Council Meeting - February 19, 2013

Work Session

Mark Edminster presented a proposal from Wells Fargo to refinance the existing utility revenue bond. Currently has interest rate of 5.99%. Willing to refinance at 2.61% for seven years on outstanding balance of $845,000. The current bond is not callable until March of 2019 so we can’t refinance with any other bank until that time. The current average annual debt service on this bond is $80,663. The refinance scenarios and projected savings are:

• 7-year fixed rate option with 10-year maturity and level annual debt service
• Net Present Value savings: $182,404 (22.41%)
• Average increased annual debt service for first 7 years - $15,622.
• 7-year fixed rate option with 7-year maturity and level annual debt service
• Net Present Value savings: $167,035 (20.50%)
• Average increased annual debt service - $51,944.

Mark sent Wells Fargo a list of eight questions that need clarification before moving forward. Mark feels much of their letter was a boilerplate template so some of this may not apply to this refinance. The current wording states there is a mandatory payoff after seven years, so he is asking about that. If there isn’t a mandatory payoff then there is the risk of not knowing what the interest rate will be in seven years. Charl said if the interest rate was too high in seven years then we could pay off the bond with money in the capital projects funds. Right now we pay $80,663 each year on this debt. If we pay it off in 10 years then we would save the extra 6 years of $80k payments that we are now planning to make as payoff isn't until March 2029. Mark recommends we pursue it to see where it leads and we can make final decision once all questions are answered. It doesn't cost us anything to pursue it. Mayor Gygi has asked Mark to go back to Wells Fargo to see if they would be willing to do a fixed rate for 10 years instead of seven. CM Zappala expressed concern over speeding up payoff. Utility bonds are generally setup over a 20 year span so that residents who live in the City over that 20 year period are helping to pay for it. If we speed it up to 10 years then residents living in the City over 10 years are paying for all that infrastructure and residents moving in after that don't pay for any of it. CM Jackman was concerned as to why we are looking at this again as last year we had decided not to do this as we didn't want to raise utility rates any more than we already are to cover O&M costs. Council agreed that Mark could continue to work with Wells Fargo to get questions answered but no approval will be given at this time to refinance until we get these answers.

Council Meeting

Public Comment

Suzy Butler – Says she was told the City was going to get better insurance to cover sewer backup. She wants to know what recourse the City has and wants to know how she is going to be protected. Mayor Gygi explained we are currently looking at other insurance companies. Families involved are putting together a formal appeal which they will present to the City, asking to be reimbursed for damages. 

GFOA Distinguished Budget Award

From our press release - On February 19, 2013 the Government Finance Officers Association presented the City of Cedar Hills with the GFOA’s Distinguished Budget Presentation Award. Finance Director Charl Louw was also presented with a Certificate of Recognition for Budget Presentation as the individual primarily responsible for having achieved this award.

According to the GFOA, the award “reflects the commitment of the governing body and staff to meeting the highest principles of governmental budgeting.” This is the 11^th year that Cedar Hills has received this award. In order to qualify, the City had to satisfy nationally recognized guidelines for effective budget presentation. The budget documents submitted are evaluated separately by three reviewers. Each reviewer rates each budget document as being not proficient, proficient, or outstanding in regard to 27 specific criteria, grouped into four basic categories. To receive the award, a budget document must be rated either proficient or outstanding by at least two of the three reviewers for all four basic categories, as well as for 14 of the 27 specific criteria identified as mandatory.

“We wish to thank Mr. Louw and our entire financial team for performing all of the work required to obtain this prestigious award,” stated Mayor Gary Gygi. “We are lucky to have excellent people working for the City and are happy they are being recognized for their hard work and dedication.”

The Government Finance Officers Association is a nonprofit professional association serving over 17,500 government finance professionals throughout North America. The GFOA’s Distinguished Budget Presentation Award is the only national awards program in governmental budgeting.

Discussion on Manila Sewer Back-up

The City had a sewer line backup on December 13^th due to vandalism. Three homes were affected. The City submitted a claim to the insurance company, which was denied. The City appealed this decision, which was also denied as the insurance company stated “This claim relates to damage to homes resulting from vandalism of the City’s sewer system. According to the facts you have given us, the damage sustained by these residents was not caused by any act or failure to act on the part of Cedar Hills – it was caused by third parties. The residents whose homes were damaged cannot prevail on a claim against the City because the City is not liable for the damages the residents sustained. Because the City is not liable for the claims, we cannot extend coverage beyond the no-fault coverage limits we have already paid.” Each of the affected households received $5,000 from the trust as part of our no-fault coverage but this does not cover the loss for each house. We are now appealing to the Board of Directors. Appeal will be on March 22nd.  AFPD is also currently investigating this vandalism.

Review/Action to Approve Wells Fargo Utility Bond Refinance

See my notes above during work session. We have asked Mr. Edminster to continue to work with Wells Fargo but are not approving a refinance at this time.

City Reports

David Bunker - Resident has approached staff about doing a development on the south end of the City. David will continue to work with him and provide updates to us. Attended State Records Committee hearing last week and committee ruled unanimously in our favor.  LPPSD meeting this week on recent study they had done. Had some discussions on PG 4000 N. sewer line and working on potential agreement to present to the Council.

CM Zappala - Emergency Preparedness townhall this Thursday. Met with Dax and David to review Parlant system and will do demonstration on Thursday. Will also do presentation on how to follow us on Twitter and Facebook.

CM Jackman - LPPSD has board meeting next week. Budget is continuing to move forward.

CM Augustus -  North Pointe Solid Waste sent info on subgroups such as policies and procedures. Trent will work on this.

CM Martinez – For Family Festival she is working on creating a community committee. YCC working on fundraising activities. YCC reviewed ordinance and discussed things that need to be updated or changed. Talked about ways they can work with the Council with regards to issues the youth face. YCC is also now stuffing Easter eggs for hunt. PTBR committee will be meeting on Thursday.

CM Rees - Two press releases issued, working on three more. PTBR will be working on updated master plan for parks and trails.

Discussion on Family Festival

New dates are June 3 - 8th. Quincy Lewis will be the grand marshal. Adding food trucks, such as Waffle Love and Poji Grill (pizza). 20 sign-ups for parade already. Harts will be title sponsor. Working on Family Festival committee like Pleasant Grove does. Not sure when fun run will be. Seven businesses have already committed to sponsor. Budget this year is $40,000, last year we spent $43,000 so will work to stay within budget. Greg will work with the carnival company to get better rides (not so many spinning rides). Reaching out to National Guard on participating in parade and possibly sponsoring a rock wall. In the future we need to find out when other cities have their festival so we can try to plan our Festival later, such as July.

Review/Action on Social Media Use Policy

The policy establishes a set of rules to guide communication from the City to residents via social networking sites, such as Facebook and Twitter. It was unanimously approved.