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City Council Regular Meeting Minutes 05 <br /> May 11, 2004 <br /> Page 5 <br /> 1 called back indicating a mistake was made and asked if a solution could be discussed. He stated <br /> 2 UMB Bank was advised that Ehlers had no legal ability to bring a solution and the only option <br /> 3 would be to present the request to Council. He noted Ehlers did have UMB Bank submit a letter. <br /> 4 explaining the problem and giving reasons why this should be renegotiated. He explained <br /> 5 Council could reject this bid and authorize Ehlers to rebid or negotiate. <br /> 6 <br /> 7 Mr. Prosser indicated rejecting the bid was not recommended; however, as this was a good bid. <br /> 8 He noted UMB Bank would need to forfeit the bid bond if they withdrew the bid. He explained <br /> 9 rejecting the bid put the City in the position of having to go back to the marketplace to negotiate, <br /> 10 adding it would also undermine the competitive process. He indicated the coupon interest rate <br /> 11 was approximately 1% lower than anticipated because of the error and the interest savings for the <br /> 12 term of three years would be approximately$40,000. <br /> 13 <br /> 14 Mr. Prosser stated he also wished to address the credit rating report,noting Moody's reported a <br /> 15 strong rate of growth in market value within the St. Anthony Village community. He explained <br /> 16 part of the reason was the redevelopment projects, along with the City's maintenance of good <br /> 17 fund balances. He indicated the City was finding a way to fund services within the community, <br /> 18 along with taking action to sustain a balanced budget, despite State cutbacks. He added the <br /> 19 City's overall debt level was also less than average and advised that staff be commended for this <br /> 20 good credit rating. <br /> 21 <br /> 22 Councilmember Faust asked if the choices were the following: The bank made an error and <br /> 23 Council could "let them off the hook"and rebid, which would cost the City money, or Council <br /> 24 could accept the bid and the bank would have to pay to back out of the transaction. He <br /> 25 questioned who would receive the money paid by the bank. City Attorney Gilligan responded <br /> 26 the City had the bid bond and would collect approximately 2% of the bid on the bond, after <br /> 27 which the City would have to go back and rebid. <br /> 28 <br /> 29 Mayor Hodson asked if the next lowest bid could be accepted. Mr. Gilligan responded the City <br /> 30 would have to reject all bids; however, it could negotiate with the other bidders. Discussion <br /> 31 followed. <br /> 32 <br /> 33 Councilmember Faust stated, in his opinion, the City's hands were tied because UMB Bank was <br /> 34 the low bidder. He indicated the City could readvertise in good conscience if the bank forfeited <br /> 35 at this point. <br /> 36 <br /> 37 Mr. Gilligan stated he suspected the bank would go through with the transaction for the sake of <br /> 38 its name if the City accepted the bid. <br /> 39 <br /> 40 Councilmember Stille noted $40,000 was represented and, hopefully, the bank would just accept <br /> 41 Council's approval. Mr. Gilligan responded he anticipated it would. <br /> 42 <br /> 43 Councilmember Horst asked if the City would be facing higher interest rates if it had to rebid at <br /> 44 this time. Mr. Prosser responded he thought it would, as the interest rates were trending upward. <br /> 45 <br />