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Adopted Minutes
January 14, 2002
Special Board Meeting

Call to Order

The meeting was called to order at 12:05 p.m.

Roll Call

Present: Heywood, Holden, Jeffries, Patterson, Pelleran
Absent: Canady, Rasmusson

Trustee Pelleran was present via conference call.

Trustee Canady arrived at 12:12 p.m.

Limited Public Comment Regarding Agenda Items

There were no comments from the public.

Closed Session

IT WAS MOVED by Trustee Heywood and supported by Trustee Patterson to go into closed session for the purpose of discussing the potential purchase of property.

Roll call vote:
Ayes: Heywood, Holden, Jeffries, Patterson, Pelleran
Nays: None
Absent: Canady, Rasmusson

Motion carried.

The Board went into closed session at 12:05 p.m.

The Board returned to open session at 1:03 p.m.

IT WAS MOVED by Trustee Canady and supported by Trustee Holden to return to open session.

Roll call vote:
Ayes: Canady, Heywood, Holden, Jeffries, Patterson, Pelleran
Nays: None
Absent: Rasmusson

The Board took a short break.

Roll call:
Present: Canady, Heywood, Holden, Jeffries, Patterson, Pelleran
Absent: Rasmusson

Sale of Bonds

President Cunningham proposed to the Board that the College move forward with the sale of the bonds as discussed during the millage. She asked Vice President Barbara Larson to present the options in selling the bonds.

Vice President Larson stated that the Board authorized a new bond sale of $58 million at the December 10 meeting. A two-issue approach is recommended for several reasons. The main reason being that the College has applied for capitol outlay dollars and if there is a chance that the College will receive capitol outlay funding it will be beneficial to the College to receive those dollars to fund half of Phase I instead having to borrow all of the funds at this time. Secondly, there are legal requirements that 85% of the bond proceeds be spent within the first three years. A schedule has been prepared that allows that to happen with the first bond sale at $43,250,000. The recommendation is that the first sale take place in February.

Vice President Larson reminded the Board that part of their authorization in December was to go with a negotiated recommended public competitive sale that offered several advantages. The primary advantage being that the College could time and market the sale. The College went out for bid for a senior underwriter. Stauder & Barch, the College's bond advisors, assisted in the review of proposals that were received and interviewing of the three bidders. The evaluation committee recommends the award be made to UBS PaineWebber as senior underwriter for 60% of the sale. It is recommended that Edwards Jones and A.G. Edwards participate as co-managers with 20% each. She said that by having multiple vendors it allows the College to take advantage of their brokers and the investors they are able to reach and gain the retailing strength of more firms to market the College's bonds.

President Cunningham stated that by approving the sale of the first bond issue the Board would be approving the awarding of the bid to UBS PaineWebber.

Chairperson Jeffries asked if the existing debt is figured into the information provided.

Vice President Larson responded that the existing debt is not figured into the information provided. The College has budgeted for the existing debt this year and will next year. It will drop each year and will cease to exist in the 2008-2009 fiscal year.

Vice President Larson stated that the recommendation before the Board is to approve going out with a bond issue of $43,250,000 or less depending on the final cash flow analysis on the day of sale. Understanding the Board's desire to keep the length of the payment terms as low as possible it is recommended that the total repayment schedule not exceed 18 years, but not be less than 15 years and it is assumed in this that there will be a second issue needed. The combined mill requirement pay total debt service for the two mills stay at or below .57 mill. Ultimately that will be known on the day of sale when the bonds are priced in Chicago at UBS PaineWebber.

IT WAS MOVED by Trustee Canady and supported by Trustee Holden to adopt the proposal in its entirety and proceed with the sale of bonds as outlined therein and approval of the contract award for bond underwriting services.

Roll call vote:
Ayes: Heywood, Holden, Jeffries, Patterson, Pelleran, Canady
Nays: None
Absent: Rasmusson

Motion carried.

Public Comment

There were no comments from the public.

Adjournment

IT WAS MOVED by Trustee Canady and supported by Trustee Heywood to adjourn the meeting.

Ayes: Canady, Heywood, Holden, Jeffries, Patterson, Pelleran
Nays: None
Absent: Rasmusson

Motion carried.

The meeting was adjourned at 1:13 p.m.

LCC Board of Trustees
Administration Bldg
Phone: (517) 483-5252
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