Minutes 1985/10/01
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Attendance
Adjournment
October 1, 1985
Gilroy, California
The Special Joint Gilroy/Morgan Hill city Council Meeting
was called to order by Her Honor Roberta H. Hughan at 7:44 p.m.
Mayor Hughan noted that
discuss financing alternatives.
Plant Construction Project.
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the purpose of the meeting was to
for the 10n9-term SewerTr~atment
Present: Gilroy Council members: Sharon A. Albert, Donald
F. Gage, Paul V. Kloecker, Larry Mussal~em,John.E. Pate, Pete
Valdez, Jr. and Roberta H. Hughan.
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Present: Morgan Hill Councilmembers: Dean Flory, J. Robert
Foster, Neil Heiman and Lorraine Barke. Absent: William H. Brown.
Mr. Ed Lazzarini, Cqairman of the Joint Powers Citizens'
Sewer Advisory Finance Committee, addressed the Councils and re-
quested that the City Councils establish criteria for the Managing
Underwriters (Merrill, Lynch, Pierce, Fenner & Smith and .Pru-
dential-Bache) to submit proposals for the forthcoming Sewer Revenue
Bonds.
Mr. Kenneth Martin, First California Company, addressed the
Councils and introduced Mr. Kenneth Ough, representing Merrill,
Lynch, Pierce, Fenner & Smith, who explained arbitrage funding and
what his company would provide for the cities.
Mr. Lazzarini introduced Mr. Patrick Tuohy, representing
prudentia+-.Bache, who fu~therdescribed and presented a,~ritten
proposal to the Councils~ noting that their bond counsel was Web-
ster & Sheffield, New York.
Mayor Hughan asked if there was anyone further in the audience
wishing to present a proposal.
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Mr. Mark Curran, representing Sutro & Company, addressed the
Councils requesting that he be allowed a week to present a proposal
for the Cities of Gilroy and Morgan Hill.
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Mayor Hughan asked. if. there was anyone further in the'audi-
ence wishing to speak.
Mr. J. Paul Dumont, representing Wulff, Hansen & Company,
addressed the Councils further describing arbitrage investments.
Mr., Philip D. Assaf~ attorney and bond consultant.for the
City of Gilroy, addressed the Council and further explained the
rules of arbitrage.
Mr. Chris Cain, representing James M. Montgomery Consulting
Engineers, addressed the Councils and spoke to the proposed costs
of the Sewer Treatment Plant Project.
Mr. Ed Lazzarini addressed' the Councils 'noting that there is
reasonable expectation that the Cities will select the project that
will cost $70 million.
It was the general consensus of both City Councils that the
following criteria be established in order for the m~naging under-
writers to submit formal proposals to the cities prior to a Joint
Special Meeting of Gilroy/Morgan Hill city Councils: 1) Quality of
Investment - AAA Rating; 2) 2.% Net spread between cost and revenue;
3) Obtain what bond counsel will require of the Cities of Gilroy
and Morgan Hill for certification as to a viable project.
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At 10:09 p.m., Councils set Thursday, October 10, 1985, at
5:00 p.m. in Morgan Hill as a Joint Gilroy/Morgan Hill City Council
Special Meeting to review proposals from interested Bond Managing
Underwri ters,