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HomeMy Public PortalAbout1571st Board Journal 12-1-2015Pg. 1 JOURNAL OF THE (1571st) SPECIAL MEETING OF THE BOARD OF TRUSTEES THE METROPOLITAN ST. LOUIS SEWER DISTRICT December 1, 2015 at 3:30 p.m. The Trustees of the District met in Room 109 at 2350 Market on the above date. Present at the meeting were: Board of Trustees Staff Members M.E. Yates, Chair B.L. Hoelscher, Executive Director J.P. Faul, Vice Chair T.R. Snoke, Secretary-Treasurer (by phone) V. E. Patton S.M. Myers, General Counsel A.K. Mandel M. M. Gee, Director of Finance R.L. Unverferth, Director of Engineering Also present were: Trustee Yates opened the special board meeting pursuant to notice and call. ~ ~ ~ ~ ~ Upon motion made by Trustee Yates, that the Board of Trustees meeting was called to order at 3:30 p.m. General Counsel, Susan Myers, performed Roll Call. ~ ~ ~ ~ ~ The Executive Director thanked the chair and introduced the Secretary-Treasurer, Tim Snoke, calling via conference from New York regarding the MSD bond sales. The Secretary-Treasurer indicated that the bonds finished pricing the morning of December 1, 2015 and reviewed the presentation with the Board regarding pricing and final votes on the bond ordinance. Final Par amount of debt to be issued is $223.8 million; $150 million-bond issuance for new capital projects and refunding of $90 million of current outstanding bonds with a par issue of approximately $73.8 million. Final maturity will be 30 years for the new money issue and the average life of the bonds will be approximately 18 years due to principal payments occurring almost every year over the duration of Tamara Clinton MSD Ed Laux RJN Group Jon Sprague MSD Terry Briggs SITE Barbara Mohn MSD Cary Duchene Black and Veatch Vicki Edwards MSD Leslie Metts O.R. Colan Darryl Lewis MSD Lance Lecomb MSD Dan Shepard MSD Matt Bacon MSD Allen Muehler MSD Todd Loretta MSD Brad Nevois MSD Margaret Saeger MSD Theresa Bellville MSD Sharon Parker MSD Pg. 2 the full maturity of the bonds. The True Interest cost of the bond issue was approximately 3.6% and the coupons on the bonds are mostly 5% with some at 3-4%. The bonds were sold at a premium; therefore, MSD will receive cash in excess of the face value of the bonds. The average spread to MMD (Municipal Market Data) is at 6 basis points. In 2013, we priced 22 basis points outside MMD. W e expect the actual spread to be a little wider than 6 basis points after final analysis, but well inside where we priced in 2013. MSD generated over a billion dollars in orders for the $220 plus million bonds that will be sold. $150 million of the bonds is for new capital projects but MSD will deposit $175.5 million into the project fund. This is a result of two things that occurred: (1) Premium prices driven by the difference between coupons and market rates, and (2) that there wasn’t a Debt Service Reserve Fund so all the funds can go into the project account. We received good pricing even without the Debt Service Reserve Fund, which is a positive. The refunding portion of the bonds is $90 million, but we issued under $74 million for the refinancing due to premium pricing and the release of the reserve funds on the bonds that are to be refunded (2006C and 2008A bonds). We will have a cash flow improvement from this refunding of over $21 million over the next 22 years; net present value of over $16 mil dollars, - a huge savings on $90 million of bonds. This will save the ratepayers a lot of money over the next 22 years. Comments received from the rating agencies were supportive of our release of the debt service reserves, management processes and governance. In January, MSD Financial Advisors will meet with MSD to provide a pricing summary on how our current deal compares to past MSD deals and other deals in the market. The Secretary-Treasurer asked the financial advisors, Bethany Pugh and Tionna Pooler, to share comments before closing. Both women congratulated MSD’s staff and team for success in the market and noted they were pleased with the results. They commented that this was the best pricing that they’ve seen for a MSD bond deal, commented on the favorable market conditions and indicated that they will provide the Board with detailed information on the deal in January. There were no further questions or comments and the Secretary-Treasurer turned it back over to the Executive Director. The Executive Director thanked the Chairman and concluded his report. The Chair asked for comments from the public. There was no comment. General Counsel noted that there wasn’t a consent agenda and moved to new business. ~ ~ ~ ~ ~ Pg. 3 NEW BUSINESS ORDINANCES 6 PROPOSED ORDINANCE NO. 14312 WASTEWATER SYSTEM IMPROVEMENT AND REFUNDING REVENUE BONDS, SERIES 2015B INTRODUCTION AND ADOPTION OF AN ORDINANCE, authorizing and directing the issuance, sale, and delivery of Wastewater System Improvement and Refunding Revenue Bonds, Series 2015B, of The District; prescribing the form and details of said bonds; and authoring certain actions and documents and prescribing other matters relating thereto. Motion was made by Trustee Yates, seconded by Trustee Mandel, that the Proposed Ordinance No. 14312 be introduced. Motion passed - 4 ayes – 0-nays Poll taken: M. Yates – aye; J. Faul – aye; A. Mandel – aye; V. Patton – aye; General Counsel asked if there was an objection to the suspension of the rule. There were none. The Motion was made by Trustee Patton, seconded by Trustee Mandel, that the Proposed Ordinance No. 14312 be adopted. Motion passed - 4 ayes – 0-nays Poll taken: M. Yates – aye; J. Faul – aye; A. Mandel – aye; V. Patton – aye; ANY OTHER BUSINESS THAT MAY PROPERLY BE BROUGHT BEFORE THE BOARD ADJOURNMENT Upon motion made by Trustee Mandel and seconded by Trustee Yates, and unanimously passed, the meeting adjourned at 3:40 p.m. ~ ~ ~ ~ ~ Secretary-Treasurer