HomeMy WebLinkAboutCalled Commission Meeting February 17, 2005
CALLED MEETING COMMISSION CHAMBER
February 17, 2005
Augusta Richmond County Commission convened at 3:00 p.m., Thursday, February 17,
2005, the Honorable Marion Williams, Mayor Pro Tem, presiding.
PRESENT: Hons. Hankerson, Smith, Grantham, Beard, Sims, Boyles, members of
Augusta Richmond County Commission.
ABSENT: Hons. Bob Young, Mayor; Mays, Cheek and Colclough, members of Augusta
Richmond County Commission.
Also Present: Andy Tisdale, Attorney; Fred Russell, Administrator; Lena Bonner, Clerk
of Commission.
The Invocation was presented.
The Pledge of Allegiance was recited.
1.Consider and approve second Supplemental Bond Resolution for Airport Revenue
Bonds 2005 Series and related documents as revised by Bond Counsel through
February 17, 2005.
Mr. Tisdale: Mr. Michael Wheat of Merrill Lynch, who is the underwriter, is here to
address any questions you may have.
Mr. Williams: Why were we asked to come back today and will there be any savings
with this?
Mr. Wheat: We don’t ask for people to come to special meetings lightly. This
transaction has taken over eight months to get completed. On the schedule we had established
we contemplated a spread between the mailing of the official statement and pricing that would
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allow for us to mail it on the 7 of this month and to price a week later. Unfortunately,
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circumstances change and we found ourselves unable to mail precisely on the 7. We had to
delay that by a day or so and having lost what was a very aggressive week to engage in our
marketing, we asked if we could have a special meeting of the Commission to give us another
couple of days to leave the official statement out for buyers to be informed about the transaction,
to get informed about the credit and to agree to participate in the transaction. We thought it was
necessary in our professional experience to extend the period for marketing for the information
to be available to bring more buyers to the transaction, because in fact, that does have a positive
effect on your pricing. It does lower the rates you would get.
Mr. Williams: I thought this would bring in savings for this government. Is the amount
still the same and there is no difference from what we previously thought?
Mr. Wheat: As a result of our ability to market the bonds effectively, we were able to
adjust the interest rates that we had gone out with in a POS. We had an interest rate of over 6%
in the POS that was mailed. We sold the bonds at interest rates that were nearly 1% lower than
those assumed rates. So if you’re asking me did you save money by delaying the sale, my
answer to you is yes. If you’re asking me if I can quantify that, the answer is it is difficult. The
effective pricing that you received was the benefit of the activities we undertook to market the
bonds. In the course of the week that the official statement was out to the investment community
we were able to have an institutional conference call where potential buyers could ask questions
of the airport staff and their advisors, get comfortable with the credit and then ask further
questions over the next several days. Over the course of the four or five days where this
information was available, we tracked the calls received from institutional buyers and we had
about forty calls during that time. That was a phenomenal amount.
Mr. Grantham: How long did it take to sell the issuance of the bonds?
Mr. Wheat: The actual pricing occurred yesterday and it was through an order period that
lasted about two hours. This period is the benefit of a seven day marketing process in which
they pre-market. They are putting out indications of a scale, getting expressions of interest back
from buyers as to whether or not they like that scale and would participate at that level. There is
give and take between our desk and potential buyers. The order period benefited and was the
result of the active marketing efforts that couldn’t start until the POS was mailed. The buyers
have to have time to think about it, review the credit and get comfortable with the credit and that
is more than a three day process. We had to give them time to do that.
Mr. Tisdale: Can you roughly give us any amount of savings over the thirty year period
of the bond?
Mr. Wheat: The numbers in the POS assumed an interest rate above 6%. We sold the
bonds at an interest rate of three series of 5.15, 5.35 and 5.45%. I believe the number shows in
our analysis was approximately $6 million dollars saved over the life of the bonds.
Mr. Boyles: I’d like to move that we approve Item 1.
Mr. Grantham: Second.
Mr. Boshears: The estimates we had were annual debt service of $1.7 million each year
and by getting the interest rates they got, it has lowered it about $200,000 each year and that
brings our cost per emplaned passenger down from $8.00 per passenger to just below $7.00 per
passenger. It makes us more marketable to the airlines.
Mr. Hankerson: What revisions were made by the bond counsel?
Ms. Carrie Finister: I’m Carrie Finister with Sutherland, Asbill and Brennan. The
revisions were to add in the final pricing information that we received yesterday.
Mr. Hankerson: Has the attorney gone over this?
Mr. Tisdale: Mr. Shepard has done that.
Mr. Boyles: I’d like to amend my motion to include Items 1 and 2.
Mr. Grantham: The seconder will accept.
2.Consider and approve Airport Revenue Bond Purchase Agreement 2005 Series and
related documents as revised by Bond Counsel through February 17, 2005.
Mr. Williams abstains.
Motion carries 6-1.
[MEETING ADJOURNED]
Lena J. Bonner
Clerk of Commission
CERTIFICATION:
I, Lena J. Bonner, Clerk of Commission, hereby certify that the above is a true and correct copy
of the minutes of the Called Meeting of Augusta Richmond County Commission held on
February 17, 2005.
________________________
Clerk of Commission