HomeMy WebLinkAboutCity Council Meeting - Council - Minutes - 05/10/1976 Kent , Washington
May 10, 1976
SPECIAL MEETING of the Kent City Council was called to order at 7:30
o'clock p.m. Present : Mayor Hogan, Councilpersons Carey, Johnson,
Just, Kitto, Masters, McCaughan and Storment . Also present : City
Administrator Street , Public Works Director Ulett, City Treasurer
Drotz, Finance Director 'Hinkle, Planning Director Harris, and URS
representative Ramsey.
Winkle introduced Bob Yeasting and Al Barrie of Foster & Marshall , Inc.,
Investment Bankers and Brokers of Seattle. Yeasting presented a
written proposal for the purchase or the $ 1 ,000,000 b"Jater Revenue
Bond-1976 issue, at a net effective interest rate of 6.73%. He
noted that the proposal provided ;or Foster & Marshall to pay
$98 for each $ 100 par value of the bonds, plus interest accrued
to the date of delivery. He pointed out that the coupons would
bear various interest rates, starting at 6.80110, decreasing to 5.90%
and then progressing to 6.807o again, according to the written
schedule for the duration of the issue, with the average coupon
weiaht of 6.60% after the 211'o' discount was considered. Yeasting
distributed copies of the Municipal Newsletter showing the Bond
Buyers index of municipal interest rates over the past year. He
noted that the market has started to move adversely and recommended
that this interest rate be accepted, as the rate was likely to
climb. He stated that King County had sold Sewer revenue Bonds
last week at 7% and that recent New York bonds went at 7.60%.
Upon McCaughan's question, Yeasting pointed out that school bonds
which had been sold at a lower interest rate had been short term ,
bonds. Further questions were posed and '',','inkle and Yeasting ex—
plained that 4tiiashington law permits negotiated bond sales, and
that to call for bids would delay the sale of the issue by some
6 to 8 weeks, and it was thought that the interest rates would be
ascending. It was pointed out that the market was better two weeks
ago than now.
Street noted that he was generally in favor of the bid process for
the sale of bonds, but that he had complete confidence in Foster &
Marshall , Inc. , as they had been our consultants for some time.
Winkle recommended that the proposal be accepted based upon the
timing and the current market conditions. KITTO MOVED to accept
the proposal of Foster & Marshall , Inc, as outlined at this meeting
and as contained in their letter of May 10, 1976 and for the Mayor
to be authorized to sign the acceptance. Storment seconded. Motion
carried. Upon Street 's recommendation, Just moved to instruct the
City Attorney to prepare an ordinance creating the 1976 Water Revenue
Bond interest & redemption fund, McCaughan seconded. Upon McCaughan's
question it was noted that the city could refinance the issue if the
market became better by advance refunding, and that the city had
done this in the past . Motion carried.
The special meeting was adjourned at 8: 10 p.m.
Respectfully submitted,
Marie J e n , CMC
City Clerk