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HomeMy WebLinkAboutMinutes 1986-06-18 ACOUNTY SANITATION DISTRICT NO.2 OF ORANGE COUNTY,CALIFORNIA MINUTES OF ADJOURNED REGULAR MEETING June 18,1986 —6:30 P.M. 10844 Ellis Avenue Fountain Valley,California Pursuant to the adjournment of the regular meeting of June 11,1986,the Board of Directors of County Sanitation District No.2 of Orange County,California met in an adjourned regular meeting at the above hour and date in the Districtst Administrative Offices. The Chairman called the meeting to order at 6:30 p.m.The roll was called and the Secretary reported a quorum present. DIRECTORS PRESENT:Richard Buck,Chairman pro tern,Todd Murphy,James Neal,Carrey Nelson, Chris Norby,Bob Perry,Don Roth,Don Smith,Dorothy Wedel DIRECTORS ABSENT:Dan Griset,Carol Kawanarni,Roger Stanton STAFF MEMBERS PRESENT:J.Wayne Sylvester,General Manager, Thomas M.Dawes,William H.Butler, Rita J.Brown,Gary Streed OTHERS PRESENT:Thomas L.Woodruff,General Counsel, Director Don Griffin,Director Peer Swan, Lora Stovall,Ed Long,Alan Watts ************* Report,discussion and actions Chairman pro tern Buck reported that the re long—term debt financing for purpose of this adjourned meeting was to funding capital construction review and give further consideration to projects the alternative of partially funding the District’s long—term capital construction program needs by issuance of tax—exempt certificates of participation,as discussed at the regular meeting of the Board on June 11. The Director of Finance then reviewed the five and ten—year fiscal projections of the District based upon two sets of assumptions for the Joint Works Master Plan sewerage facilities construction program requirements and the supplemental financial information which had been provided to the Directors.He also reviewed the alternative financing methods for funding District operations as well as the capital expansion program,including ad valorem taxes,user and connection fees, federal and state construction grants,use of existing reserves and long—term debt financing,the anticipated time frame in which alternative funding sources would be required to be considered by the Board and the legal and procedural requirements for implementing the various financing alternatives. Ms.Lora Stovall of Bartle Wells,Districts’financial consultant,then reviewed financial projections prepared by her firm reflecting District’s fiscal position with and without issuance of long—term debt securities,and the impact on the District’s position by issuing debt securities. 06/18/86 The Board then entered into a lengthy discussion on the relative.merits of issuing tax—exempt certificates of participation to partially fund the District’s share of joint works capital construction requirements,including the advantages and disadvantages of fixed—interest rate versus variable—interest rate securities and the potential for increased investment returns based upon the spread between the District’s investment earnings on reserve funds and the currently lower interest rate for variable rate debt. It was then moved and seconded that the Board declare its intent not to proceed at this time with issuance of tax—exempt certificates of participation to partially fund the District’s share of joint works sewage facilities requirements. Following further discussion of the District’s funding requirements and the advantages and disadvantages of issuing long—term debt securities at this time because of the impending sunset of existing federal tax laws that are favorable for tax—exempt financing,the scheduling required to do so prior to the September 1st deadline,the use of District’s existing construction reserves;and the source of funds for retiring debt,the vote was polled by roll call and the Secretary reported that the motion had failed. It was then moved,seconded and duly carried: That the financial consultant,bond counsel and staff be,and are hereby, directed to proceed with planning and preparation of necessary contracts,legal opinions,official statements and related documents required to prepare for issuance of tax—exempt certificates of participation to partially fund the District’s share of joint works sewerage facilities prior to the September 1, 1986 deadline. It was then moved that the financial consultant and bond counsel be directed to proceed with planning of issuance of variable interest rate certificates of participation.The motion failed for lack of a second. Following further discussion on the advantages and disadvantages of fixed interest rate versus variable interest rate debt securities,it was moved, seconded and duly carried: That the financial consultant and bond counsel be directed to proceed with planning for issuance of tax—exempt certificates of participation on a fixed interest rate basis. Adjournment Moved,seconded and duly carried: That this meeting of the Board of Directors of County Sanitation District No.2 be adjourned.The Chairman then declared the meeting so adjourned at 7:53 p.m., June 18,1986. Secretary,Boa~d of Directors County Sanitation District No.2 of Orange County,California —2—