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2005-06-22 SP MTG29 505 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 SPECIAL TOWN BOARD MEETING MTG. #29 JUNE 22, 2005 RES. 316 7:00 p.m. EVERGREEN BANK-QUAKER ROAD TOWN BOARD MEMBERS PRESENT SUPERVISOR DANIEL STEC COUNCILMAN ROGER BOOR COUNCILMAN THEODORE TURNER COUNCILMAN JOHN STROUGH COUNCILMAN TIM BREWER CRANDALL LIBRARY REPRESENTATIVES MEMBERS OF TOWN OF MOREAU TOWN BOARD MEMBERS OF THE CITY OF GLENS FALLS COMMON COUNCIL Crandall Library Trustee Ms. Donna Farrar – Opened the Meeting. Introduced the Attorney Wayne Judge and Monica Duffy Attorney Wayne Judge for Crandall Library-Spoke on City of Saratoga Springs and Clifton Park just completed major library projects, noting that a library is just as important part of the infrastructure to a community as a sewer line. When people evaluate an area they look at a library the way they look at everything else, where are my children going to go are my kids going to be well educated. This is a cooperative effort by all three communities to try to upgrade and make our library equal or superior to the libraries in the surrounding communities. The purpose of this meeting is not only to demonstrate that the project is physically doable, the reason for the meeting is to explore the various ways to get it done and do it in the most cost efficient way that would be of the most benefit to the taxpayers in the library district. Invited the following consultants : to this meetingJohn Puig- Representing First Albany Corp. if we have to go to public bondings, he can explain what a bond underwriter does and how it functions and how he gets paid and how much he gets paid. Garrett DeGraff – Bonding Attorney he can analyze the statute…and what our powers are as defined in the statute. Allen Rhodes – Chairman of the Crandall Trust noted more of Crandall Park is owned by the Crandall Trust whatever is done will need the approval of the Crandall Board of Trustees Attorney Monica Duffy-Spoke on bonding – investigated the different bonding options that are available for the project. Four Options No. 1 - For Crandall Library to issue bonds No. 2 New York State Dormitory Authority to issue the bonds No. 3 IDA (Industrial Development Agency) issue the bonds on behalf of the Library No. 4. The three municipalities to issue bonds Attorney DeGraff-Introduced Jeannine Rodgers Caruso- Firm of Fiscal Advisors they work with municipalities and other issuer State wide as a financial advisor No. 1 Option re: Library issuing bonds – concluded Library cannot issue bond prevented by the New York State Constitution No. 2 Option Dormitory Authority that was looked at several years ago…they can provide financing to the library, the library would borrow funds using the Dormitory Authority as a conduit, they are the means by which the library accesses the tax exempt finance market … the repayment obligations remains entirely the library’s, bonds are sold by the Dormitory Authority solely by dollars received from the library to pay debt service…This would entail entering in an agreement with the Dormitory Authority and paying their fee … it also means engaging the Dormitory Authority Bond Counsel, that cost, plus the cost of the bring the bonds to market…Spoke on the two ways bonds are sold, one being negotiated offering and the second being with an open competitive process, sealed bids…With the Dormitory Authority would you also have a State Issuance fee…and a bank to receive moneys from the Library and pay out the bond holders would be required No. 3 Option Issuance of bonds through the IDA – they are authorized to issue bonds for civic facilities … fee would be collected for the bond issuance service there would also be a State Issuance fee…a trustee would be 506 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 required a bank to receive moneys from the library to pay the bond holders…No. 4 Option Issuance of bonds of the library by the three municipalities … this would require action from each municipality …if bonds are issued by the municipality the relative amount of bonds would be determined by the formula set forth in the statue which is the same formula that is used to allocate the operating budget of the library amongst the municipalities. The municipalities can authorize bonds subject to permissive referendum requirements…Costs of bonding-local bond counsel fee, you would likely hire a fiscal advisor, modest incidental cost…there is no state issuance fee payable…or trustee fee…it is a simpler structure for the municipalities to bond… Unknown-Questioned if each municipality bonded would there be a need for a district wide election or referendum on the library? Ms. Farrar-There would be a public vote on the bonding. Attorney McGraff-There has already been an agreement for a referendum…adopt a bond resolution subject to a mandatory referendum… Attorney Judge-We would have a referendum that would take the form of a bonding resolution… Unknown-There would not be a district wide vote