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Home My WebLink About10-25-2010 Regular MeetingPublic Meeting Notice Committee: Fairhope Financial Advisory Committee Date & Time: Monday, October 25, 2010 at 4:45 p.m. Place: Delchamps Room 161 North Section Street Subject: See Posted Agenda Notice must be stamped, dated and initialed before posted on bulletin board. POSTED City of Fairhope Financial Advisory Committee Agenda -Monday, October 25, 2010 4:45 p.m. in the Delchamps Room City Hall -161 N. Section St., Fairhope, AL 1. Approval of Minutes for September 27 , 2010 . 2 . Review of cost reduction projects , as follo w -up from May 17 City Council Workshop . 3. Cost reduction opportunity of refinancing certain General Fund and Utilities Funds debt. 4. Review of Closing Schedule and Year-end audit schedule for FY2010 . Schedule Of Future Meetings (Note: Regular meetings are on the 4th Monday of each month at 4:45 p.m. in the Delchamps Room at City Hall, 161 N. Section St., Fairhope, AL.) • Next regular meeting: Monday, November 22 , 2010 City of Fairhope Financial Advisory Committee Agenda -Monday, October 25, 2010 4:45 p.m. in the Delchamps Room City Hall-161 N. Section St., Fairhope, AL 1. Approval of Minutes for September 27, 2010 . 2. Review of cost reduction projects, as follo w -up from May 17 City Council Workshop. 3 . Cost reduction opportunity of refinancing certain General Fund and Utilities Funds debt. 4. Review of Closing Schedule and Year-end audit schedule for FY2010 . Schedule Of Future Meetings (Note: Regular meetings are on the 4th Monday of each month at 4:45 p.m. in the Delchamps Room at City Hall, 161 N. Section St., Fairhope, AL.) • Next regular meeting: Monday, November 22, 2010 STATE OF ALABAMA COUNTY OF BALDWIN )( )( The Financial Advis ory Committee met at 4 :45 p.m., City Hall , Delchamps Room, 161 North Section Street, Fairhope, Alabama 36532 , on Monday, 25 October 2010. Present were: Chuck Zunk, Chairman Members: Stan Grubin, Mac Mccawley, Marvin Wilder, John Brown, and Mayor Kant. Ex-Officio Members : Dan Stankoski , Lonnie Mixon, and Rick Kingrea. Debbie Quinn and Mike Ford were absent. Chuck Zunk called the meeting to order at 4:45 p.m. He announced that the fir st item is to approve the minutes from the September 27 , 2010 Financial Adv isory Committee meeting. Marvin Wilder moved to approve the minutes from the September 27 , 2010 Fairhope Financial Advisory Committee meeting. Seconded by Stan Grubin , motion passed unanimously by voice vote . Mr. Zunk announced that Dick Kwapil had submitted a letter a resignation as a Financial Advisory Committee member; and stated we may be looking for a replacement in the near future. The next item on the agenda was the review of cost reduction projects , as follow-up from May 17, 2010 City Council Work Session . City Administrator G regg Mims said there was only one item to mention today . He said that the Water & Sew er Department normally flushes fire