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City Council Meeting Minutes

November 22, 2011

 

CALL TO ORDER:  City Council convened in a Special Session on November 22, 2011 at 7:08 p.m. in Council Chambers, 1 Marketway West, 3rd Floor, York, PA, to consider adoption of Bill No.'s 39 and 40 regarding bond issues, with the following Council members present: Renee S. Nelson, Henry Hay Nixon, Toni Smith, Carol Hill-Evans, Vice President, and Genevieve H. Ray, President, with President Ray presiding. 
 
Members of the Administration in attendance included: Jim Gross, Director of Public Works, and Michael O’Rourke, Business Administrator. Also present was Steve Hovis, Bond Counsel, Stock & Leader, and Brad Remig, Financial Advisor, Public Financial Management.
 
Members of York City Council staff in attendance included:  Dianna L. Thompson, City Clerk.
 
Pledge of Allegiance: The Pledge of Allegiance was recited. 
 
NEW BUSINESS
 
The following Bills were to be considered for passage:
 
  • Bill No. 39, (View) A Bill authorizing a General Obligation Bond in the amount of $5 million for capital projects and note refunding.
 
  • Bill No. 40, (View) A Bill authorizing a General Obligation Bond in the amount of $29,985,000.00 for financing various capital projects.
 
President Ray announced that city officials were notified today that Wells Fargo and their Counsel reviewed their Bond Purchase Agreement. Wells Fargo has taken the stand that they are uncomfortable with serving in the role as underwriter for the bonds and is unwilling to provide a contract to underwrite/sell bonds issued by The City of York. Due to these events, Council will not consider passage of Bill No. 39 or 40 but will instead continue tonight's meeting to Wednesday, November 30, 2011 at 4:30 p.m. Council hopes that at that time a new underwriter will be secured.
 
Brad Remig, Public Financial Management, City's Financial Advisor, briefly explained that on November 7th when discussing projects, the city needed to go through the credit rating process. At that time the city's rating was BBB (stable outlook). However, as of November 21st, Standard and Poor's downgraded the city's rating to BBB negative (negative outlook). However, we are still in the investment grade category. This downgrading is what prompted Wells Fargo to relinquish interest in serving as the city's underwriter for the bond issues. Mr. Remig said they are currently seeking another underwriter and are in discussions with M&T Bank. Although there is no final set of facts, the new yield rating is up 1.16.
 
Attorney Steve Hovis, Bond Counsel, Stock & Leader, outlined the bond structure and said they structured the bond to allow flexibility to attract investors. He said it is important that the city take actions to better its credit rating.
 
Council took this opportunity to discuss at length each project listed under the $5 million bond and opted to take a preliminary vote on which projects Council wishes to fund. The following projects were individually discussed:
 
Project 1: New City Hall (101 S. George St.)
Project 2: Improvements to New City Hall moving (101 S. George St.)
Project 3: Improvements to City Hall (Funded by Interim Financing)
Project 4: Community Centers
Project 5: Sewer Authority Project (Poor House Run)
Project 6: Northwest Triangle Final Acquisition
Project 7: Northwest Triangle Sewer Line
Project 8: City of York General Authority (Fulton Bank Loan to buy back parking system & Payoff Peoples Bank)
Project 9: Market Street Two-Way
Project 10: Guaranteed Energy Savings Program
Project 11: York City Ice Arena (Refinancing)
 
Business Administrator O'Rourke objected to trimming the bonds or its projects because the budget was balanced based on these bonds, projects, and funding streams. He said if cut, there will be repercussions that could potentially have us looking at over a million dollar shortfall, which could result in even higher taxes because we must make up for that shortfall somewhere. 
 
After discussion and hearing comments and suggestions from the public, Council persons Ray, Nelson and Hill-Evans were in favor of trimming the bonds with Council persons Nixon and Smith instead supporting the recommendations of the Administration.
 
There being no further discussion, a motion was made by Nelson, seconded by Hill-Evans, to finance projects 1-7 and 10 through a bond or note. The motion passed by the following vote: Yeas – Nelson, Hill-Evans, Ray – 3; Nays – Nixon, Smith – 2.
 
ADJOURNMENT: There being no further discussion, at 9:27 p.m., President Ray continued the meeting to Wednesday, November 30, 2011 at 4:30 p.m. in City Council Chambers, 1 Marketway West, 3rd Floor, York, PA.