but a vote in each of the municipalities. Attorney Judge-Correct Just vote once. Mr. John Puig-1st. Albany- Explained what an underwriter does- they purchase bonds for resale to individual and institutional investments..purchase through competitive bid the underwriter gets paid by building a component into his bid…alternative IDA or Dormitory Authority – you see negotiated sales, you hire an underwriter that firm works with the financial advisor and the bond lawyers.. Attorney Judge-Under the three viable options would we have to hire underwriter for each one of the three? Mr. John Puig-With the Dormitory Authority option or IDA you would have to hire an underwriter… Jeannine Rodgers Caruso-If the municipality issued the debt on their own by law you cannot oversee that transaction that would have to a competitive sale of each three municipalities. Attorney Judge-With the three options would they have to hire someone like you a financial advisor? Jeanine Rodgers Caruso-For the competitive option, yes. For the negotiated option I am going to tell you yes you should hire a financial advisor, a financial advisor in a negotiated transaction a financial advisor serves several purposes, one, is to many times we put together the official statement, noted we do represent the Town of Queensbury and the City of Glens Falls, we have all of their information so putting together a financial statement for both of those municipalities would be straight forward…I do not believe that we have worked with the Town of Moreau…The Official Statement or Perspective details all of the information on the different municipalities. In the competitive sale it is a general obligation unlimited tax obligation, the official statement is filled with basic information which is showing your ability to pay this obligation. If it is an IDA transaction it is more complicated or from the Dormitory Authority. Why would you need a financial advisor? They are typically another set of eyes, we work with the underwriter but we are also making suggestions, we are in on the pricing, talking about comparables. Attorney McGraff-Spoke on the fiduciary duties… Attorney Judge-What is issued for the security for the repayment? 507 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 st Mr. John Puig 1. Albany -Either way you will end up with bond insurance. Spoke on pledges made to the project…individuals do not give it all at once, it is given over time…we can integrate that into the IDA it is difficult when the communities bond, noted there would be a lot of duplication in that process… Ms. Farrar-Is there any difference between the choices in how much has to be set aside for a reserve? Mr John Puig-If you issue bonds through the communities through a competitive sale you cannot have a reserve. If you issue bonds through the IGA or Dormitory, you would be required to have a reserve. It would have little impact on the borrowing costs. Town Counsel Hafner-Will the library own the property where the building is or long term lease? Unknown–the lease would be longer than the bonds. Town Counsel Hafner-The allocation of the bond, the percentage would not change since the date of issuance? Attorney McGraff-yes. Town Counsel Hafner-When they issue the bond we give the money to the treasurer of the library but then they are our bonds so when the tax comes the library district tax goes to the Town Supervisor and he pays back the bond issue. It is not flowing thorough the library. Ms. Farrar-It goes through the Town and the City to begin with so they would withhold the debt service portion and only give us the balance of the budget. Attorney McGraff-It is outside the library budget Town Counsel Hafner-The bonds are our obligation. Supervisor of Moreau Mr. Gutheil-Regarding the referendum does this require a super majority? Attorney McGraff-This does not require a super majority, the adoption by the municipal th board would take a 3/5 vote of those boards. Supervisor Gutheil-I assume the cost of any referendum would be borne by the municipality? Unknown-It would be on the November ballot. Supervisor Gutheil-If someone petitions a referendum. Unknown-It is a mandatory referendum. Supervisor Gutheil-If each municipality went to their own bonding how would that affect our constitutional debt limit? Jeanine Rodgers Caruso-It does count against your debt limit. The other issue is bank qualification if you have other debt that you are planning to issue during the year anything over ten million dollars is not consider bank qualified. Supervisor Gutheil-noted that they are concerned with the debt limit…noted that the town is non-rated at this point. Attorney Judge-Clifton Park and Halfmoon have a library district similar to our, they opted for general obligation bonds. 