Jun 10, 2025 Fiscal Committee Meeting

GOOD MORNING ALL. IT IS 830 HERE THIS MORNING.

[00:00:03]

[1. Resolution to amend City Commission Policy 400-01 titled “Statement of Investment Policies, Procedures, and Objectives”]

IS THERE A MOTION. SO MOVE SUPPORT.

ALL RIGHT. MOVED AND SUPPORTED.

GOOD MORNING COMMISSIONERS. GOOD MORNING. THIS MORNING WITH OUR UPDATE TO OUR POLICY I'M GOING TO HAVE OUR INVESTMENT OFFICER LEVI BOLT TALK ABOUT THAT.

YOU WERE GIVEN A COPY OF OUR MEMO OF THE CHANGES THAT ARE IN THERE.

THERE'S REALLY THOSE ARE THE CHANGES THAT ARE THERE.

MOST OF THE STUFF THAT YOU RECEIVED IS A RED LINE DOCUMENT, WHICH REALLY WAS MOSTLY FORMATTING MOVES. CHANGE ADDS TO TO JUST CLARIFY THE DOCUMENT THAT ARE NOT MATERIAL TO THE IMPACT OF THE INVESTMENT POLICY.

IT'S THE ITEMS THAT ARE IN THE MEMO THAT ARE THE KEY.

AND SO WITH THAT, I'M GOING TO INTRODUCE MR. LEVI BOLT, OUR INVESTMENT OFFICER, TO GO OVER THIS ITEM. GOOD MORNING COMMISSIONERS.

GOOD MORNING. AS A. BEST PRACTICE.

THE CITY TREASURER'S OFFICE REGULARLY REVIEWS OUR INVESTMENT POLICY ON AN ANNUAL BASIS.

PART OF THAT REVIEW CONSISTS OF BASICALLY GETTING FEEDBACK FROM OUR PARTNERS.

OUR EXISTING POLICY WAS WRITTEN BACK IN 2015.

AT THE TIME, WE RETAINED A THIRD PARTY CONSULTANT.

WE DIDN'T MENTION IT AT THE TIME, BUT I THINK HE MIGHT HAVE BEEN UNDER THE IMPRESSION THAT IT WAS BEING PAID BY THE WORD.

SO WHAT WE FOUND, AND AS THE POLICY WAS GRADUALLY MODIFIED OVER TIME AS THOSE REVIEWS WERE CONDUCTED, I GOT TO THE POINT WHERE, BASICALLY, OKAY, IN ORDER TO ACTUALLY REWRITE THIS THING, WE JUST NEED TO PULL OUT A BLANK SHEET OF PAPER AND START OVER.

SO THE POLICY BEFORE YOU WAS DESIGNED IN ORDER TO BE CERTIFIED BY TWO DIFFERENT ORGANIZATIONS, THE ASSOCIATION OF PROFESSIONAL TREASURERS OF THE UNITED STATES AND CANADA, AS WELL AS THE GOVERNMENT AND INVESTMENT OFFICERS ASSOCIATION. A LOT OF THE FEEDBACK THAT WAS INCORPORATED INTO WRITING THIS POLICY WAS FROM SEAN EDGAR, WHO'S THE DIRECTOR OF INVESTMENTS FOR THE STATE OF IDAHO.

WE HAD A VERY LONG CONVERSATION WITH HIM AT A GOP CONFERENCE IN MARCH, AS WELL AS GREG PROUST, WHO'S THE CHIEF INVESTMENT OFFICER OF ROBINSON CAPITAL, AS WELL AS USC'S PRIMARY POINT PERSON WHEN IT COMES TO INVESTMENTS.

THE PRIMARY CHANGES TO THE INVESTMENT POLICY, FIRST OFF, WOULD BE CREATION OF AN ADVISORY COMMITTEE AD HOC BASICALLY TO ASSIST JOHN AND I AS WE ARE MAKING INVESTMENT DECISIONS.

PRIMARILY THIS THIS WOULD BE TO GIVE US A BETTER HANDLE ON THE CITY'S OWN CASH FLOW BECAUSE THE MAJOR INVESTMENT STRATEGY THAT WE EMPLOY IS TO OFFSET EXISTING CASH FLOW DEFICITS AND LIABILITIES WITH INVESTMENTS THAT HAVE POSITIVE CASH FLOW TO OFFSET.

AND OBVIOUSLY, YOU HAVE TO HAVE A VERY, VERY CLEAR PICTURE OF WHEN MONEY IS BEING SPENT, HOW MUCH WHERE, YOU KNOW, IN ADDITION TO JUST THE NORMAL FISCAL CYCLE OF THE CITY IN ORDER TO DO THAT.

SECOND THERE ARE SOME ADJUSTMENTS TO ALLOCATION LIMITS THAT'S FAIRLY TYPICAL AS MARKET CHANGES AND DIFFERENT INVESTMENTS CHANGE IN RISK PROFILES, THOSE NEED TO BE ADJUSTED OVER TIME.

THERE WAS A TECHNICAL CHANGE IN REDUCING THE MAXIMUM MATURITY LIMITS OF SECURITIES WITHIN THE PORTFOLIO. THAT'S IMPORTANT BECAUSE IT LIMITS THE AMOUNT OF INTEREST RATE, RISK AND REINVESTMENT RISK THAT THE CITY WOULD BE EXPOSED TO AT ANY POINT IN TIME.

SOME OF THIS, SOME OF THAT WAS PROMPTED BY A CHANGE IN INVESTMENT ACCOUNTING SOFTWARE PROMPTED BY THE ERP PROJECT.

FRANKLY, THE EXISTING POLICY SETS A STANDARD OF SEVEN YEARS WEIGHTED AVERAGE LIFE.

THAT'S A VERY TECHNICAL CALCULATION THAT OCCURS.

AND UNFORTUNATELY, THE NEW INVESTMENT ACCOUNTING PLATFORM JUST SIMPLY DOESN'T HAVE THAT PARTICULAR CALCULATION.

SO WE'RE SWITCHING TO WEIGHTED AVERAGE MATURITY.

THE OTHER THING IS QUITE FRANKLY, SEVEN YEARS WEIGHTED AVERAGE LIFE WAS TOO LONG. IT WAS A LIMIT THAT WAS NOT MEANINGFUL.

SO JUST BY CHANGING BOTH THE CALCULATION AS WELL AS SHORTENING IT UP A LITTLE, IT ADDS A LITTLE BIT OF TEETH TO THE TO THE LIMIT.

ONE OF THE OTHER MAJOR CHANGES THAT SOME OF OUR BANKING PARTNERS HAVE ALREADY NOTICED IS WE'RE EMPHASIZING LATERALIZATION OF DEPOSITS.

AS YOU KNOW, FDIC COVERAGE ONLY GOES UP TO $250,000 ON DEPOSITED MONIES.

THERE'S POTENTIAL FOR UP TO 500 DEPENDING ON ACCOUNT STRUCTURES.

[00:05:07]

NOW THERE'S DIFFERENT WAYS WE CAN STRUCTURE.

INTEREST BEARING DEPOSITS IN ORDER TO PROTECT THE CITY IN CASE OF BANK FAILURES.

