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HomeMy WebLinkAbout1961-02-14; Municipal Water District; MinutesMINUTES OF AN ADJOUEWET) REGULAR MEETING OF BOARD OF DIRECTORS OF THE CARLSBAD MUMCIPAT, WATER DISTRICT HELD FeBRUkY 14, 1961 AT 11:OO A.M. AT 2698 STATE'STREET, CARLSBAD, CALIFORNIA: President Kelly called the meeting to order at 11:30 A.M. with Directors Carnohan, Coe, Greek and Maerkle answering roll call. Attorney Swirsky, Pipeline Superintendent Tuckc Mr. Guerin of Schwabacher and Co. and office secretary were also present. The president then announced that the notice of adjournment of the regular meeting of February 7, 1961 to this date, as required by Section 54955, Government Code, State of California, had been duly posted and the affadavit of said posting was to be made a pal of the records of the District. Office Statement Mr. Guerin of Schwabacher & Co. presented a preliminary draft of the I.P. No. 3 official statement for Improvement District No. 3. He said this had and the date to be sold as shown on the draft would be changed from February 28, 1961 t March 7, 1961. Mr. Guerin referred to the "Optional Maturity. Schedule" as shown on 'pages 3 and 4, and one page 2 "Maturities". Principal on bonds of this issue will be payable on March 1st of each year at the rate of $5,000.00 from 1966 through 1990 inclusive, and $675,000.0C in 1991. Exercise of the call procedure as set forth in detail elsewhere will material accelerate debt retirement, with the intended effect of an approximately level debt service schedule. In other words, the board would determine how much money is going to be required. Upon the sale of the bonds, the board shall ascertain the exact total for each fiscal year o a. Interest to be due on bonds outstanding in that fiscal year, computation of said interest to be based upon the assumption that bonds callable in a11 prior fiscal years have been retired; b. Fixed principal to mature in that fiscal year; c. Optional maturities as scheduled for that year. Haying made the foregoing determination, the board shall resolve, before delivery of th bonds, to establish for each fiscal year during which bonds of this issue are outstandi a tax rate which will require a levy of not less that 110% of the total of a,b, and c, when due, and redeeming the optional maturities as schedule, the 10% over-levy to con- stitute an allowance for tax delinquency. Ir. Guerin stated O'Melveny and Myers had been very cooperative in this maturity schedu they had recommended, but they still have some research to do before they can come up w the exact language the necessary Resolution will have to contain. They are being very cautious as this is new in the state of California. Mr. Guerin continued stating that they felt this would be more attractive to the bidder because they have pretty good assurance the average life of the bonds would be a lot shorter than the mandatory calls for and better than a straight level debt service. Th bidder has assurance in maturity plus a strong prospect that the term bonds would matur at the rate shown on page 3 of the draft: Mr. Guerin said in the event of hard times, tax collections are slow and the District i this event might not be able to retire bonds as fast as the schedule calls for, and mig be able to retire just the $5,000.00, but at any rate the District would not be in defa some token payment because of California law governing Municipal Districts. The attorney stated that on page 4 it was stated the board shall resolve before deliver of the bonds, to establish for each fiscal year during which bonds of this issue are ou standing, a tax rate which will require a levy of not less than 110%. He asked what th had in mind in the way of a Resolution. Mr. Guerin replied this 110% was pretty much up in the air but the substance of the Resolution would simply be to provide that the District would issue taxes in the necessary amount to be levied. I been run off before they knew of the postponement of the bond sale I above, for that fiscal year, for the purpose of meeting principal and interest requiren Be said they would haye liked to make the whole issue due in 1991, but there has to be I The attorney asked if they were accomplishing anything,by putting this out in this forn when this is actually the obligation of the board from a legal standpoint. Mr. Guerir replied itjwould accomplish -- 1. The bidder would be assured a tax would be imposed. 2. Also, the bidder would be put on welcome notice that the bonds, if monies in this amount is forthcoming, would be called at the rate listed on page 3. If the board does not go on record as intending to tax then the bidder can only assume that bonds will bc redeemed at the rate of $5,000.00 a year. The attorney stated in effect the board was obligated to set up a sinking fund. Wen 1 get ready to set the tax rate they will have to have funds on hand. Normally you run c year behind, which means in the beginning the tax rate will be a little higher to builc up a year’s reserve. The only thing the District can do over these first few years is the interest only, and no principal. Further discussion followed and Mr. Guerin stated they would like to see as many bids a possible. He said two months ago they would have had some real reservations these bond might not sell, but the market is in an improved trend and the fact this issue is for $800,000.00 instead of $1,000,000.00 made it more attractive, and using this maturity schedule he felt was more attractive then if it were handled in the usual debt se’mice sort of a way. The attorney called Mr. Guerin’s attention to paragraph headed ’‘Payment” as shown on pa 3. This should be Bank of America instead of Security Bank. Also, delivery date on pa 2 would be changed to April 7, 1961 instead of March 28, 1961 and sale date to March 7, instead of February 28, 1961 Upon motion of Director Maerkle, seconded by Director Coe and unanimously carried, it ‘c1 moved the draft as submitted by Schwabacher &.Co. be approved, subject to review and approval of the bonding counsel. The meeting was declared adjourned at 1:lOP.M. /-I I 1 ~SBAD MUNICIPAL W&CER DI RICT P ATTEST : ,/I ’ , / ./ A,’ .. *,<” c-si.”-i-”(’ $/< , i”<- Secretary of the Board of Directors CARLSBAD MUNICIPAL WATER DISTRICT c I