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HomeMy WebLinkAboutMinutes City Council - 04/02/1992 - SpecialMINUTES CITY OF CORPUS CHRISTI, TEXAS Special Council Meeting April 2, 1992 10 a.m. PRESENT Mayor Mary Rhodes Council Members: Betty Jean Longoria Edward Martin Joe McComb Clif Moss Absent Mayor Pro Tem Cezar Galindo Leo Guerrero Dr. David McNichols Mary Pat Slavik City Manager Juan Garza City Attorney James R. Bray, Jr. City Secretary Armando Chapa Mayor Rhodes called the meeting to order in the Council Chamber of City Hall. City Secretary Chapa called the roll and verified that the necessary quorum of the Council and the required charter officers were present to conduct the meeting. City Manager Garza announced that the City is selling $23,635,000 of General Improvement and Refunding Bonds. He indicated that $11,550,000 are new money bonds and $12,085,000 are refunding bonds. Mr. Garza stated that the City is also selling $3,000,000 in Combination Tax and Municipal Hotel Occupancy Tax Revenue Certificates of Obligation and $500,000 Combination Tax and Marina Revenue Certificates of Obligation. Mr. Garza continued by stating that the bonds are rated AAA because they are insured by the Financial Guaranty Insurance Corporation. He stated that the City has received a 6.82 percent interest rate, with insurance and he described it as an excellent deal for the City. Mr. Garza presented a booklet containing the final pricing information and stated that the coupon rates on the City's bonds are very competitive with other sales that have recently been put on the market. MICROCIOAR Minutes tegular Council Meeting April 2, 1992 Page 2 Mr. Garza stated that the City's bond rating for this issue is AA- from Standard and Poors and A for Moody's. He presented a Moody's Credit Analysis and highlighted certain statements outlined in the analysis. He indicated that Moody's would have preferred for the City to have raised taxes. Mr. Garza stated that he is convinced that refunding is in the best interest of the City. Responding to a question from Council Member Moss, Mr. Garza discussed a comparison of cost of borrowing with debt issues sold over the past three years. Mr. Moss noted that interest rates are very low at this time and inquired if there would be an advantage in refinancing all of the City's debt, and Mr. Garza responded that it would not be an advantage at this time. Council Member Martin inquired if the City has considered a total refunding to reduce its interest rates, and City Manager Garza replied that there would not be an economic savings in doing that. A question and answer period followed in regard to the final pricing information. Responding to a question from Council Member Martin about rates without insurance, Mr. Jim Seale, M. E. Allison & Co. Inc., stated that the savings with insurance was a four basis point savings. Mr. Garza referred to comparisons of what other cities are paying and commented on the City's Debt Service Schedule. Mayor Rhodes stated that the City should be proud of the bond presentation which was given in New York and she commended Rosie Vela, Finance Director, for the excellent job she did. Mr. R. F. Hasker, 1813 Wallace, expressed opposition to the bond sale because the refinancing will extend the City's debt. Mr. J. E. O'Brien, 4130 Pompano, inquired about the insurance costs. He stated that this is a good deal for everyone except those who have to pick up the tab. He stated that work that has been done by a previous City Manager to reduce the debt service portion of the tax rate is all for naught because in a few years, the debt service tax rate will go up again. He expressed opposition to the refunding. Mr. Ron Hudson, 3556 Austin, commented in regard to a section in the City Charter dealing with the refunding of bonds. City Manager Garza stated that the insurance cost is paid from the bond proceeds and he pointed out that the savings with insurance is four basis points. Council Member Martin stated that the Council had no choice but to refinance the old bond debt and move forward with the Capital Improvement Program. He stated that the Council decided that this is the best approach to move the City forward. Minutes tegular Council Meeting April 2, 1992 Page 3 City Secretary Chapa polled the Council for their votes and the following ordinances were passed: C. ORDINANCE NO.021361 PROVIDING FOR THE ISSUANCE OF $23,635,000 GENERAL IMPROVEMENT AND REFUNDING BONDS, SERIES 1992, OF THE CITY OF CORPUS CHRISTI, TEXAS, BEARING INTEREST AT THE RATES HEREINAFTER SET FORTH, AND PROVIDING FOR THE LEVY, ASSESSMENT AND COLLECTION OF A TAX SUFFICIENT TO PAY THE INTEREST ON SAID BONDS AND TO CREATE A SINKING FUND FOR THE REDEMPTION THEREOF AT MATURITY; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; DECLARING AN EMERGENCY; AND ORDAINING OTHER MA TIERS RELATED THERETO. An emergency was declared and the foregoing ordinance passed by the following vote: Rhodes, Longoria, Martin, McComb and Moss voting, "Aye"; Galindo, Guerrero, McNichols and Slavik absent. D. ORDINANCE NO, 021362 PROVIDING FOR THE ISSUANCE OF $3,000,000 CITY OF CORPUS CHRISTI, TEXAS, COMBINATION TAX AND MUNICIPAL HOTEL OCCUPANCY TAX REVENUE CERTIFICATES OF OBLIGATION, SERIES 1992; DECLARING AN EMERGENCY; AND ORDAINING OTHER MA ITERS RELATING TO THE SUBJECT, An emergency was declared and the foregoing ordinance passed by the following vote: Rhodes, Longoria, Martin, McComb and Moss voting, "Aye"; Galindo, Guerrero, McNichols and Slavik absent. E. ORDINANCE NO. 021363 PROVIDING FOR THE ISSUANCE OF $500,000, CITY OF CORPUS CHRISTI, TEXAS, COMBINATION TAX AND MARINA REVENUE CERTIFICATES OF OBLIGATION, SERIES 1992-A; DECLARING AN EMERGENCY; AND ORDAINING OTHER MA ITERS RELATING TO THE SUBJECT. An emergency was declared and the foregoing ordinance passed by the following vote: Rhodes, Longoria, Martin, McComb and Moss voting, "Aye'; Galindo, Guerrero, McNichols and Slavik absent. There being no further business to come before the Council, Mayor Rhodes declared the Council Meeting adjourned at 10:35 a.m. on April 2, 1992. I HEREBY CERTIFY that the foregoing is a true and correct copy of the Minutes of the Special Council Meeting of the City of Corpus Christi of April 2, 1992, which were approved by the City Council on April 7, 1992. WITNESSETH MY HAND AND SEAL, this the 8th day of April, 1992. Armando Chapa City Secretary SEAL