pages: CityCouncil/2021-10-19.pdf, 22
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CityCouncil | 2021-10-19 | 22 | Councilmember Knox White stated that his understanding is Council needs to authorize staff to move forward through the process laid out on page 41 of the presentation; the process is four to six months; Council may provide direction during that time; he agrees and has questions which should come back, including policy recommendations about the sinking fund; he would like to ensure that Council is being asked to start the process and provide direction as to what should come back for discussion as part of the process before voting to authorize any bonds. In response to Mayor Ezzy Ashcraft, the City Manager stated the current matter is the first step; staff will have to return to Council before bonds are issued; Council is not be able to issue bonds under the current action; the Official Statement has to return to Council as a step in the process; additional steps are included on page 34 of the presentation; this step is critical in the process and needs to be taken prior to other steps over the next four to six months; a delay is fine; however, an interest rate risk is associated. Mayor Ezzy Ashcraft inquired whether or not the City Auditor and Treasurer were consulted. The City Manager responded there have been brief discussions; neither has been fully involved with the matter. Mr. Morales stated every day of delay is costing roughly $30,000; the current matter does not necessarily approve anything; legally, staff has to come back to Council to approve the offering document, known as the Official Statement; approving the first step will save the City money; there is time to put on workshops, ask questions and perform analysis; he has more than enough time and ability to answer almost every question raised. Mayor Ezzy Ashcraft stated Council can proceed on more than one front at the same time; inquired whether the City Attorney is in agreement about the four to six months court validation process. The City Attorney responded it is difficult to predict litigation timelines; stated that he does not want to predict timelines in open session; staff is happy to discuss the matter privately in Closed Session. The City Manager outlined the current estimated debt service under the assumptions in the presentation; stated the debt service is projected under the interest rate of 3.3%; outlined budgetary savings and UAL costs; stated his recommendation is not to spend all the savings and have Council set aside up to 50% of the money; staff will have to bring back a process to set aside any money; over two to three years, any volatility or risk associated would be solved through the sinking fund; if Council sets aside $4 to $5 million per year, the City would have $10 to $15 million in the first three to four years to mitigate against any downsides of investment risk. Mayor Ezzy Ashcraft outlined rating agencies taking a neutral position on POBs; stated agencies are taking the time to study pension liabilities and understand the risk of POBs; inquired the risks Council should be aware of. Mr. Morales stated most of the risks have been addressed through the systematic process; the risk of investment is not germane to POBs; ARPA funds cannot be used on pension obligations; Regular Meeting Alameda City Council 21 October 19, 2021 | CityCouncil/2021-10-19.pdf |