COLLATERAL IS ONE OF THOSE, AND IT'S ONE THAT WE HAVE NOT REALLY PURSUED IN THE PAST, SIMPLY BECAUSE THE STATE OF MICHIGAN DOES NOT REQUIRE MUNICIPALITIES TO DO SO. HOWEVER, THIS POLICY CHANGE IS A RECOGNITION THAT THAT IS A BEST PRACTICE, EVEN IF IT IS NOT LEGALLY REQUIRED BY THE STATE.

AND THEN FINALLY QUITE FRANKLY, CONTINUING EDUCATION SO THAT I KNOW WHAT I'M TALKING ABOUT. SO IF YOU HAVE ANY QUESTIONS ABOUT THE NEW POLICY, I'M HAPPY TO ANSWER. GREAT.

THANK YOU FOR THAT. LET ME TURN TO MY COLLEAGUES FIRST AND SEE IF THERE'S ANYTHING THEY'D LIKE TO ASK. QUESTIONS OR COMMENTS.

YOU LOOK LIKE THERE'S SOMETHING YOU WANT TO SAY. I CAN ASK A PERSON FIRST IF YOU WANT TO THINK ON IT. WELL, I GUESS IT'S A QUESTION.

WITH A QUESTION. SURE.

GO AHEAD. OKAY. WELL, FIRST OF ALL, THANK YOU FOR YOUR WORK ON THIS. WE CERTAINLY WANT YOU TO KNOW WHAT YOU'RE TALKING ABOUT WHEN IT COMES TO OUR CITY'S INVESTMENT. SO THANK YOU FOR THAT.

JUST MAYBE 30S OR LESS.

COULD YOU EXPLAIN THE LATERALIZATION AND HOW THAT DIFFERS FROM WHAT WE'RE CURRENTLY DOING? SURE. IN THE PAST, BASICALLY WE HAD SIGNIFICANT AND COLLATERALIZED DEPOSITS.

WHEN I STARTED AND THIS WAS RELATIVELY SHORTLY IN THE AFTERMATH OF THE FINANCIAL CRISIS, WE HAD INDIVIDUAL CERTIFICATES OF DEPOSITS IN EXCESS OF $20 MILLION.

THAT WERE YOU KNOW, THAT WOULD BE 19,000,970 907.

DO THE MATH. THAT WOULD BE COMPLETELY UNINSURED.

SO THERE'S YEAH, IT'S ONE OF THOSE.

SIMPLY AS A MATTER OF IN THE WAKE OF THREE BANK FAILURES RECENTLY SOME OF WHICH AND A SIGNIFICANT DOWNGRADE TO A BANK THAT WE DO DO BUSINESS WITH.

WE WE THOUGHT IT WAS A NECESSARY STEP.

OKAY. YEP. THANKS FOR THAT INFORMATION.

COMMISSIONER KNIGHT. OTHERWISE, WE CAN WE CAN FOLLOW UP LATER TO.

I GUESS THE QUESTION IS, WHAT QUESTIONS SHOULD WE BE ASKING? I THINK REALLY THE IF YOU'RE ASKING A QUESTION ABOUT IT, IT'S LIKE AS COMMISSIONER ROBBINS ASKED, IS WHY WOULD YOU HAVE A COLLATERALIZED ON A DEPOSIT? AND REALLY IS ABOUT OUR RISK EXPOSURE.

EVEN THOUGH THERE HAVE BEEN THREE BANK FAILURES, PEOPLE HAVEN'T LOST INTEREST OR THEIR PRINCIPAL.

BUT REALLY, IT HAS TO GIVE US THE SECURITY THAT WE KNOW THAT IF WE'VE GOT $10 MILLION IN A BANK ACCOUNT AND WE'RE PUTTING IT INTO A CERTIFICATE OF DEPOSIT, THAT WE'RE NOT GOING TO BE AT RISK OF LOSING ANY OF THAT MONEY OR HAVING THAT MONEY TIED UP FOR A LENGTHY PERIOD OF TIME IF THERE WERE ANY TYPE OF DEFAULT.

AND SO REALLY, IT'S A PROTECTION AND SECURITY PIECE FOR US TO HAVE THAT IN PLACE VERSUS AN UNSECURED DEPOSIT. SO REALLY IT'S ABOUT OUR CONCEPT OF SAFETY OF PRINCIPLE.

THAT'S THE OVERARCHING GOAL OF OUR POLICY IS SAFETY LIQUIDITY YIELD.

AND SO WE WANT TO MAKE SURE THAT WE HAVE THOSE PROTECTIONS IN PLACE.

OTHER ITEMS I MEAN, WHEN WE TALK ABOUT THE CONTINUING EDUCATION, IT'S NOT JUST FOR MR. BOLT.

MY ENTIRE STAFF ARE WE HAVE 4 OR 5 PEOPLE THAT WORK ON THIS PROGRAM.

WE MAKE SURE THAT THEY HAVE DIFFERENT CERTIFICATIONS LIKE THE CFM, WHICH IS A CERTIFIED PROFESSIONAL FUNDS INVESTMENT MANAGER ROLE.

SO THEY HAVE THE TRAINING SO THAT AS WE'RE COMMUNICATING AS A GROUP AND TALKING WITH LEVI, WE UNDERSTAND HOW THESE ITEMS ARE MOVING AND CHANGING AND HOW WE'VE INVESTED OUR FUNDS SO THAT WE HAVE MULTIPLE EYES ON THAT PORTFOLIO.

IT'S NOT JUST A ONE OFF ITEM.

SO WE HAVE FOUR PEOPLE THAT HAVE THOSE DESIGNATIONS RIGHT NOW.

AND THAT'S IMPORTANT FOR US BECAUSE THAT'S CONTINUITY OF OUR WORK.

AS MR. BOLDT STATED, THE SEVEN YEAR WEIGHTED AVERAGE MATURITY WE WENT THROUGH A PERIOD WHERE THE THE FED HELD DOWN INTEREST RATES FOR SIX, SEVEN, EIGHT YEARS, ARTIFICIALLY DOWN TO 0.25%.

SO AS WE WERE BUILDING OUT OUR POLICY, WE'RE LOOKING TO TRY TO COVER THAT GAP SO THAT AS WE INVEST OUT, WE CAN HOPEFULLY AVOID THAT REALLY LOW INTEREST RATE ENVIRONMENT AND KEEP MORE CONSISTENT EARNINGS OVER TIME.

BUT NOW, HINDSIGHT BEING 2020, THAT SEVEN YEARS ISN'T REALLY ACCURATE.

AND SO THAT'S WHY WE ALSO MOVED IT BACK TO FIVE YEARS.

[00:10:03]

CAN YOU EXPLAIN A LITTLE BIT MORE ABOUT THESE DIFFERENT TYPE OF BULLET POINTS THAT YOU'RE LOOKING TO REVISE IN YOUR POLICY AND HOW IT PROTECTS NOT ONLY THE CITY, BUT HOW IT IS REALLY DRIVEN ON THE SAFETY OF PRINCIPAL LIQUIDITY OF THE FUNDS AND THE YIELDS THAT WE EARN. THE THREE GUIDING PRINCIPLES THAT WE HAVE IN OUR POLICY.

