HomeMy WebLinkAbout2012-03-12 12-112 ORDERCOUNCIL ACTION
Item No. 12 112
Date: March 12, 2012
Item/Subject: ORDER, Reallocating $162,840 of Bond Premium to Vehicle Replacement
Responsible Department: Finance
Commentary: On January 24, 2012, the City sold $6.5 million in General Obligation Bonds
through a competitive bid process. The majority of the bonds were issued to refund outstanding
2002 bonds at a lower interest rate. Due to current financial markets, investors were looking
for a slightly higher coupon rate and in exchange for that, were willing to pay a premium to
acquire our bonds. This premium generated $162,840 in excess of anticipated bond proceeds.
For IRS purposes, these funds must be treated in a similar manner as the underlying tax-exempt
bond proceeds. Therefore, this order comes forth to reallocate these proceeds reallocated for
vehicle replacement, which is a qualified use of these funds. This order comes forward at this
time, due to an opportunity to purchase a quality used catch basin cleaner. The purchase of
which was approved by the Finance Committee on March 5th. Had this opportunity not
presented itself, a similar order to reallocate proceeds would have come forth as part of the
upcoming FY 2013 budget process.
This was reviewed and recommended for approval by the Finance Committee on March 5, 2012.
Department Head
Manager's Comments:
This item will require a public hearing on March 26, 2012.
City Manager
Associated Information:
Budget Approval:_
finance Director
Legal Approval:
City Solicitor
Introduced for
Passage
X First Reading Page _ of _
Referral
(W2940183.11
Assigned to Councilor - Baldacci
CITY OF BANGOR
(TME.) Order Reallocating $162,840 of Bond Premium to Vehicle Replacement.
12 112
March 12, 2012
WHEREAS, on February 9, 2012, the city of Bangor issued its 2012 General
Obligation Bonds dated February 1, 2012 in the aggregate principal amount of $6,525,000 (the
"2012 Bonds") pursuant to City Council Orders 10-280 (adopted August 23, 2010), 11-248
(adopted August 8, 2011) and 12-017 (adopted December 12, 2011) (all collectively the "Prior
Orders"); and
WHEREAS, the sale of the 2012 Bonds resulted in a sale premium on the Bonds
delivered to the tray in the amount of $162,840, which sale premium the city Council desires to
appropriate for vehicle replacement;
NOW, THEREFORE by the City Coundl of the City of Bangor, be it hereby ORDERED:
THAT the project description to be financed with the proceeds of the 2012 Bonds as
specified in the Prior Orders be modified to include "vehicle replacement" and that the $162,840
of sale premium from the 2012 Bonds be and hereby is reallocated and appropriated for such
purpose as follows:
Estimated
Description Amount Life
Vehicle Replacement $162,840 12 years
THAT the Finance Director be, and hereby is, authorized and empowered in its name
and on its behalf to do or cause to be done all such acts and things, and to execute and deliver,
all such financing documents, certificates, and other documents as may be necessary or
advisable, with the advice of counsel for the City, to cant' out the provisions of this Order, as
may be necessary or desirable.
(W2946170.1)
IN CITY COUNCIL
MARCH 12, 2012
FIRST READING
INT UM CITY C 5
IN CITY COUNCIL
March 26, 2012
Motion Made and Seconded to Open the
Public Hearing
No one from the Public came forward
Motion Made and,Seconded to Close the
Public Hearing
Public Hearing Closed
Motion Mader and Seconded for Passage
Passe
s
INTERIM CITY RIC
ORDER
(TITLE,) REALLOCATING 162,840 OF BOND PREMIUM
TO VEHICLE REPLACEMENT
Assigned to Coundlor
Legal Notices
CITY OF BANGOR, MAINE
NOTICE OF PUBLIC HEARING
Notice is hereby given that the Bangor City Council will
hold a public hearing at 7:30 p.m., March 26, 2012 at City
Hall, 73 Harlow Street, Bangor, Maine on the proposed re-
allocation of $162,840 of bond premium from the City's
2012 General Obligation Bonds to finance vehicle re-
placement
All persons who desire to be heard on the proposed bor-
rowing are invited to attend the public hearing. The City
Council will consider action authorizing the bonds imme-
diately following the public hearing.
Copies of the proposed order will be on file and may be
reviewed at the office of the City Clerk prior to said public
hearing.
Dianne Lovejoy, Interim city clerk
March 12, 2012