05/25/1983 Meeting - Laserfiche WebLink

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Council Bill 2643 was read the second time by council bill number only. e Mr. Obie moved, seconded by Ms. Smith, that the bill be given final passage. Roll call vote. All councilors present voting aye, the bill was declared passed and numbered 19145. IV. AWARD OF BANCROFT IMPROVEMENT SERIES "J" BONDS (memos, resolution, bid tabulation distributed) Mr. Whitlow introduced Warren Wong, Finance Director. Mr. Wong said that financial consultants Jim Breithaupt and Bob Moore, and David Coombs, General Accounting Manager, were present to respond to questions from councilors. Mr. Wong noted that on April 20, 1983, the council had authorized a $3.97 million bond issue. He distributed a memo documenting the bids and noted that the proceeds of the bond issue would be used to pay for assessment projects. e Mr. Wong said that the bid prospectus had been sent out on May 4, 1983. He said that Moody's had given the City an Aa rating, which was the highest rating a municipality the size of Eugene could receive. Mr. Wong noted that this retained the City's prior rating, but he indicated that it had been more difficult to obtain the Aa rating this time. He said that in discussing the rating, Moody's representatives had commented favorably on the City's conservative financial management policies and practices, on the cash carryforward, on the decision to apply revenue-sharing funds to capital or non-recurring expenditures, on the decision to fund current expenditures with current revenue, and on the practice of making interfund loans to support cash deficits. Mr. Wong said the City's strong, anticipatory financial management, good grasp of financial issues, and acceptance of short-term reductions in service and staffing to deal with revenue shortfalls had also been mentioned as strong points. He said that some negative points had also been cited, many of which were outside the City's control. These included 1) the continued depressed state of the local economy; 2) the position of the Lane County government; 3) the lack of aggressiveness in collecting delinquent property taxes; and 4) the allocation formula for distribution of property taxes, which calls for taxes to be distributed to jurisdictionns on the basis of the Lane County average rather than on an actual basis by jurisdiction. Mr. Wong listed the bids that had been received and said staff recommended awarding the bid to the low bidder, First Interstate Bank of California, at a rate of 7.7504. Councilor Holmer referred to the last sheet of the materials distributed by Mr. Wong and asked how the "low bidder" had been determined, since the firm offering the lowest interest rate did not offer the lowest total cost. Mr. Wong responded that this difference was due to the timing of interest payments. Mr. Moore added that determination of the true interest cost took into consideration the time value of money. Councilor Holmer suggested that in the future the council be presented with calculations detailed enough to make it clear that the City was making the award to the lowest bidder. Mr. Moore noted that the bid itself defined what figures the award would be based on. e MINUTES--Eugene City Council May 25, 1983 Page 6