THANK YOU. TO HELP ANSWER YOUR QUESTION ABOUT QUESTIONS.

YES. COOL. I SEE MISS MCLAREN'S GOT SOME.

I THINK THAT'S, YOU KNOW, GREAT FOR COMMISSIONER KNIGHT TO MAKE THAT COMMENT. I WILL SAY JUST IN OUR FINANCIAL POLICIES IN GENERAL, THE TREASURER AND I AND I STARTED TALKING TO OUR DEPUTY CITY COMPTROLLER AS WELL ABOUT WE HAVE ALL THESE POLICIES IN PLACE.

A LOT OF THEM CAME IN AFTER THAT GREAT RECESSION.

AND I LOOK AT THEM AS THEY WERE PUT UP AS SCAFFOLDING.

AND NOW AS WE APPLY THEM AND SEE, SEE THE TEST OF TIME.

A LOT OF THEM ARE TEN, 20, EVEN 30 YEARS OLDER.

IT'S ON US TO GO BACK, REEXAMINE THEM.

SEE? OKAY. HOW ARE WE USING THESE IN PRACTICE? ARE THERE LOOPHOLES OR ARE THERE OTHER WAYS TO YOU KNOW, THAT THINGS THAT WE FIND IMPORTANT THAT WE WOULD RECOMMEND YOU AS A BODY TO ADOPT TO, YOU KNOW, JUST TO MAKE SURE WE ARE FINANCIALLY SOUND AND WE ARE GOING AFTER GREAT INVESTMENTS IN HOW WE PRACTICE THAT, THINGS LIKE THAT.

SO, YOU KNOW, PROBABLY IN THE NEXT FEW YEARS YOU'LL SEE A COUPLE OTHER POLICIES BUBBLE UP.

WE'VE ALWAYS TALKED ABOUT THE DEBT POLICY AND, AND THERE'S A BIG LIST OF OTHERS.

WE WERE TALKING TO OUR DEPUTY, OUR NEW DEPUTY COMPTROLLER, ABOUT ACTUALLY AT OUR MEETING THE OTHER DAY. SO SO YEAH, IT'S I'LL JUST SAY THAT GENERALLY YOU GUYS MIGHT, MIGHT SEE A FEW MORE OF THESE POLICIES IN THE FUTURE. OKAY.

THAT'S GOOD TO KNOW. I APPRECIATE THAT AND I APPRECIATE THE COMMENT TOO ABOUT CONTINUITY.

I THINK YOU KNOW, WE DEAL WITH A LOT OF MONEY AT THE CITY, AND WE WANT OUR RESIDENTS TO KNOW THAT IT'S IN GOOD HANDS. AND YOU KNOW, I KNOW THAT THE TEAM HAS, YOU KNOW, THE KNOWLEDGE TO BE ABLE TO DO THAT. BUT I THINK HAVING THOSE CREDENTIALS AND THE CONTINUING EDUCATION JUST SHOWS TO THE PUBLIC AND PROVIDES EVEN MORE LEGITIMACY THAT THAT WE'VE GOT SOME AWESOME EXPERT PEOPLE ON OUR, ON OUR TEAM DOING THAT. SO I APPRECIATE THAT NOTE.

AND ALSO WHEN WE'RE DONE, WHEN WE'RE SO AFTER APPROVAL SEEKING THE APPROVAL, THEN WE'LL GO OUT TO THESE DIFFERENT ORGANIZATIONS, THE USAC AND THE IOA AND GET THOSE POLICIES CERTIFIED.

WE'LL FILE FOR CERTIFICATION ON THOSE TWO.

SO WE'LL GET THAT DESIGNATION ADDED TO THIS AS WELL IN THE FUTURE.

AWESOME. ALL RIGHT. WELL, I WILL CALL THE QUESTION THEN.

ALL THOSE IN FAVOR SAY AYE.

AYE AYE AYE. THOSE OPPOSED.

THAT CARRIES. THANK YOU, MISTER BOLT.

ITEM NUMBER TWO, WE'VE GOT A RESOLUTION APPROVING A NO COST AMENDMENT TO A JOINT

[2. Resolution approving a no cost amendment to a Joint Funding Agreement with the United States Geological Survey]

SUPPORT. ALL RIGHT. MOVED IN SUPPORT. WE'VE GOT MR. BERKMAN, OUR CITY ENGINEER, HERE, TO TELL US ABOUT THIS ONE. YES.

GOOD MORNING, COMMISSIONERS.

WE'VE BEEN WORKING WITH THE USGS TO HAVE A RIVER LEVEL GAUGE AND WATER QUALITY STATION ON THE GRAND RIVER AT THE NORTH PARK STREET BRIDGE.

THAT STATION PROVIDES US IMPORTANT INFORMATION AS WE PLAN AND EVALUATE PROJECTS ALONG THE RIVER. IN JANUARY, A COMMISSION APPROVES A NEW JOINT FUNDING AGREEMENT THAT COVERS THE STATION THROUGH SEPTEMBER OF 2027.

HOWEVER, AT THAT TIME, THERE SHOULD HAVE BEEN AN AMENDMENT TO THE ORIGINAL AGREEMENT FOR THE WATER QUALITY MODELING AND REPORT THAT WE'RE ANTICIPATING TO EXTEND THAT COMPLETION DATE FROM THE END OF 2024 TO THE END OF 2025.

AND SO THIS SEEKING YOUR APPROVAL OF THIS NO COST AMENDMENT TO THAT AGREEMENT.

AWESOME. THANK YOU. ANY QUESTIONS OR COMMENTS, COLLEAGUES. ALL RIGHTY.

I WILL CALL THE QUESTION. ALL THOSE IN FAVOR SAY AYE. AYE.

THOSE OPPOSED IT CARRIES.

[3. Resolution accepting a $5,000,000 grant award from the State of Michigan Department of Labor and Economic Opportunity for improvements at Plaza Roosevelt and Roosevelt Park]

SUPPORT MOVED AND SUPPORT.

WE'VE GOT MR. MARQUARDT HERE THIS MORNING. GOOD MORNING COMMISSIONERS. THIS IS A DIRECT APPROPRIATION FROM THE STATE OF MICHIGAN THAT WILL BE SPLIT AMONGST TWO DIFFERENT PROJECTS, THE FIRST OF WHICH IS PLAZA ROOSEVELT, CURRENTLY UNDER CONSTRUCTION.

AND WE ARE ALLOCATING $300,000 OF THIS 5 MILLION TOWARD THAT PROJECT FOR A TOTAL OF $2.3 MILLION. THIS PROJECT WILL BE COMPLETED BY THE END OF THIS YEAR, WITH FINAL LANDSCAPING ON THE PARK PROJECT TO BE COMPLETED WITHIN THE FIRST COUPLE OF MONTHS OF 2026. THE SECOND PROJECT IS ROOSEVELT PARK, AND A $2.5 MILLION OF CAPITAL PARK CAPITAL FUNDING IS GOING TOWARD THAT PROJECT IN 4.7 OF THIS DIRECT ALLOCATION TOWARD THIS PROJECT, FOR A TOTAL OF 7.2. AND THIS PROJECT WILL GO UNDER CONSTRUCTION STARTING IN EARLY 2026, WITH COMPLETION BEFORE THE AGREEMENT.

