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Aldermen opt to seek out own bid before refinancing

Posted on Wednesday, November 16, 2016 at 11:31 am

After receiving a refinancing proposal through a third party to save the City of Vandalia approximately $95,000 on the Aquatic Center lease, the Board of Alderman chose to seek out their own bids in order to provide potentially more savings to the city.
Discussion on the topic led off last Tuesday’s meeting and it was centered around the focus of the city seeking their own bids instead of having another entity gather them.
“I just feel like it’s due diligence for us to do the bidding process,” Alderman John Weiser said. “…It looks like a good proposition but I don’t know that it is and to be a good steward of the city, I think we need to get bids…”
Some discussion was held regarding the approximate $25,000 in closing, legal, and other paperwork costs needing to be paid by the city if they chose to use Piper Jaffray’s help with the bidding process.
This was a cost that could also increase due to bond attorney fees.
Curt Gilliam, Assistant Vice-President of Piper Jaffray, reviewed a one page summary on the four refinancing bids he received as a total of 35 bid requests were sent out.
“I’m really happy with the four bids,” Gilliam said.
He noted that the bid was “outstanding” from Central Bank of Audrain County.
The bid showed a 2.14% interest rate and no reserve fund was required to net a savings to the City of Vandalia of $95,172 over 10 years.
Other bids came from Huntingon Bank (2.75%), First State Community Bank (2.95%), and Commerce Bank (2.985%).
It was noted by Gilliam that the savings to the city on the more than $790,000 still owed would come in the reduction in the interest cost as the interest is currently 4.72%.
Gilliam said one city he dealt with decided to bid out the issue themselves, took more than two months, and eventually cost themselves about $3,000 in their delaying of the refinancing.
He noted that every week Vandalia aldermen would delay a decision could cost the city about $460 each week due to the interest percentage difference.
He did note that Central Bank will lock the 2.14% through mid-December but won’t be locked forever if the city chooses to not make the decision.
While Alderman Weiser reiterated his feeling that the city should bid the refinancing themselves instead of through a third party, Alderman Bob Dunn noted he was happy with the net savings being proposed with the Central Bank offer.
A motion was made by Alderman Weiser for the city to place its own bid and aldermen passed the measure.
National League of Cities
Aldermen approved a measure to authorize City Administrator Chase Waggoner, on behalf of the city, to enter into an agreement to allow Vandalia to participate in the National League of Cities’ Service Line Warranty Program. This allows citizens to purchase service line warranties through the program.
Participation is managed through a third party vendor at no cost to the city and is voluntary from citizens.
Warranties run from $5.75-$9.99 per month. The adoption of the program represents a revenue stream of .50 cents per warranty per month for the city and an estimated $500-$700 annually. After three years, the city could have revenues exceeding $1,250.
City Administrator Waggoner noted Lawson, Mo., which is about Vandalia’s size, made $618 in their first year of the program. Alderman Jennings asked Utilities Superintendent Aaron Rentfro what his opinion was on the matter.
Rentfro didn’t note any concerns.
Billing would take place through the third party company and not the city.
Review a reimbursement of demolition dollars
Aldermen approved a measure to reimburse 100% of the $1,234.55 demolition cost to Richard G. Stinnett. Stinnett began demolition of the property on the 600 block of W. Woodlawn before he submitted a Building Demolition Program Application as the policy was passed in September.
The demolition took place 11 days after the board meeting.
The measure was not unanimously passed. Mayor Pro-Tem Doug Bontz abstained from the vote as he led the meeting with Mayor Ralph Kuda unable to attend.
Right-of-Way with the railway
Aldermen delayed a measure for the city to have a right-of-way agreement with the Kansas City Southern Railway Company to run city utilities under the railroad tracks to service a new MFA building any future development on the west side of town.
This results in a one-time payment of $18,750 to Kansas City Southern for permission to bore under their rail line.
Mayor Pro-Tem Bontz noted a part in the agreement that a party can cancel the plan in 10 years with a 30-day notice.
City Attorney Amy Rost noted that clarification would need to be made on the item. The board may make a decision at an upcoming special meeting.
Chief of Police-Resident Exception
Aldermen discussed a proposal to possibly change an ordinance that would allow a Police Chief to live outside the City of Vandalia.
Alderman Dunn said the chief of police needs to live in Vandalia.
Alderman Weiser said if allowed, the city should specify the proximity in which they can live outside of the city.
Alderman Jennings said aldermen did require a new city administrator to live within the city limits.
City Administrator Waggoner said it is a recruiting difficulty for cities to have ordinances requiring those hired to live in the city limits.
Mayor Pro-Tem Bontz said he read about other cases showing five or within 20 miles. He shared his own experience as a paramedic on-call that needed to call the police chief to assist in emergency situations. He noted the importance of them living in the city.
Alderman Weiser asked for the amendment to be read and for the police chief to be allowed to live within a 20-mile radius of the city limits.
Mayor Pro-Tem Bontz said Chapter 8-5 of the Missouri Statute says the sheriff or the police chief must live in the county.
“So if it’s 20 miles, Ralls and Pike would be out,” he noted.
A motion was made to approve, then a motion was made to reconsider a first vote after clarification was made in regards to aldermen only passing a first reading.
A new motion was then voted on in approval of the first meeting but it died in lieu of a second.
The lack of further discussion results in aldermen keeping the ordinance as it was in that the Police Chief will be required to live within the city limits.
New Business and Future Agenda Items
City Administrator Waggoner noted that the city is in the black on all funds except for the Water Surcharge Fund, that covers capitol improvements for water purposes.
He said he is proposing a future item of a $1.65 water surcharge to allow the city to be completely out of the hole in three year and two months.
A Special Meeting was scheduled for aldermen to discuss health insurance as a couple of extra weeks were needed to secure more bids. A meeting was set for Monday, November 21.
The Show-Me Heroes Program was discussed. If the city signs a pledge to hire veterans when there is a opening, the state would offer to pay salary for training as the veteran learns the new skill.
Demolition program could also be discussed again at a future meeting.
The CSI Building and the new library could be re-opened soon.
Estimates are still being sought for renovating the police station or possibly moving into the old Casey’s building.
Miscellaneous
Aldermen opened the meeting by approving the minutes from the October 11 meeting and the Accounts Payable.
Some information was held in regards to the Sewer Code.