08/27/1991 City CouncilTHESE MINUTES SUBJECT TO
SEPTEMBER 3, 1991 APPROVAL
EDMONDS CITY COUNCIL MINUTES
August 27, 1991
(Work Meeting)
The regular work meeting of the Edmonds City Council was called to order at 7:00 p.m. by Mayor
Larry Naughten at the Library Plaza Room, 650 Main St., Edmonds. All present joined in the flag
salute.
PRESENT ABSENT STAFF
Larry Naughten, Mayor William Kasper, Arrt�Tousler, Admin. Svs. Dir.
Steve Dwyer, Councilmember Councilmember Peter Hahn, Commun. Svs. Dir.
Roger Hertrich, Councilmember Jack Wilson, John Wallace, City Attorney
Jo -Anne Jaech, Councilmember Council Pres. Jackie Parrett, City Clerk
John Nordquist, Councilmember
Jeff Palmer, Councilmember
CONTINUED REVIEW OF PROPOSAL TO PURCHASE EDMONDS SHOPPING CENTER
Following a short introduction by Administrative Services Director Art Housler, Dick Ehlers of
Dain Bosworth explained a five-year bond call versus the more traditional ten-year bond call.
This was in response to questions from the Council at the previous meeting. He observed. that the
taxable municipal bond market is very thin at this time, and his firm had determined 1% as the
operating parameter in doing the analysis. He said if you have a five-year call the interest
rate will be 1% higher than it otherwise would be. He noted that $118,000 more interest expense
would be paid for a five-year call, but he added that if the Council was confident they would con-
vert the property to public use and rgfund with tax-exempt bonds in 5, 6, 7, or 8 years, they
would save money on a five-year call, but otherwise it would cost:. His firm believes there to be
a market for five -year -call bonds, and he said they would try to market first with retail inves-
tors as there had been some resistance from institutional investors because of the five-year call.
Councilmember Hertrich expressed concern that on the one hand they were talking about buying a
piece of property to let it finance itself, but at the same time it was being suggested to make
it public use quickly, so he was concerned as to how it was going to pay for itself.
Bob Yeastings of Yeastings & Hughes, the City's independent investment advisor, had submitted a
letter to the Council reviewing the Dain Bosworth information. He said the information Dain
Bosworth had provided was reasonable. He was more conservative on the 1% differential, saying in
the first five years the bonds would not be callable so the person who buys the six -year call is
not going to have much of a premium --not J%, and it moves gradually up to 20 years before they
will want the 1%. He felt it was a smart thing to put the five-year call in if they thought they
would"have a public use for the property in five years. He said it provides flexibility as to
what they wanted to do with property. He thought the calls Dain Bosworth had projected appeared
to be reasonable and he said the market has been strong and it is a good time to sell bonds.
Dick Ehlers added that the package is with Moody's, and they would do the analysis the following
day and he expected a reading back late Thursday or Friday. He said his salespeople have been
soliciting interest in the bonds. Also, he said the official statement would have to be printed
the following day.
Art Housler stated that a report from Greenwood, Ohlund & Co. had been received and the City
Attorney advised that it should be discussed in Executive Session. The.Council recessed to Execu-
tive Session at 7:18 p.m. for an expected 15-20 minutes to discuss the report and for a report on
litigation.
The meeting was called back to order at 8:35 p.m. City Attorney John Wallace summarized the
Executive Session discussion saying the CPA firm of Greenwood, Ohlund & Co., represented by Pat-
rick Ebert, provided a report of their analysis of the proprietary information provided .by the
seller to the City. He noted that proprietary information is required to be kept confidential
until such time as the City goes forward to acquire the property. Also, he said Mr. Voorhees and
he had discussed matters of litigation with the City Council.
Councilmember Dwyer asked how much of the conclusions reached by Mr. Ebert was allowable for the
Council. to mention in the current setting, and Mr. Wallace responded that anything that in any
way .revealed any of the proprietary information was required to be kept confidential. Several
more questions were asked as to what they could discuss, referring to specific sentences (identi-
fied by sentence or paragraph number) in the confidential report, but none of it could be dis-
cussed at this time.
COUNCILMEMBER PALMER THEN MOVED, SECONDED BY COUNCILMEMBER NORDQUIST, THAT BASED ON THE RESULTS
OF THE INSPECTION (SPECIFICALLY THE CONDITION OF THE ROOF), INFORMATION IN THE REVENUE AND EX-
PENSE ANALYSIS AND THE DIRECTION THEY INDICATE, AND OTHER DATA PRESENTED, THAT THE MAYOR AND CITY
ATTORNEY BE DIRECTED TO GIVE IMMEDIATE WRITTEN NOTICE TO THE SELLER THAT THE CITY IS EXERCISING
ITS OPTION TO TERMINATE THE OFFER; I.E., NO PURCHASE. Councilmember Dwyer clarified that the
revenue and expense analysis is what was prepared by Mr. Ebert. Councilmember Hertrich stated
the numbers do not work out, even though he had several special uses in mind for the property.
Councilmember Dwyer said his preference was to extend the options that were given them, so he
would vote against the motion, but he would not have voted yes on a motion to proceed. A ROLL
CALL VOTE WAS TAKEN ON THE MOTION, WITH COUNCILMEMBERS PALMER, JAECH, NORDQUIST, AND HERTRICH
VOTING YES, AND WITH COUNCILMEMBER DWYER VOTING NO. MOTION CARRIED.
It was noted that in light of the action taken on this item, action on Item 2 of the agenda was
moot (a proposed resolution establishing a public process to prioritize public interests for the
property).
There was no further business to come before the Council, and the meeting was adjourned at 8:45
P.M.
THESE MINUTES ARE SUBJECT TO SEPTEMBER 3, 1991 APPROVAL.
THE OFFICIAL SIGNED COPY OF THESE MINUTES IS ON FILE IN THE CITY CLERK'S OFFICE.
JAC ELINE G. P RRETT, City Clerk
EDMONDS CITY COUNCIL MINUTES
Page 2 August 27, 1991
AGENDA
EDMONDS CITY COUNCIL
PLAZA MEETING ROOM -LIBRARY BUILDING
7 :0 0 -- ! 0: 00 P.m.
AUGUST 27, 1991
WORK MEETING -,NO AUDIENCE PARTICIPATION
CALL TO ORDER
FLAG SALUTE
1. CONTINUED REVIEW OF PROPOSAL TO PURCHASE EDMONDS SHOPPING CENTER (50 MINUTES)
2. PROPOSED RESOLUTION 721 DECLARING VARIOUS PUBLIC PURPOSES FOR EDMONDS (10 MINUTES)
SHOPPING CENTER PROPERTY AND ESTABLISHING A PUBLIC PROCESS TO PRIORI-
TIZE COMPETING PUBLIC INTERESTS FOR SAID PROPERTY
THE PUBLIC IS INVITED TO ATTEND
PARKING AND MEETING ROOMS ARE HANDICAPPED ACCESSIBLE