TERMINATION OF THIS WITH THE STATE OF MICHIGAN BY 2027.

OKAY, THANKS. AND CAN YOU JUST VERY BRIEFLY REMIND MAYBE THOSE WATCHING WHAT WHAT ALL THAT INCLUDES THE FOR THE ROOSEVELT PARK PIECE SPECIFICALLY BECAUSE I KNOW IT'S BEEN A WHILE SINCE WE'VE HEARD ABOUT THAT. YEAH, DEFINITELY. THE ROOSEVELT PARK PROJECT WILL INCLUDE PRIMARILY THE RENOVATION OF THE EXISTING LODGE FACILITY AND GYM AMENITIES

[00:15:05]

AWESOME. SUPER EXCITED ABOUT THAT ONE.

ALL RIGHT. ANY QUESTIONS OR COMMENTS ON THAT ONE, COLLEAGUES. ALL RIGHTY.

ALL THOSE IN FAVOR SAY AYE.

AYE AYE. THOSE OPPOSED? THAT CARRIES. ITEM NUMBER FOUR, WE'VE GOT A RESOLUTION AUTHORIZING FISCAL

[4. Resolution authorizing FY2026 insurance renewals with various providers for a total cost of $3,249,378.00]

SO MOVE. SUPPORT. ALL RIGHT.

MOVED AND SUPPORTED. GOOD MORNING.

WELCOME. GOOD MORNING, COMMISSIONERS.

ERIC ERIC VON HERE, RISK MANAGER.

THIS IS YOUR ANNUAL INSURANCE RENEWAL PACKAGE FOR FISCAL YEAR 26.

SIX. THIS IS A KEY COMPONENT OF OUR RISK MANAGEMENT STRATEGY, ENSURING THAT THE CITY OF GRAND RAPIDS IS ADEQUATELY PROTECTED ACROSS ALL MAJOR LIABILITY, ASSET AND ASSET CATEGORIES.

OUR BROKER, GALLAGHER, WORKED CLOSELY WITH US TO REVIEW MULTIPLE QUOTES ON MULTIPLE POLICIES AND WORK CLOSELY TO NEGOTIATE FAVORABLE TERMS IN A STABILIZING MARKET. LIKEWISE, THE MICHIGAN MUNICIPAL RISK MANAGEMENT AUTHORITY, MMRDA, DID THE SAME. THEY CALCULATED OUR PREMIUM.

WE DID SEE AN INCREASE IN THEIR PREMIUM.

HOWEVER, YOU'LL SEE AS WE GET INTO THE SUMMARIES OF OUR KEY POLICIES THAT THERE HAS BEEN SOME SIGNIFICANT SAVINGS TO THE CITY OVERALL AS A RESULT.

THIS IS A PORTFOLIO THAT BALANCES STRONG COVERAGE, RESPONSIBLE COST CONTAINMENT.

SO LET'S JUMP INTO THE SUMMARIES HERE.

WE'LL START WITH OUR PROPERTY INSURANCE PREMIUM.

THAT'S WITH CHUBB. GALLAGHER DID GO OUT TO MARKET ON THIS TO GET QUOTES FROM MULTIPLE CARRIERS. 10 OR 15, I BELIEVE.

A LOT OF THE CARRIERS WOULDN'T INSURE A MUNICIPALITY OF OUR SIZE.

OTHER CARRIERS WOULD ONLY INSURE PORTIONS OF THINGS THAT WE NEEDED, WHICH MEANT WE WOULD HAVE TO GO OUT TO GET OTHER ONE OR MORE CARRIERS TO SATISFY THE NEED FOR OUR COVERAGE IN THAT AREA.

BUT OVERALL, CHUBB REMAINED.

THE BEST AND MOST APPROPRIATE OPTION FOR US ARE BECAUSE OF THE COMPETITIVE MARKET.

OUR PREMIUM WITH CHUBB DID DECREASE THIS YEAR, TOO, BY 6.1%. THAT'S A THAT GIVES US A PREMIUM OF $1.38 MILLION THIS YEAR.

ANOTHER SAVINGS WE SAW WITH CHUBB WAS THE WE OPTED OUT OF TRIA COVERAGE WITH CHUBB.

TRIA IS A TERRORISM RISK INSURANCE ACT THAT WAS ESTABLISHED AFTER THE 9/11 EVENTS.

IN THE 25 YEARS OR SO THAT THIS HAS BEEN AVAILABLE, THERE JUST HASN'T BEEN ANYTHING THAT'S BEEN PAID ON THIS TYPE OF POLICY.

SO WE'VE AND IT'S A GOVERNMENT THE GOVERNMENT IS THE ONE THAT DETERMINES WHAT QUALIFIES BASED ON CERTAIN MINIMUMS AND AND EVENTS, IF YOU WILL.

SO WE'VE GONE WITH THE STANDALONE POLICY THROUGH LLOYD'S OF LONDON.

THIS PREMIUM IS GOING TO BE $26,049.

THIS IS A MORE RESPONSIVE POLICY THAN THE FEDERAL TRIA.

THIS IS ONE THAT ALLOWS A CARRIER TO HAVE CARRIER BASED CLAIM DECISIONS WITH NO FEDERAL THRESHOLDS SPECIAL EVENTS, LIABILITIES THROUGH REST AND WORLD.

THIS COVERS CITY SPONSORED EVENTS LIKE VETERAN'S DAY AND MEMORIAL DAY PARADES.

MOST RECENTLY, WE COVERED THE BIRTHDAY CELEBRATIONS UNDER THIS POLICY.

AS WE CONTINUE TO ADD MORE EVENTS TO THE CITY.

WE ADD THEM TO THIS POLICY COVERAGE.

THIS YEAR'S PREMIUM IS $3,925.

EXCESS WORKERS COMPENSATION IS THROUGH MIDWEST EMPLOYERS.

WE ARE IN A NEW TWO YEAR AGREEMENT.

THE YEARLY PREMIUM FOR THAT IS $195,171.

DOLLARS. THIS MAINTAINS A SELF-INSURED RETENTION OF $750,000.

AND WHAT THIS IS, IS IF WE HAVE A WORKER'S COMPENSATION INJURY CLAIM THAT REACHES THAT THRESHOLD OF 750,000, IT GETS TRANSFERRED FROM OUR THIRD PARTY ADMINISTRATOR TO MIDWEST FOR CONTINUING HANDLING OF THAT CLAIM.

AND SPEAKING OF OUR THIRD PARTY ADMINISTRATOR, WE'RE USING A COMPANY CALLED COMP ONE. WE ARE IN THE THIRD AND FINAL YEAR OF THAT CONTRACT RENEWAL.

THIS YEAR'S PREMIUM IS $75,486.

