HomeMy WebLinkAboutSEPTEMBER 29, 1977 SPECIAL SESS
SPECIAL MEETING
OF THE
HONORABLE CITY COUNCIL
OF THE
CITY OF VIRGINIA BEACH, VIRGINIA
September 29, 1977
The Special Meeting of the Council of the City of Virginia Beach,
was held in the Council Chambers, in the Administration Building,
in the Borough of Princess Anne, on Thursday, September 29, 1977,
at 12:00 Noon, for the purpose of taking prompt action on bids
expected to be submitted for the sale of twenty million dollars
in bonds of the City of Virginia Beach.
Council Members present: John A. Baum, George R. Ferrell, J.
Henry McCoy, Jr., Councilwoman Meyera E. Oberndorf, J. Curtis
Payne, Roger L. Riggs, Vice Mayor Patrick L. Standing, and
Floyd E. Waterfield, Jr.
Council Members absent: Robert B. Cromwell, Jr., John R. Griffin,
and Mayor Clarence A. Holland.
ITEM #11296
The City Clerk read the following Notice of Special Meeting:
NOTICE OF SPECIAL MEETING
Notice is hereby given that there will be a Special
Meeting of the City Council of the City of Virginia Bea6h in
the City Council Chambers at 12:00 Noon on Thursday,
September 29, 1977, for the purpose of taking prompt action on.
bids expected to be submitted for the sale of twenty million
dollars in bonds of the City of Virginia Beach.
9 / 2 97 7
ITEM #11297
The City Clerk read the following letter from the City Manager regarding
proposed sale of $20,000,000 General Obligation Bonds for water and sewer
projects:
At 11:00 a.m. today, sealed bids were opened in my office
for the receipt of City Council's proposed sale bf $20,000,000
General Obligation Bonds for water and sewer projects. These
are part of the issue approved by voters on June 14, 1977. The
average net interest costs were as follows:
Northern Trust Company and Associates 5.095544%
The Chase Manhattan Bank and Associates 5.102300%
Morgan Guaranty Trust Company, Bank of
Virginia, Merrill Lynch, Pierce,
Farmer & Smith, Inc., and Associates 5.112000%
Harris Trust & Savings Bank and Associates 5.151800%
The sale of $20,000,000 of double barrel bonds is the
first true water and sewer bonds we have ever sold, which means
its main guarantee is from the users of the system. Even though
the double barrel effect insures a lower interest rate than a
pure revenue bond, it does not yeild the same low rate as a general
obligation bond because of longer maturity schedules. This is
necessary in order to have rates to the customers that are not
exorbitant. For instance, our general obligation bonds are classified
as 20-year bonds, however, they have traditionally had an average
life of 11 years. The water and sewer bonds are 25-year bonds and
have an average life of 16 years. Consequently, there is a minor
increase in the interest rate because of the longer period of pay-out.
The rate received today is a very favorable rate when compared with
the daily bond buyers' 20-year bond index. Today's rate is 5.50%
compared to the very favorable rate we have received of 5.0955%.
There is a market savinqs of 40 basis points. In essence, we were
able to "beat the market" for $1,301,620. This very favorable rate
is partly due to the Aa bond rating that the Council of Virginia
Beach has been able to maintain because of its conscientious fiscal
policies.
Northern Trust Company and Associates was the apparent low
bidder and all calculations have been reviewed by Mr. Giles G. Dodd,
Assistant to the City Manager for Finance and Research, and officials
of the firm of Wainwright and Ramsey. Certificate of calculations
is, therefore, confirmed and it is recommended that City Council
award the sale of the bonds to the firm of Northern Trust Company
and Associates.
yours,
an ury
r
9 / 2 9 / 7 7
- 3 -
ITEM #11298
On motion by Councilman Payne, seconded by Councilman Waterfield, and
by recorded vote as follows:
Ayes: Councilmen John A. Baum, Geor-,e R. 1errell, J. lienry McCoy,
Jr., Coun6ilwoman Meyera E. Oberndorf, J. Curtis Payne, Roger L.
Riggs, Vice Mayor Patrick L. Standing, and Floyd E. Waterfield, Jr.
Nays: None
Absent: Councilmen Robert B. Cromwell, Jr., John R. Griffin, and
@,layor Clarence A. Holland
City Council voted to award the sale of $20,000,000 General Obligation
Bo-,ids for water and sewer projects to Northern Trust Company and
A8sociates, at the average net interest rate of 5.095544 percent.
ITEM #11299
On motion by Councilman Ferrell, seconded by Councilman McCoy, and
by acclamation, the meeting adjourned.
Richard J. Wq@bon, City Clerk M@@or Clarence A. Holland, M-.D.
City of Virginia Beach,
Virginia
September 29, 1977
Special Meeting
9 / 2 97 7