508 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 Unknown-Noted that is a 70/30 split no fundraising. Ms. McDonald-We would have to have the pledges before we could get a loan and those could hold us up for years. Supervisor Gutheil-Each Community would end up with different bond ratings how is that going to effect … Mr. John Puig-If each community finances it proportional share each will pay differently based on the markets perception of each community’s credit rating. Supervisor Gutheil-Are there differences in the IDA’s? Mr. John Puig- Noted that there shouldn’t be much difference… Supervisor Gutheil-What about fees? Mr. John Puig-Each IDA has a fee schedule you would have to look at that. Supervisor Guthiel-In regard to insurance what are the ratio’s? Mr. John Puig - 100% Town Counsel Hafner-Can you give us a ball park figure? Ms. Farrar-We will meet in July with the architect with the final costs, but we do not have them right now. Town Councilman Boor-Not even a range? I think we need an idea of what the parameters are, I have to believe that you have some idea, nobody is holding you to it. Ms. Farrar-We have been working hard with the architect to pear it down.. Ms. McDonald-Noted other costs involved on moving the materials in the library… Ms. Farrar-We are trying to put that component together. Town Councilman Boor-You have read in the press what happened in Queensbury with the community center and if you come out last minute with this thing people are going to react like last minute, they may not… Ms. Farrar-We want to come out with the right number this time. Town Councilman Boor-How many square feet are you considering adding? Ms. Farrar-29,000 square feet… Town Councilman Boor-What is the allocation as you believe it to be with regards to the number of people who are members from Queensbury, the number that are current card members for Moreau and current card members for Glens Falls, do you have that number? Ms. Farrar-We do have that and we use the 2004 figures. Supervisor Gutheil-Questioned if we use card holders or just assessments? Ms. Farrar-The formula is based on assessed valuation and also by the registry in the district… Supervisor Gutheil-Questioned what would happen if taxes were not paid… 509 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 Attorney McGraff-It would be the municipalities obligation it would be indistinguishable from any other municipal obligation. Ms. McDonald-In the City we get staggered payments that would have to be worked out. City Councilman Mr. Bud Taylor-It sound to me if we bond thorough the municipalities that it would be more complicated and it also sounded like you have a greater risk of having that thing passed, am I wrong? Mr. John Puig -I think it would be less complicated. Attorney Judge-In regard to municipalities they would be putting a proposition out to the voters to vote up or down, if the voters voted to incur this obligation they would realized they would pay it back to their municipality together with their regular taxes. If we went through the IDA or the Dormitory Authority there would be additional peripheral costs and the taxpayers would end up paying it anyway but they would be paying it through their library tax, they would be paying a little bit more, am I wrong? Unknown -If each municipality would take their share there would be three financial advisors, three underwriters and three bond counsel would that off set the additional fee for the State fee? Budget Officer Jennifer Switzer-That would depend on your municipality and their bond rating how that would come out. Jeanine Rodgers Caruso - Spoke on the expenses of each proposal… Attorney Judge-Mr. Taylor correct it would be less complicated to go through the Dormitory Authority… City Councilman Bud Taylor-Do we know what other municipalities bond rating are? Budget Officer Switzer-A1 Queensbury City Councilwomen Kay Saunders-Questioned if this would be a separate line on the tax bill so people would know what they are paying or just included in the City taxes? Budget Officer Switzer-…part of our operating budget… Town Counsel Hafner-The library district tax is not part of the library operating funds. Unknown- Noted the operating component would fluctuate from year to year. Budget Officer Switzer-Has this been run through the State Comptrollers Office? As far as the accounting of this, so we would know how it would have an impact on each of our budgets? Ms. Farrar-We have not gone that far… Mr. Gutheil-Questioned if it would have a potential impact on insurance, which bases rates on your total budget? Would it be an exempt item? Even your membership in association of towns could be affected. There could be some hidden costs there. City Councilwomen Kay Saunders-You are not able to give us tonight if we went through the IDA or whatever it would be, what the costs are…We do not know how much money we are talking about. Ms. Farrar-I was hoping to hear how much percentage under the IDA vs Dormitory Authority vs the Town Obligation. Attorney Judge-We have projected the bond counsel fees and clerical fees but we could not project the commissions. 