building Authority to approve all the bond documents, and we expect a sale and closing to occur between the 25th and February 7th.
Mayor Lay thanked Mr. Howell and everyone that has worked so hard with him to get this bond issue and refinancing together.
Mayor Lay introduced John Sanders to make a report on the Granny Channel through Charter Communications.
Mr. Sanders reported that he and Charter Communications have spent several hours investigating the problem with Channel 3's reception. At this time it appears that the problem is with a low signal from her transmitter. They will continue to check on the problem.
With no further business to come before the meeting, a motion was made by Commissioner Beard to adjourn, with a second by Commissioner Gowen. Motion passed.