09/06/1988 Meeting Minutes - Laserfiche WebLink

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Council Minutes of .9/6./88 _3_ 2) County Auditor also advised that the local government fund for 1989 will be in the areas of $637,300 - an increase of $64,000 over 1988. 3) Internal Revenue Service has finally approved the city's pick-up plan as of July 29th. It is effective either on the date council passed the ordinance or the date the City of North Olmsted started the plan; this is not clear. 4) In August, the City of Cleveland advised that billing rates would increase from $2.93 per quarter to $3.08 per quarter. This is based on the 1987 audited cost of $2.95 and reflects the 1988 Consumer Index. The 1988 audit of Cleveland utilities will be completed on July 1, 1989 and according to them that rate should go up or down. Finance Director has not seen it go down yet. 5) Also, in August, the city closed three note issues with four notes. The Judgment Note required two closings: one for $170,000 was sold at 6.27 and the other for $130,000 was sold at 6.377. .The Industrial Park Note for $1,025,000 was sold at 6.12; the Police Car Note for $85,000 was sold at 6.37. Finance Director's plans for next year are early retirement of .these notes to allow a little bit of legal arbitrage and hopefully bring all the notes together at one time. Is not too worried. about the Industrial Park .Notes but bringing together the other three notes should save on legal fees and give the city a better presence in the market in 1989. Interest expenses, including the Industrial Park, for next year, should be in the area of $86,624; $20,000 of this is chargeable to the city - the rest is special assessments. Finance Director used National City Bank Corporation as underwriter this year instead of McDonald and Company because their interest rate was low and their reissue rate, on the average, was .27 below the rate quoted. It is normal in the industry to be a half of a percent below and sometimes McDonald has been greater than that. After negotiating with everyone, Finance Director found that National City Bank's offer was the best for the city. 6) Would like to comment on Crocker/Stearns Extension literature given to him this evening by Mr. O'Grady. Would like to take issue with one point in the article which was to reduce the city's 13.3 million dollar bond indebtedness. In case anyone reads this, it is all bonding. There are scheduled payments through to the next century, so much per year, and the only way it could be re- duce would be to have the market's interest rate fall to somewhere in the area of 57/6 so that .new bonds could be issued and the old ones cancelled out. City cannot increase the payments; the people who own the paper. are expecting pay- ments at certain times. There is some early retirement involved but will not occur before 1995. This point in the article is a bit misleading. Nothing done now, or this year, or this decade is going to reduce the debt. Although it sounds large, at 13.3 million, it should be remembered that it is spread over 15 years. The city's capacity is 20 million so there is 9 million left; the indebtedness is slightly better than half of the capacity and the city was much worse off in the 1960's. It is actually healthy to be using money to buy capital goods over long periods of time. Councilwoman Bahas expressed her appreciation for the support and many expressions of sympathy extended to her family with regard to the recent death of her son, Tom. President Saringer reported: 1) Planning Review Committee held its initial meeting on August 25th. Mr. Gorris was elected to chair the committee; Mr. Hill, an independent consultant, will review the existing zoning ordinances and will forward his recommendations. Committee will review these recommendations and submit their written comments to Mr. Hill; if .necessary, Chairman Gorris will then call a meeting of the committee to discuss the written responses.