510 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 Supervisor Gutheil-It would be nice to have a spread sheet- Town Councilman Strough-Noted we may have to hire people to make this decision. Unknown-I do not think that there is anyway to go except to have the three municipalities choose the same system. Town Councilman Boor-Spoke on the Town’s Recent Community Center Proposal, the public needs time to digest what is being proposed…if we put this out so late that the public will immediately react to it as opposed to getting use to it. Our hands are tied if we can’t intimate that this is a good idea without having an idea of the kind of money that we are talking about. Unknown-There is a possibility of setting the bond amount at an amount that you feel comfortable with and then the library works together to bring in additional funds. One of the things you chose to do is say we feel comfortable with the bond amount at a certain amount and decide how you would like to bond for it. The other thing would be the library to come forward with a number by the second week in July and to come out with full project costs and how it would affect each voter. We would have plenty of time not sticker shock. We cannot really come up with project amount if you do not know how you are comfortable with bonding. So, there is going to be variations in costs but you could choose the one that you are comfortable with maybe based on a certain increase over time from the last bond…Noted there will be a discussion next Wednesday when the archectects and the Library Trustees will present this to the whole community. It will be out there you will be able to talk about it, see it, but we have to figure out how we are going to bond for it. That is where we want direction from you because obviously we need to come out with a number early in July that reflects a decision about how this will be bonded. Town Councilman Brewer-Last time the preference was to use the Dormitory Authority, why is that not the preference this time? Ms. McDonald-We had a meeting with the three municipalities in 2001 and the municipalities wanted to make that decision on their own, they did not want the library making the decision because they felt your taxpayers were involved in this and so you needed to make a decision not us. That is the agreement that we signed. We are not recommending anything, we are asking you what you want to do. Town Councilman Brewer-There was a reason that you wanted the Dormitory last time? Ms. McDonald-Probably because we had never been through it before the Dormitory Authority does all the legwork for you. It costs more going through the Dormitory Authority and that was a big stumbling block …that is still the most costly option. Supervisor Daniel Stec-Mid July is three and a half weeks we have time to wait for those numbers…the Town of Queensbury will sit down with Jennifer and Bob to pick their brains because of their expertise and you will do the same with the rest of the your boards and councils with your experts…the three municipalities will communicate the various ideas…we are not going to make a decision tonight. Attorney Judge-Reviewed the Dormitory Authority…the advantage is the fact that all they do is bonding, they have a full time staff, they help you to administer payment of bonds, they charge a little more but they perform a lot of services that otherwise you would have to perform yourself…Spoke on staffing with the IDA…not comparable with the Dormitory Authority.. Mr. John Puig-If you issued the bonds on your own you probably depending on size your costs are going to run one to one and a half percent of the bond…if you go to IDA or Dormitory Authority it would be about three percent of what you issue…you need to look at the sum of principal and interest on the project.. 511 SPECIAL TOWN BOARD MEETING 06-22-2005 MTG. 29 Town Councilman Strough-the three routes of funding that we are looking at there are so many variables and possibilities for each one generally speaking the outcome is not significantly different. Ms. Farrar-Having said that I have to speak selfishly from the Library’s view point in that having to come up with another million, million and a half in a reserve and add it to the bond I think it is going to make it harder for us to get a positive vote. Supervisor Gutheil-A word of caution on construction cost, people are busy and people are having trouble finding contractors, the price of steel is elevated… Ms. Farrar-There will be a built in contingency… Supervisor Daniel Stec-We have enough information to go back to talk to our boards and then we will be in contact with the other municipalities and come to a consensus. RESOLUTION ADJOURNING SPECIAL TOWN BOARD MEETING RESOLUTION NO. 316.2005 INTRODUCED BY: Mr. Theodore Turner WHO MOVED FOR ITS ADOPTION SECONDED BY: Mr. John Strough RESOLVED, that the Town Board of the Town of Queensbury hereby adjourns its Special Town Board Meeting. nd Duly adopted this 22 day of June by the following vote: AYES: Mr. Boor, Mr. Turner, Mr. Strough, Mr. Brewer, Mr. Stec NOES: None ABSENT: None Respectfully submitted, Miss Darleen M. Dougher Town Clerk-Queensbury