hydrants which this ta sk is time consuming and the department works overtime to complete. This year Dan McCrory, Water & Sew er Superintendent, had help from the Public Works Department, Electric Department, and the Fairhope Volunteer Fire Department. This saved appro x imately $35 ,000 with no overtime and completion two weeks early. The next item on the agenda was the Rev iew of Closing Schedule and Year-end audit schedule for FY2010 . Rose Fogarty, Financial Reporting Manager, discu ssed the preliminary year-end financial statement. Ms. Fogarty stated a final y ear-end financial statement should be out by January 28 , 2011. Mayor Kant briefly di s cu ss ed the proces s . Financial Advisory Committee Monday, 25 October 2010 Page-2- The cost reduction opportunity of refinancing certain General Fund and Utilities Funds debt was discussed next. Mr. Zunk mentioned this was an opportunity to save $40,000 a year on the General Fund and $30,000 a year on the Utilities Fund. Bob Young with Frazier Lanier Company, Inc. explained the General Obligation Warrants Series 2010 and the Utilities Revenue Warrants Series 2010-A. Mr. Young said it would take approximately five to six weeks to have an official statement to present. He said the City needs to look at its Capital Improvements list and decide what else, if any, needs to be financed. Mayor Kant suggested pulling out $1.0 million from savings and put towards the General Fund. After further discussion, Stan Grubin moved to recommend to the City Council to commission the Frazier Lanier Company Incorporated and Bradley Arant Boult Cummings, LLP in connection with the proposed issuance by the City of Fairhope of its Utility Revenue Warrants , Series 2010-A and the General Obligation Warrants, Series 2010. Seconded by Marvin Wilder, motion passed unanimously by voice vote. John Brown moved to adjourn the meeting . Seconded by Marvin Wilder, motion passed unanimously by voice vote . There being no further business to come before the Financial Advisory Committee, the meeting was duly adjourned at 5:10 p .m. City of Fairhope Revenue & Expense Summary September 2010 Gas Fund Revenue Cost Gross Profit Expe nse Operations Earnings (Loss) Transfers to Other Funds Net Earnings (Loss) Electric Fund Revenue Cost Gross Profit Expense Operations Earnings (Loss) Transfers to Other Funds Net Earnings (Loss) Wat e r Fund Revenue Cost Gross Profit Expense Operations Earnings (Loss) Tra nsfers to Other Fund s Net Earnings (Loss) Sewer Fund Revenue Cost Gross Profit Expense Operations Earnings (Loss) Transfers to Other Funds Net Earnings (Loss) General Fund Revenue Expenses Excess Rev . Over Expenses I /J/ d s/ .:101 I) f etll J.J I Nf.\R.J.