ADDITIONALLY, WE HAVE GOVERNMENT CRIME COVERAGE THROUGH HANOVER INSURANCE. THIS COVERS FRAUD, THEFT, EMPLOYEE DISHONESTY CYBER RELATED RISKS.

THIS YEAR'S PREMIUM IS $10,496.

POLLUTION LIABILITY IS THROUGH BEASLEY.

THIS POLICY COVERS LIABILITIES FOR LANDFILL, LANDFILLS, TREATMENT PLANTS, ASBESTOS, ILLEGAL DUMPING, THINGS LIKE THAT. THIS IS A NEW POLICY.

WE ARE IN A THE BEGINNING OF A THREE YEAR PREPAID POLICY.

WE'RE PAYING UPFRONT $152,179.

OVER THE NEXT THREE YEARS, THE CITY WILL SAVE JUST OVER $12,400 ON THAT.

[00:20:02]

BRIAN. THANK YOU. YEAH.

WELCOME. THANK YOU. GOOD MORNING COMMISSIONERS.

MY NAME IS BRIAN PEARCE.

LIKE ERIC HAD MENTIONED, AND I'M REALLY EXCITED TO BE HERE THIS MORNING TO SEE ALL OF YOU.

MY TEAM AND I ACTUALLY SIT IN THAT BUILDING RIGHT OVER THERE, AND WE PLACE THE LINES THAT ERIC JUST WENT OVER FOR THE CITY.

SOMETHING WE CERTAINLY DON'T TAKE LIGHTLY.

WE ARE WITH GALLAGHER, THE THIRD LARGEST BROKER IN THE WORLD.

THE FIRST LARGEST IN PUBLIC ENTITY.

WE VERY WELL KNOW YOUR SPACE AND ARE REALLY EXCITED TO WORK WITH ERIC GOING FORWARD IN THE INSURANCE. I THINK WE REALLY HAD SOME STRONG RESULTS THIS YEAR.

PARTICULARLY STARTING IN THE SUMMERTIME, KIND OF DEVELOPING STRATEGY TO GO OVER THE RENEWAL, PARTICULARLY WITH PROPERTY.

SO IT DROVE A LOT OF SAVINGS THERE.

YOUR INSURANCE SPEND IS LARGELY MADE UP OF TWO DIFFERENT COMPONENTS.

SO THERE'S THE EXPOSURE PIECE AND THEN THERE'S THE RATE SIDE OF THINGS.

SO THE EXPOSURE PIECE, THE TWO LARGEST LINES BEING PROPERTY AND WORK COMP PROPERTY IS LARGELY DRIVEN BY TOTAL INSURABLE VALUE OR YOUR BUILDING VALUES.

THOSE WENT UP SIGNIFICANTLY THIS YEAR FOLLOWING OUR APPRAISAL RESULTS.

THE WORK COMP IS LARGELY DRIVEN BY PAYROLL WHICH IS ALSO UP.

SO HALF OF THE EQUATION IS NORTH.

THE OTHER SIDE OF THINGS BEING, THE RATE IS DEVELOPED BY REALLY FIVE DIFFERENT PIECES AND THE FIRST BEING YOUR LOSSES.

SO ERIC AND HIS TEAM HAVE DONE A PHENOMENAL JOB IN TERMS OF CONTROLLING LOSSES FOR THE CITY. PARTICULARLY IN PROPERTY, YOU HAVE NO LOSSES, ACCESS OF YOUR RETENTION IN THE PAST TEN YEARS.

THE NEXT PIECE LARGELY NOT IN YOUR CONTROL.

THE NEXT THREE PIECES ARE NOT YOUR CLASS OF BUSINESS.

YOU KNOW, OBVIOUSLY SOMEBODY WHO MANUFACTURES FIREWORKS IS GOING TO HAVE A SIGNIFICANTLY MORE COSTLY INSURANCE SPEND THAN A MUNICIPALITY.

THE NEXT PIECE IS YOUR GEOGRAPHY.

SO BEING IN THE MIDWEST, LARGELY YOUR INSURANCE SPEND IS LESS THAN IF YOU WERE ON THE COAST.

THE NEXT PIECE IS JUST THE INSURANCE MARKETPLACE AS A WHOLE.

ANOTHER THING WE DON'T HAVE A TON OF CONTROL OVER.

BUT LIKE ERIC HAD MENTIONED, WE HAVE A MARKET THAT IS STARTING TO STABILIZE. I WOULDN'T GO AS FAR AS SAYING IT'S A SOFT MARKET YET, BUT IT'S IMPROVING, WHICH IS GREAT GIVEN KIND OF THE LAST 3 TO 5 YEARS HAS BEEN A PRETTY CHALLENGING MARKET ON THE PROPERTY SIDE IN PARTICULAR.

THE LAST PIECE IS MY JOB IS HOW YOUR STORY IS TOLD IN THE MARKETPLACE.

SO WE STARTED VERY, VERY EARLY THIS YEAR IN THE SUMMERTIME, FOLLOWING YOUR APPRAISAL, SITTING DOWN WITH ERIC AND HIS TEAM AND DISCUSSING STRATEGY IN TERMS OF HOW WE CAN FRAME THE CITY'S EXPOSURE BEST TO THE MARKETPLACE, WHICH DROVE SOME REALLY STRONG RESULTS THIS YEAR.

YOU KNOW, LASTLY, I THINK THE COMBINATION OF THE EXPOSURE AND THE RATE DROVE OVERALL SAVINGS TO THE CITY, WHICH IS GREAT GIVEN THE INCREASE IN TOTAL INSURABLE VALUE AND PAYROLL. AND FOR THAT, I AM GRATEFUL FOR THE OPPORTUNITY TO BE IN FRONT OF YOU THIS MORNING AND TO CONTINUE TO PLACE YOUR INSURANCE.

THANK YOU. THANKS. THANK YOU.

BRIAN. LAST THING ON OUR RENEWALS IS GOING TO BE FOR OUR EXCESS LIABILITY COVERAGE THROUGH THE MMR, RMA, MICHIGAN MUNICIPAL RISK MANAGEMENT AUTHORITY.

OUR PREMIUM THIS YEAR INCREASED BY 11.4%, SO THAT GIVES US A PREMIUM OF $1.3 MILLION FOR THEM. WE'VE BEEN PART OF THE MMR HMA FOR QUITE SOME TIME, AND THERE ARE A LOT OF VALUE ADDED BENEFITS ASSOCIATED WITH THE MMR. MAY. ONE IN PARTICULAR IS OVER THE LAST 25 YEARS, THE CITY HAS SEEN OVER $770,000 IN GRANT FUNDING FOR VARIOUS PROJECTS ACROSS VARIOUS CITY DEPARTMENTS. ADDITIONALLY, EVERY YEAR WE'RE ELIGIBLE FOR A NET ASSET DISTRIBUTION THAT THE MMR MAY GIVES BACK TO ITS MEMBERS.

WE CAN INVEST THIS MONEY.

WE CAN USE IT FOR VARIOUS RISK MITIGATION PROJECTS.

WE CAN ALSO CREDIT OUR PREMIUM BACK.

