03-11-1993 Regular Meeting14ARCH 11, 1993
The Downtown Smyrna Development Authority met March 11, 1993 at City Hall. The
meeting was called to order at 7:00 p.m. by Chairman A. Max Bacon.
Present for the meeting was:
Willouise Spivey
C. J. Fouts
Hubert Black
Doug Stoner
Jimmy Wilson
Absent:
Jim Pitts
Steve Shupert
Also present was Councilman John Patrick, Councilman Ron Newcomb, Councilman Bill
Scoggins, Councilman Jim Hawkins, Councilman Jack Cramer, Councilman Wade
Lnenicka, Councilman Pete Wood, City Clerk Melinda Dameron, City Administrator
Bob Thomson, City Attorney Chuck Camp, Al Cochran, Finance Director Jim Triplett,
Ben Watkins of Sutherland, Asbill & Brennan and Gordon Mortin of Lex Jolley &
Associates.
Mr. Watkins, Sutherland, Asbill & Brennan, discussed the lowered interest rates
and the benefits of refinancing the outstanding bonds on the Community Center and
the Library. He reviewed the two separate bond issues in 1989 and 1990 to
finance the new facilities. He indicated that the interest rates on the tax
exempt market have dropped to make it advantageous for the Authority to go into
the market and issue refunding bonds. The schedule was accelerated in order to
lock into the low interest rates that are now available. The present value
interest rate savings that were achieved on the marketing of the bonds yesterday
was a gross savings of $1,166,858 and a present value savings of $711,000
essentially. The gross interest rate savings is $1,167,000 between now and the
year 2016 which is the year when the last bonds are retired, Smyrna will save
$1,167,000 by doing this refinancing.
Gordon Mortin, Lex Jolley & Associates, explained the transactions being moved
ahead of schedule has been an extraordinary effort on the part of the City staff,
Ed Wall and Ben Watkins. He informed the DDA that Moody's of New York released
and confirmed the A-1 rating which is an excellent rating. The bond issue size
is $11,985,000, the underwriters discount is $119,850, the original issue
discount is $132,000; the bond issue will close on the 13th of April but the
bonds are dated March 1, 1993, consequently there is $74,000 in interest that is
accruing from the 1st of March but you don't have the benefit of the bonds or the
refunding so for that period of time we are going to pay to you the interest that
is accruing on the bonds so that the City does not actually start incurring a
cash interest liability until the 13th of April. He then indicated that the
proceeds from the bonds will be paid to the DDA to put in the sinking fund for
the bonds towards the next interest payment. Mr. Mortin then indicated it will
be necessary to purchase escrow investments, which is a portfolio of U.S.
Treasury Securities, which will pay the interest on the bonds that we are
refunding until the bonds are called and the first call date is 1999. The total
bond issuance cost is $120,000 giving a total bond issue proceeds of
$11,806,736.15; the total savings from this is $1,166,858.75. He stated this
represents a reduction in debt services for Fiscal Year 1993 of $183,955 and then
approximately $40,000 a year thereafter.
Mayor Bacon thanked the staff of Lex Jolley & Associates for the work they have
performed on this issue.
Jimmy Wilson made a motion to adopt the bond resolution as presented tonight.
Hubert Black seconded the motion. There was no further discussion. The motion
was approved 5-0.
Mayor Bacon then adjourned the DDA meeting at 7:20 p.m.