pages: CityCouncil/2010-06-15.pdf, 14
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CityCouncil | 2010-06-15 | 14 | Mr. Thimmig responded the proposed resolution has a minimum interest rate; holding the deal hostage for one property owner would not be a good idea; the deal has protections; any land secured financing is unique. Mayor Johnson inquired what is the maximum interest rate in the resolution, to which Mr. Thimmig responded 7%. Mayor Johnson inquired whether going forward if the interest rate is 7% would make sense, to which Mr. Thimmig responded probably not. Mayor Johnson stated that the maximum interest rate should be lower. Mr. Thimmig stated parameters are usually given; typically, he does not micro manage; staff would be delegated to ensure that bids are appropriate and at market rate. Mayor Johnson stated ensuring that the issue makes financial sense is important because of the cost; inquired whether Mr. Reynolds has been under contract with the City for twenty years. Mr. Reynolds responded that there is no retainer; stated that he receives fees if financing closes; he has worked on the ARRA twelve-year plan and has been paid on an hourly basis with a cap. Vice Mayor deHaan inquired what was the original rating of the bonds, to which Mr. Reynolds responded the bonds were unrated. Speakers: Lonnie Odom, Stinson Securities LLC; and former Councilmember Tony Daysog, Alameda. Following Mr. Odom's comments, Councilmember Gilmore stated WCH is not mentioned in the APFA resolution, only Sequoia Financial Group; both firms have been mentioned in the staff report; inquired whether not mentioning WCH is an error. Mr. Thimmig responded WCH is a co-financial advisor; State law will not allow WCH to be an underwriter without the expressed permission of the APFA, which is not included in the resolution. Following former Councilmember Daysog's comments, Mr. Reynolds stated the underwriter's discount is about $12.50 [per $1,000], which works out to be about $325,000; of that [$325,000], the portion that would normally be the management fee is about $6.80 [per $1,000], which is the 70% of the financial advisor fee that WCH would get that would not be in the $325,000 making the figure not $12.50 [per $1,000] anymore, rather it would be more like $5.00 [per $1,000] and the total ends up slightly less. Councilmember Gilmore requested that Mr. Reynolds clarify his explanation. Regular Meeting Alameda City Council June 15, 2010 | CityCouncil/2010-06-15.pdf |