BECAUSE OF OUR INCREASE THIS YEAR, I AM GOING TO INCREASE OUR CREDIT BACK ABOUT $200,000 OF THAT TO OUR PREMIUM, WHICH WILL SAVE THE CITY SOME MONEY THERE AS WELL. SO I KNOW I'VE TALKED A LOT.

I HOPE THAT YOU SEE THAT THESE STRATEGIC INSURANCE RENEWALS REFLECT STRONG FISCAL STEWARDSHIP AND PROACTIVE RISK MANAGEMENT APPROACH WITH OUR PARTNERS HERE AT MMR, MMA AND AT GALLAGHER. THIS PROTECTS THE CITY'S PHYSICAL ASSETS, PEOPLE AND OPERATIONS WHILE SECURING COST SAVINGS, BROADER COVERAGE AND VALUE BASED BENEFITS.

THERE'S ANY QUESTIONS? I'LL BE HAPPY TO ANSWER THEM.

THANK YOU. GREAT. THANKS. YEAH. INSURANCE ISN'T ALWAYS THE MOST GLAMOROUS THING TO TALK ABOUT. I KNOW, BUT IT'S CERTAINLY.

[00:25:02]

YEP. I'LL TURN TO MY. I HAVE ONE QUICK QUESTION.

I'LL TURN TO MY COLLEAGUES FIRST AND SEE IF THERE'S ANYTHING.

JUST SUPER QUICK ON THE TRIA PIECE.

SO WE'RE NO LONGER USING THAT POLICY OR THAT THAT COVERAGE.

BUT YOU SAID THAT THERE'S A KIND OF A COMPARABLE THING THAT WE ARE USING THAT PROVIDES SIMILAR COVERAGE, BUT THEN GIVES THE DETERMINATION OF WHAT CONSTITUTES COVERAGE UNDER THAT BACK TO US VERSUS THE FEDERAL GOVERNMENT.

IS THAT THAT IS CORRECT.

OKAY. RYAN, DO YOU WANT TO TALK A LITTLE BIT ABOUT TRIA? YEAH, SURE. THANK YOU. YEAH.

SO A GREAT QUESTION. TRIA WAS ENACTED RIGHT AFTER THE 2001 TERRORIST ATTACK ON THE WORLD TRADE CENTER. AND ULTIMATELY THEY SAID, WE'VE GOT TO CREATE SOME KIND OF STOP LOSS SO THAT SOMETHING LIKE THIS, IF IT WERE TO EVER HAPPEN AGAIN, WOULD BE PAID FOR. THERE'S BEEN A NUMBER OF EVENTS THAT HAVE HAPPENED SINCE THAT BOMBING THAT HAVE NOT TRIGGERED TRIA.

FOR EXAMPLE, THE MARATHON, THE BOSTON MARATHON DIDN'T TRIGGER TRIA.

SO AS AN INDUSTRY, WE LOOKED AROUND AND SAID WE NEED TO FIND A BETTER SOLUTION TO THIS PROBLEM. AND THE ANSWER WAS A STANDALONE TERRORISM POLICY DIRECTLY OUT OF LONDON.

YOU KNOW, FROM A COST PERSPECTIVE, THIS POLICY IS ACTUALLY LESS EXPENSIVE THAN WHAT YOU WERE SPENDING IN TRIA, AND IT PROVIDES LARGELY BETTER COVERAGE.

DOES THAT ANSWER THAT? YEP, ABSOLUTELY. I JUST I MEAN, TO YOUR POINT, GIVEN RECENT EVENTS THAT WE'VE SEEN SINCE 2001, LIKE THERE HAVE BEEN OTHER, OTHER FORMS OF, YOU KNOW, TERRORISM. AND SO I JUST WANTED TO MAKE SURE THAT WE ARE STILL WE HAVE SOME SORT OF COVERAGE, YOU KNOW, HEAVEN FORBID SOMETHING LIKE THAT HAPPENS, YOU KNOW, CLOSE TO HOME.

SO JUST WANTED TO MAKE SURE THAT THAT WAS WAS STILL INCLUDED. OF COURSE.

THANK YOU. ALL RIGHT. WELL, I WILL I WILL CALL THE QUESTION THEN.

ALL THOSE IN FAVOR SAY AYE. AYE, AYE.

THOSE OPPOSED IT CARRIES.

I KNOW WE'VE GOT COMING UP ON TIME HERE, SO WE'LL TRY AND MOVE THROUGH THESE AS QUICKLY AS WE CAN HERE.

[5. Series Ordinance for Water Supply System Improvement Junior Lien Revenue Bonds in an Amount Not to Exceed $18 Million]

SO MOVE SUPPORT. ALL RIGHT.

MOVED IN SUPPORT MR. BRADY WELCOME.

GOOD MORNING. SO THE ITEM BEFORE YOU IS A SERIES ORDINANCE THAT WOULD AUTHORIZE THE WATER DEPARTMENT TO ISSUE UP TO $18 MILLION IN JUNIOR LIEN REVENUE BONDS THROUGH THE STATE'S DRINKING WATER REVOLVING FUND.

SO THOSE FUNDS WOULD BE USED FOR PROJECTS SPECIFICALLY IN THE CITY OF GRAND RAPIDS, PRIMARILY FOR LEAD LINE REPLACEMENT, BUT ALSO FOR SOME WATER MAIN INFRASTRUCTURE REPLACEMENT ON THE SOUTHEAST SIDE OF THE CITY, SPECIFICALLY BURTON STREET AND BOSTON STREET.

THOSE BONDS WOULD BE SERVICED BY USING WATER RATES.

IT DOES NOT REPRESENT A GENERAL OBLIGATION FOR THE CITY.

IT WOULD BE A 20 YEAR LOAN WITH AN ANTICIPATED INTEREST RATE BETWEEN 2 AND 2.5%, AND WE DO ANTICIPATE POTENTIAL PRINCIPAL FORGIVENESS OF UP TO $4 MILLION, WHICH WOULD BRING THE TOTAL BOND DOWN TO 14 MILLION.

AND I DO WANT TO NOTE, WE DID BRING A NOTICE OF INTENT BACK TO OR BEFORE THIS COMMISSION BACK IN MAY.

AND WE HAVE NOT RECEIVED ANY COMMENTS ON THAT.

AND I ALSO WANT TO KNOW WHEN I BROUGHT THAT BACK IN MAY, COMMISSIONER KNIGHT, YOU HAD ASKED ABOUT WHAT HAPPENS IF ANY OF THESE PROJECTS GO OVER BUDGET. THEY DO HAVE A CONTINGENCY BUILT IN.

AND IF THEY DO HAPPEN TO GO OVER BUDGET.

THE WATER DEPARTMENT DOES KEEP A CASH RESERVE FOR CAPITAL PROJECTS THAT GO A LITTLE BIT OVER AND NEED A LITTLE BIT OF HELP GETTING ACROSS THAT FINISH LINE, SO WE ARE PREPARED FOR THAT.

THANK YOU. AWESOME. ANY QUESTIONS OR COMMENTS? YEAH. REALLY THANKFUL FOR THESE INVESTMENTS, ESPECIALLY AS THEY ARE IN THE THIRD WARD, AND WE KNOW THAT WE'VE HAD SOME SIGNIFICANT CHALLENGES WITH OUR INFRASTRUCTURE.

