Minutes 01/22/1985 - Laserfiche WebLink

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i~ Ul' ..0 TUESDAY JANUARY 22, 1985 consensus of opinion among members of Council appearing to favor a fixed-interest rate on the bonds to be offered for sale (rather than a variable rate which might be either advantageous or disadvantageous to the City, depending upon future economy conditions), Councilman Oakes offered his motion, seconded by Councilman Groden, that Council accept Patrick Henry National Bank's proposal of ten-year bonds at a fixed annual interest rate of 8%% (with fixed annual payments over the ten years of $205,750.00 for principal and interest). After some discussion which reflected members' concerns should adverse cir- cumstances develop, on a roll-call vote the motion was carried unanimously, after which Mayor Cole expressed the Council's appreciation to the local banking community for their interest and assistance in this matter. Subsequently, Mr. Bruce Valley, Vice-President & Comptroller of Piedmont Trust Bank, pointed out that one of the proposals, in which Piedmont Trust Bank was a participant, offered fixed annual debt service payments of $204,000.00 over a period of ten years and three months, with option of monthly payments instead of annual payments and with the possibility, contingent upon market conditions and interest rates in the future, of the debt service (i.e., interest requirements) being less, in which event Mr. Valley maintained that this proposal would be the better choice. At this point in the meeting, at Council's request, Mr. Howe and his associates reviewed and compared this proposal with that already accepted and concluded that, with certain assumptions, the fixed rate of $204,000.00 per year for (ten years and three months) over Patrick Henry National Bank's fixed rate of $205,750.00 per year would cost the City an additional $50,000.00. Meanwhile, Mr. Howe pointed out that at the beginning of his pre- sentation at this meeting he had recommended acceptance of a twenty-year proposal. Sub- sequently, in response to an inquiry, Mr. Worth Carter, of Patrick Henry National Bank, indicated that he would be agreeable to monthly debt service payments being made (instead of annual payments) under the proposal already accepted by Council, if Council so elects, thereby reducing the City's total interest cost over the life of the bonds. Council then affirmed the action previously taken and, to implement this action, unanimously (and by roll-call vote) adopted the following ordinance authorizing the City to issue and sell