{ 1 t r;#~ ltl 7)o£s /\)t7( !NCLuoi AlL A:!C.i!J.JPl5 fo£ R_c-✓1€uJ />r)R_ftJS r;c_;, OJJl'f -----------------MONTH ----------------- FY 07 -08 FY 08 -09 503,121 409,106 209,864 73 414 293,257 335,692 236,019 278 627 57,237 57,065 25,193) 150,000 82,430 92,934) 1,952,768 1,273,280 679,488 543,043 136,444 280,370) 416,814 1,938,584 1,020,617 917,966 436,148 481,817 500,000 18,182) FY 09 -10 522,692 96 856 425,836 238,931 186,904 149,388 37,515 2,231,179 1,177,589 1,053,590 469,090 5 84,49 9 136,413 448,086 522,800 28,146 494,653 263,254 231,399 366,868 135 ,468) 301,502 33 468 268,033 280 870 12,837) 12,837) 3,584,869 5,731 ,832 1,720,458 1,859,664 5,056,499 1,932,710 1,725,205 675,332 212,251) ,tl,OJ( 51.J µ II.Ab( VJUS{l l{t)VT5 -------------YEAR TO DATE FY 07 -08 7,851,431 4,162,256 3,689,174 2,547,234 1,141 ,940 827 307 314,633 17,859,547 11,484,321 6,375,226 4,579 ,022 1,796,203 1,167,963 628,240 21,250,343 20,918,430 331,912 FY 08 -09 8,352,127 2,648,555 5,703,571 2,654,177 3,049,394 2,021,702 1,027,692 19,058,031 10,962,746 8,095,284 4,610,505 3,484,779 2,080,187 1,404,592 FY 09 -10 8 ,638,054 3,079,330 5,558,723 2,652,568 2 ,906,155 CHlt l-Jt:rls , f..{!,t I a/z1 /µ;t 'fh, ll µ I A) /Jrl2. y 1,792,665 y (! Jc... '<:.k ~ --~'._~~~'._~~~_<1lf-,CJr6/ ~~ AC>"J 18,568,448 11,269,542 7,298,906 4,429,794 2,869,1 11 1,636,964 ...,vlt(J,/s,c.J( lc-AIJJ;.- == 1,232, 141{ ,q, ~) f; ( ~(!{!£1) kl,, f}/,1.J 5 ,617,220 260,687 5,356,533 2,914,263 2,442,269 1,467,474 914, 195 'It 7h1 3,332,610 411,824 2,920,786 2,909,604 -...., yA(l,/5 ie.K. L.6,4~ k!c.P.u l+l 11,181 <, i/J1Z-1 CJtUI iCAt.-jrG:f;N{;r !'3 /f ~l 11,181 / Period End ing 09 /30/201 1 0913012012 09130/20 13 0913012014 09 /30/20 15 09/30/20 16 09 /30/20 17 09 /30/20 18 09/30/20 19 0913012020 09 /30/202 1 09/30/2022 09 /30/2023 09/30/2024 09 /30/2025 BOND DEBT SERVlCE City of Fairhope. Alabama U .O . Refunding Warrants, Series 20 IO (Advance Refu nd Series 2002) Da ted Da te Delivery Date Principa l 355 ,000 310 ,000 250 .000 255 ,000 260 .000 260,000 265 ,000 270 ,000 280 ,000 290 ,000 370,000 380.000 395,000 405 ,000 425.000 4 ,770,000 Cou pon 0 .650% 0 .830% 1.070~0 1.360% 1.640°0 1.920% 2.200% 2.440% 2 .670% 2.860% 3 .060% 3.190% 3 .300% 3.380% 3.460% 10/01 /2010 10/29/2 010 In te rest 75,560.33 111 ,033 .00 108,460 .00 105 ,785 .00 102.3 17.00 98 ,053 .00 93 ,06 1.00 87 ,23 1.00 80.643 .00 73 ,167 .00 64,873.00 53.55 1.00 41 ,429 .00 28,394 .00 14.705.00 I, 138 ,262.33 Oct 22 , 2010 7 :23 pm Prepared by The Frazer Lanier Com pan y Debt Service 430,560.33 421 ,033 .00 358,460.00 360,785 .00 362,3 17 .00 358,053 .00 35 8,06 1.00 35 7,23 1.00 360.643.00 363 ,167 .00 434 ,87 3 .00 433 ,55 1.00 436,429 .00 433,394 .00 439.705 .00 5,908 ,262 .33 Page4 ,. Date 09130/2011 09/30/2012 09/30/2013 09130/20[4 09130/20 15 09/30/20 16 09 /30/2017 09 /30/20 18 09/30/2019 09/30/2020 09/30/2021 09 /30/2022 09 /30/2023 09/30/2024 09130/2025 SAVINGS City of Fairhope, i\la ba ma G .O . Refonding Warrants, Series 20 IO (Advance Refund Series 2002) Prior Refunding Refunding Refunding Debt Service Debt Service Receipts Net Cash flow Savings 453 .]72.50 430,560 .D 8 ,8 15.37 421,744 .96 31 ,627 .54 454 ,247 .50 421 ,033 .00 421 ,033.00 33 ,2 14 .50 389,497 .50 358,460 .00 