SO HAPPY ABOUT THAT AND HAPPY TO HEAR THE FOLLOW UP ON COMMISSIONER KNIGHT'S QUESTION, BECAUSE THAT WAS GOING TO BE MY QUESTION.

SO THANK YOU. YES, THANKS FOR THAT.

ALRIGHTY. HEARING NO OTHER QUESTIONS, I WILL CALL THE VOTE.

ALL THOSE IN FAVOR SAY AYE. AYE, AYE.

THOSE OPPOSED IT CARRIES ITEM NUMBER SIX.

[6. Ordinance amending Section 1 of the Budget Ordinance 2024-23 for Fiscal Year 2025 (Amendment No. 9)]

AND THAT'S FOR FISCAL YEAR 2025.

AND THIS IS AMENDMENT NUMBER NINE.

SO MOVE SUPPORT. ALL RIGHT.

MOVED IN SUPPORT. I'LL TURN TO MISS MOLLY.

AND FIRST OF ALL WANT TO WELCOME HER BACK. WE WERE IN GREAT HANDS WITH OUR ACTING CFO DURING YOUR TIME WITH FAMILY.

BUT GLAD TO HAVE YOU BACK. YEAH. OF COURSE.

WELL, AS REQUESTED TO PUT BRIEFLY.

I'LL GO QUICK. THE WATER CAREER PROGRAM IS THE FIRST ITEM WE HAVE.

THAT'S JUST AN ANNUAL JUST UNDER 300,000 WE'RE APPROPRIATING FOR THE ENGINEERING DEPARTMENT ANOTHER GRANT RELATED TO THE TRAINING FACILITY.

WE HAVE REBALANCING GOING ON IN OUR VITAL STREETS CAPITAL FUND.

AND THEN NUMBER FOUR IS JUST APPROPRIATING THE PROCEEDS FROM THE RECENT ISSUANCE OF THE SOCCER STADIUM AND THE GAP FUNDING FOR THE AMPHITHEATER.

SO OUR CONTINGENT BALANCE IS AT ZERO.

SO THAT IS BRIEFLY WHAT'S GOING ON WITH OUR AMENDMENTS TODAY.

[00:30:04]

ANY QUESTIONS? ALL RIGHT.

ALL THOSE IN FAVOR SAY AYE.

AYE AYE. THOSE OPPOSED IT CARRIES.

THAT'LL BRING US TO ITEM NUMBER SEVEN. WE'VE GOT OUR BID LIST RESOLUTION FOR JUNE 10TH,

[7. Bid List Resolution for June 10, 2025]

MOVED IN SUPPORT BACK TO MISS CLAIRE HERE.

AGAIN, JUST A LOT OF ROUTINE.

ROUTINE ITEMS. IF THERE ARE ANY QUESTIONS MYSELF OR THE PURCHASING AGENT OR THE DEPARTMENTS ARE HERE. YEP.

AND I KNOW THERE'S A FULL LIST IN THE AGENDA PACKET TWO AS WELL, IN CASE PEOPLE WANT TO READ THROUGH SOME OF THE SPECIFICS OF THOSE. SO COLLEAGUES QUESTIONS, DISCUSSION.

ALL RIGHT. ALL THOSE IN FAVOR SAY AYE.

AYE, AYE. THOSE OPPOSED.

THAT CARRIES. AND THEN THESE LAST THREE ITEMS HERE. JUST A REMINDER. WE DON'T NEED A MOTION. THESE ARE JUST REPORTS THAT WILL THEN RECEIVE IN FILE.

AND THEN SEND ON TO OUR COMMISSION MEETING THIS AFTERNOON. NUMBER EIGHT,

[8. Comptroller's Warrant Report for the period of May 6, 2025 through May 19, 2025 in the amount of $23,277,746.60 and Monthly Travel]

SO I'LL TURN IT OVER TO OUR CITY COMPTROLLER, MR. MAX FRANTZ. GOOD MORNING, COMMISSIONERS.

MORNING. FOR THE PERIOD, REFERENCED CASH PAYMENTS WERE RELEASED TOTALING $23.27 MILLION.

THIS AMOUNT INCLUDES APPROXIMATELY $5.5 MILLION FOR EMPLOYEE PAYROLL RELATED PAYMENTS, AND $1.37 MILLION FOR INCOME TAX WARRANTS.

IN TERMS OF QUANTITY, 5658 INCOME TAX REFUNDS WERE ISSUED AND 387 CHECKS AND ELECTRONIC PAYMENTS WERE ISSUED.

THE FUNDS DETAILED ABOVE.

WERE NOT ISSUED BY INDIVIDUALS.

IN THE CITY COMPTROLLER'S OFFICE AND NOT ISSUED IN ACCORDANCE WITH THE TERMS OF THE CITY CHARTER. THE SECOND REPORT THAT I HAVE HERE THIS MORNING IS OUR APRIL FISCAL YEAR TO DATE TRAVEL SUMMARY REPORT.

AND THIS REPORT IS SHOWING THAT SO FAR THROUGH THE PREVIOUS FISCAL YEAR, JUST OVER $1.5 MILLION OF $3.4 MILLION BUDGETED WAS SPENT, OR APPROXIMATELY 44%. AND THAT'S THAT'S THE TWO REPORTS I HAVE HERE TODAY.

ALL RIGHT. THANK YOU. WE WILL RECEIVE AND FILE THOSE. WHICH BRINGS US TO OUR

[9. Treasurer’s Report for Period of May 8, 2025, through May 27, 2025]

GOOD MORNING, COMMISSIONERS. WITH A REPORT TODAY. JUST TO BRIEFLY HIGHLIGHT, I STILL HAVE CONCERNS ABOUT THE GROWING BUDGET DEFICITS.

WE'RE TALKING ABOUT THE MOODY'S DOWNGRADE AND ITEMS LIKE THAT AT THE FEDERAL LEVEL.

I DO SEE THAT THE INTEREST RATES ARE GOING TO STILL REMAIN UNCHANGED.

RIGHT NOW. THERE'S NO MOVEMENT WITH THE FED, YET WITH DIFFERENT DIRECTIONS THAT THE GOVERNMENT IS TAKING AND WHERE THE ECONOMY IS HEADED.

THE BIGGEST CHANGE YOU'RE GOING TO SEE ON THIS REPORT IS IF YOU LOOK AT THE PORTFOLIO SEGMENT WHERE WE'VE PULLED IN ALL OF THE MONIES FOR THE PARKING RAMP, THE AMPHITHEATER, THE SOCCER STADIUM, BOND ISSUES THAT WE HAVE.

AND SO THOSE WERE ADDED TO OUR PORTFOLIO, WHICH STANDS AT $776 MILLION.

AND WE'RE EARNING 3.45% ON THOSE.

ALL RIGHT THANKS. WE'LL RECEIVE AND FILE THAT AND THEN SIMILAR VEIN NUMBER TEN OUR LAST

[10. Report of Bond Sale – $122,270,000 Series 2025 Capital Improvement Bonds for Soccer Stadium & Amphitheater]

IT'S $122 MILLION 270 SORRY $122,270,000 SERIES 2025 CAPITAL IMPROVEMENT BONDS.

