Agenda Packets - 1983/10/24 - Laserfiche WebLink

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MEMO TO: Mayor. and CounciI / L �0/' FROM: Finance Director -Treasurer ^ DATE: November 3, 1983 RE: Financial Consultant Proposals After the presentation of the Special Assessment Debt Service Study by DeLaHunt Voto and Company, Council directed staff to discuss the possibility of a cash defeasance of the bonds in the Improvement Bond Redemption Fund with financial consulting firms and to receive from them proposals for financial consulting services. Two meetings were held with the following firms: 1. Miller and Schroeder Municipals, Inc. 2. Juran and Moody, Inc, 3. Public Financial Systems 4. Springsted, Inc. At the first meeting, the Debt Study was discussed and each firm received a copy of the report. Firms were advised that the city was seriously investigating the possibility of defeasance, as outlined in the study, and that the city was requesting written proposals on defeasance and financial consulting services. A second meeting was held with each firm to receive and discuss their proposals. Two firms, Miller and Schroeder Municipals, Inc. and Juran and Moody, Inc. did not present written proposals for defeasance as requested. Instead, they made verbal presentations. We, therefore, did not give their proposals serious consideration and would recommend that Council consider only the proposals of Springsted, Inc. and Public Financial Systems. Both Springsted, Inc. and Public Financial Systems stated that a cash defeasance of the bonds in the Improvement Bond Redemption Fund was feasible. There was also agreement that the benefit to the city was directly proportional to the interest rates available on investments the City is permitted by law to make. Based upon the Springsted, Inc. analysis, the total investment required for a defeasance would be $2,599,341 which would result in approximately $850,000 of excess money in the Improvement Bond Fund. The analysis of Public Financial Systems indicated that the total investment required for a defeasance would be $2,589,050 which would result in approximately $860,000 of excess money in the Improvement Bond Fund. Each firm was quick to point out that their analysis was based upon interest rates available at the time their analysis was performed and that actual results would be of greater or lessor amounts depending upon the interest rates availablet at the time a defeasance was actually performed. Public Financial Systems estimates total costs for defeasance to be $10,000 - $15,000. Their fee would not exceed $2,400. Springsted, Inc. estimates total costs for defeasance to be $10,000 - $15,000. Their fee would not exceed $5,000.