358,460.00 3 1,037 .50 39 l ,502 .50 360.785 .00 360 ,785 .00 30,7l7.SO 392,902 .50 362,317.00 362,317 .00 30,585 .50 393 ,565 .00 358,053 .00 358,053 .00 35 ,512 .00 393 ,460 .00 358,061 .00 358,06 1.00 35 ,399.00 392 ,680.00 357 ,23 1.00 357 ,231.00 35,449 .00 396 ,205 .00 360,643 .00 360,643 .00 35 ,562 .00 393 ,785 .00 363 ,167 .00 363 ,167 .00 30.618 .00 470,625.00 434 ,873 .00 434 ,873 .00 35 ,752 .00 467 ,865 .00 -133 ,551.00 433 ,551 .00 34 ,314 .00 469,000 .00 436,429 .00 436,429 .00 32 ,571.00 468,750 .00 433,394.00 433 ,394 .00 35 ,356.00 472 .500 .00 439 ,705 .00 439 .705 .00 32.795 00 6 ,399,957 .50 5,908,262.33 8 ,8 15 .37 5,899,446.96 500 ,5 10.54 Savings Summary PY of savi n gs from cash fl ow Plus : Refunding funds on hand Net PV Savings 4 10,261.66 816.90 4 11 ,078 .56 Oct 22, 2010 7 :23 pm Prepared by The Frazer Lan ier Company Present Va lue to 10/29/2010 (iv, 2 .8736073% 32.417 .25 32 ,313 .71 29.334 .90 28.l86.40 27,245 .41 30,648 .32 29,662 .16 28,839 .44 28 ,089 .20 23 ,5 11 .44 26 ,6 19.57 24 ,804.44 22 ,855 .86 24 ,067 .70 21 ,665 .87 4 10 ,26 1.66 Page 5 Dated Date Delivery Date Arbi tra ge y ield Escrow y ield Bond Par Amount Tru e In tcrest Cost Net Interest Co~1 A veragc Coupon Average Life SUMMARY OF REFUNDING RESULTS City of Fairhope. Al a bama G .O . Refunding Warrants. Series 20 10 (Adrnncc Refund Series 2002) Par amount of refunded hoods A ve rage coupon of refunded bonds Average li fe of refunded bonds PY of prior debt to 10/29/20 10@ 2 .873607° o Net PV Savings Percentage savings of relimded bonds Pe rcentage savings of refunding bonds Oct 22, 2010 7 :23 pm Prepared b y The Frazer Lanier Company 10/0 1/2010 10/29/20 10 2 .873607% 0 .169871°0 4 .770,000 .00 2 .873607% 2 .899293°0 2 .899293% 8 .15] 4,475 .000 .00 4 .772772% 8 .62 1 5 , 18 0 .261 .66 411 ,078 .56 9 .186 11 3% 8.617999% Page 6 / Period Endi ng 09/30/20 11 09130/20[2 09/30/20 13 09/30/20 14 09/30/2015 09/30/2016 09/30/20 17 09 /30/20 18 09!30/2019 09 13012020 09 /30/202 I 09130/2022 09/30/202] 09/30/2024 09/30/2025 09 130i 2026 f30ND DEBT SERVICE Ci ty orFairh ope, i\labama Utilities Revenu e Refunding Warrants. Series 20 l0-A (Advance Refund Series 2002) Dated Da te Delivery lrJ te Principa l CO UJXlll ---· --· - 35 ,000 0 .94-0% 45 ,000 l.020°'u 45 ,000 1.230% 45 ,000 1.470% 45 ,000 1.760% 45 ,000 2 .0 10% 45,000 2.240% 45,000 2 .500% 50 ,000 2 .740°0 50 ,0 00 2.960% 315,000 3.150% 1.205 ,000 3 .350% 1..250 ,000 3 .450% 1,290,000 3 .560% 1,345,000 3 .650% 1.395.000 3 .720~0 -------- 7 ,250,000 10/01 '2010 10 '29/2010 Interest ---·-- 165 ,840.83 248,449 .50 247 ,943 .25 247,335 .75 246 ,609.00 245 ,760.75 244 ,804 .50 243 ,738.00 242.490.50 24 1.065 50 235 ,364 .25 210.2 19 .25 168 ,473 .00 123 ,948.50 76,440.25 25.947 00 3 ,214 ,429 .83 Debi Service 200,840.83 293,449 .50 292,943 .25 292,335.75 29 1.609 .00 290,760 .75 289,804 .50 288,738 .00 292,490 .50 29 1.065 .50 550,364 .25 1,4 15,2 19 .25 1,4 18,4 73 .00 1,4 13 .948 .50 