AND THOSE ARE FOR THE SOCCER STADIUM AND OUR AMPHITHEATER PROJECTS.

LET'S SEE. YEAH, USUALLY USUALLY TRICIA WOULD BE UP HERE, BUT I BELIEVE SHE'S IN ERP MEETINGS AND WORRIES AS WE'RE STILL STILL GETTING THE ROLLOUT GOING. BUT YES, I WASN'T HERE.

MY DEPUTY THE CFO MANAGED THE SALE OF THE BONDS WITH 122 MILLION, WHICH WAS A HUGE LIFT FOR THE CITY.

BUT THEY THEY PERFORMED REALLY WELL.

WE HAD HUNTINGTON SECURITIES AS OUR UNDERWRITER.

PNC CAPITAL MARKETS IN FIFTH THIRD CAME IN AS CO MANAGERS.

WE PERFORMED REALLY WELL WITH OUR RATING AGENCIES, MANAGED TO MAINTAIN OUR AA RATING.

I BELIEVE WE TALKED ABOUT THIS BEFORE, BUT THE THESE BONDS ARE BACKED BY THE HOTEL MOTEL TAX FROM THE COUNTY.

WE HAVE AN AGREEMENT WITH THE COUNTY AND ALSO PUT IN PLACE SAFEGUARDS THAT I BELIEVE MISS BARRON'S, OUR DEPUTY CITY MANAGER, HAS EXPLAINED WHERE WE HAVE A KIND OF A RAINY DAY FUND TO ENSURE, YOU KNOW, WE'LL HAVE A LITTLE INSULATION.

SHOULD WE HIT HARD ECONOMIC TIMES.

AND THAT REVENUE STREAM IS HIT BEFORE THE CITIES IMPACTED.

AND ONE THING JUST JUST TO REFLECT, WE INCLUDE THE REPORTS OF SALE BEHIND THIS.

IF YOU LOOK AT THE TRUE INTEREST COSTS, IT'S COSTS JUST BELOW 4.7%, WITH AN AVERAGE COUPON OF 5%.

TY WAS JUST UP HERE TALKING ABOUT OUR JUNIOR LEAN BONDS.

WE GET THROUGH THE STATE REVOLVING FUND, AND IT'S, YOU KNOW, WE DO LEVERAGE THAT JUNIOR LEAN A LOT BECAUSE AS HE WAS SAYING, IT WAS 2 TO 2.5%. SO IT IS SUCH A GOOD DEAL TO PARTNER AND GO OUT THERE FOR BONDS AS WELL. WHEREAS WHEN WE GO ALONE ON OUR GEO CREDIT, WHICH IS STILL REALLY GOOD FOR WHAT WE WERE ISSUING ON THE SIZE.

[00:35:03]

SO AWESOME. THANKS FOR THAT.

AND I KNOW WE'VE GOT A COUPLE OF MINUTES HERE. SO I GUESS FOR THOSE LISTENING IN, I KNOW THE MOST IMPORTANT PIECE I WANT TO REITERATE IS THE FACT THAT THESE BONDS ARE BACKED BY THE REVENUE FROM THE HOTEL MOTEL EXCISE FEE.

SO COULD YOU JUST MAYBE HIGHLIGHT SORT OF HOW THAT WORKS, HOW IT'S CAPTURED, HOW WE THEN APPLY THAT TO THE PAYMENT OF THESE BONDS AND SO ON? SURE, SURE. THERE, THERE THERE'S STILL LIMITED TAX GENERAL OBLIGATIONS.

SO THEY ARE AGAINST OUR FULL FAITH AND CREDIT.

SO WE ARE ULTIMATELY RESPONSIBLE.

THE COUNTY INCREASED THEIR HOTEL MOTEL TAX FROM 5% TO 8%.

THAT DELTA THAT 3% HAS BEEN DESIGNATED AS THESE BONDS ARE FIRST OBLIGATION ON THAT THEY HAVE TO BE PAID. YOU KNOW OUT OF THAT.

SO WE WE SET UP A PARTNERSHIP WITH THE COUNTY WHERE THE REVENUE WE WE BASICALLY INVOICED THEM ACTUALLY QUITE EARLY BEFORE THE PAYMENTS DUE.

I BELIEVE WE'RE WE EXPECT TO RECEIVE THE, THE MONEY IS LIKE FIVE MONTHS BEFORE JUST TO MAKE SURE THE MONEY IS THERE AND WE CAN PAY IT.

BUT THEY ALSO IN THAT TIME FRAME, THEY ALSO ARE FUNDING THAT DEBT RESERVE.

OOPS. THAT DEBT RESERVE.

I'M OUT OF PRACTICE. I FORGET ABOUT THE MICROPHONE.

THAT DEBT RESERVE WE HAVE.

SO SO THEY FUNDED THAT WITH.

WELL, WE. YEAH, THEY FUNDED THAT WITH THEIR HOTEL MOTEL TAX, AND THEN WE INVOICED THEM FOR THE PAYMENT.

SO WE ALWAYS HAVE THAT POT OF MONEY SITTING THERE.

AS WE DO THE PAYMENTS, WE MAKE SURE WE STILL HAVE THAT REVENUE COMING FROM THE COUNTY.

SO IT'S IT IS YOU KNOW, LIKE I LIKE I SAID, WE DID PUT A LOT OF SAFEGUARDS IN FOR THE CITY.

AND, AND, YOU KNOW, WE DO HAVE AN ORDER OF PRIORITY ON THAT 3% WHERE THIS IS THE YOU KNOW, I KNOW THEY PLAN TO DO AS THAT 3%.

THE PROCEEDS OF WHAT THEY GET ANNUALLY WILL GROW OVER TIME, AND THEY WANT TO DO OTHER LARGE CAPITAL PROJECTS WITH IT.

YOU KNOW, OURS BONDS WILL BE THE FIRST ONES TO GET PAID BEFORE THE SUBSEQUENT OBLIGATIONS ON THAT. SO YES. PERFECT.

YEAH. THANKS FOR ELABORATE. I KNOW WHEN IT WHEN WE WERE TALKING ABOUT, YOU KNOW, AUTHORIZING THE ISSUANCE OF THESE BONDS FOR THESE PROJECTS, SOME PEOPLE, I THINK, HAD THE MISUNDERSTANDING THAT THIS WAS COMING OUT OF, YOU KNOW, TAXPAYER MONEY, GENERAL FUND, THINGS LIKE THAT. SO JUST ALWAYS WANT TO BE CLEAR THAT THAT IS VERY MUCH NOT THE CASE. SO APPRECIATE THE INFORMATION.

SO ALL RIGHTY. THAT WRAPS UP OUR BUSINESS HERE TODAY.

WE'LL GO AHEAD AND ADJOURN THIS MEETING. IT IS 907.

WE'LL SEE SOME OF YOU GUYS BACK IN HERE AT 915 FOR COMMUNITY DEVELOPMENT.

* This transcript was compiled from uncorrected Closed Captioning.