1,421.440.25 1.420.947 .00 10.464,429 .83 Oct 22, 2010 7 :27 pm Prepared by The Frazer Lanier Company Pagc4 Prior Date Debt Service 09/30/2011 331 ,650 .00 09/30/2012 331 ,650 .00 09/30/2013 331.650 .00 09/30 /2014 331 ,650 .00 09/30/2015 331 .6 50 .00 09 13012016 331 ,650.00 09/30/2017 331 ,650 .00 09/30 /2018 331.650 .00 09 130/2019 331 ,650 .00 09/30/2020 331 ,6 50 .00 09/301202 l 590,422.50 09/30 /2022 1,456 ,235 .00 0 9/30/2023 1,458 ,262 .50 09 /30/2024 1,456 .125.00 09 /30 /2025 1,460 ,125 .00 09/30/202 6 1,460 .625 .00 11.198 ,295 .00 SAVINGS City of Fairhope, Alabama Utilities Revenue Refu nd ing Warrants , Series 2010-A (Advance Refund Series 2002) Prior Prior Refunding Refunding Refunding Adjustments Net Cash Flow Debt Service Receipts Net Cash Flow -110 ,567 .83 221 ,082 .17 200,840 .83 331 ,650 .00 293,449 .50 331 ,650 .00 292 ,943 .25 331 ,650 .00 292 ,335 .75 331 ,650.00 291 ,609 .00 331 ,650.00 290 ,760 .75 331 ,650 .00 289 ,804 .50 331 ,650 .00 288 ,738 .00 331 ,650 .00 292,490 .50 331 ,650.00 291 ,065 .50 590,422 .50 550 ,364 .25 1,456 ,235 .00 1,415 ,219 .25 1,458 ,262 .50 1,418,473 .00 1,456 ,125 .00 1,413 ,948 .50 1,460 ,125 .00 1,421,440 .25 1,460 ,625 .00 1,4 20 ,947 .00 -110,567 .83 11.087 ,727 .17 10 ,464,429 .83 Savings Summary PY of savings from cash flow Plus : Refunding funds on hand Other adjustments Net PV Savings 19,367.29 181,473 .54 293 ,449.50 292,943 .25 292 ,335 .75 291 ,609 .00 290 ,760 .75 289,804 .50 288 ,738 .00 292,490 .50 291 ,065 .50 550,364 .25 1,415,219 .25 1,418,473 .00 1,413 ,948 .50 1,421 ,44 0 .25 1,420 ,947 .00 19 ,367 .29 10 ,445 ,062 .54 487 ,855.08 879.42 -40,236 .00 448,498 .50 Oct 22. 20 10 7 :27 pm Prepared by The Frazer Lanier Compan y Present Value to 10/29/2010 Savings @ 3 .5886120% 39 ,608 .63 38 ,160.47 38 ,200 .50 36,041.93 38 ,706 .75 35 ,247.99 39,314 .25 34 ,555 .39 40 ,041 .00 33 ,970 .28 40 ,889 .25 33 ,484.41 41 ,845.50 33 ,077.27 42 ,912 .00 32 ,742 .56 39,159 .50 28 ,775 .0 8 40 ,584 .50 28 ,791.54 40 ,058 .25 27 ,433.49 41,015 .75 27 ,212 .71 39 ,789 .50 25 .561.0 1 42 ,176 .50 2 6 ,267 .77 38 ,684 .75 23 .334 .03 39 ,678 .00 23 ,199 .15 642 ,664 .63 487 ,855 .08 Page 5 SUMMARY OF REFUNDlNG RESU LTS City o f Fa irho pe. A laba ma Uti lit ies Re venue Re fu nding Warrants. Series 20 10-A (Advance Refund Series 2002) Dntcd Dnte De livery Date Arbitrage yield E~rowyield 13ond Pa r A mount Trn e Inte rest Cost Net Interest Cost Average Coupon Average Li fe Pa r amo unt of refitnded bond s Ave ra ge cou pon of refunded bond s A verage li fe of refu nded bond s PV of pri or debt to 10 /29 /20 10 (a) 3 .58 86 12 % Ne t PY Savi ngs Pe rcent age savi ngs of refund ed bond s Pe rcentage savi ngs of refu ndin g bond s Oct 22 . 2UIO 7 :27 pm Prepared by The Frazer Lanier Company 1010 1 ;2010 10129 120 10 3 .5886 12% 0 .209703°-. 7 ,250 ,000 .00 3 .5 16050% 3 .522727°0 J .522727°0 12 .508 6 ,720 .000 .00 4 .944579% 13 .067 7 .796 ,-107 .06 448 ,498 .50 6 .674085% 6 .186 186% Page 6