2026-10-21 - City Council Special Meeting

00:30I'd like to call to order uh the Des

00:32Moines City Council meeting for

00:33Wednesday, October 21st, 2026.

00:38And the first thing would be the roll

00:39call.

00:40>> Bowden.

00:41>> Here.

00:41>> Simonson.

00:43Voss.

00:45>> Here.

00:47>> Westergaard.

00:48>> Here.

00:49>> Mandelbaum.

00:50>> Here.

00:51>> Gatto.

00:52>> Here.

00:53>> We have a quorum.

00:56>> The next item is approving the agenda as

00:58presented and or as amended.

01:02>> Move to approve.

01:04>> Second.

01:05>> It's been moved and seconded. Uh all in

01:07favor?

01:08I.

01:08>> I.

01:09>> I.

01:09>> Any opposed?

01:10>> I.

01:11>> Motion carries.

01:13Uh the next item is directing sale of

01:15general obligation bonds series 2026A.

01:20And I will turn it over to the city

01:22manager to introduce.

01:25>> Thank you, Mayor. Uh Council members,

01:27uh this is a fairly typical annual

01:31issuance of our debt

01:34that we take on for our new CIP projects

01:37that need funding.

01:39This is in direct correlation to the

01:41projects that have been approved in our

01:44CIP

01:45and are broken down by different

01:47categories for which we've already had

01:49all the hearings and the necessary

01:51documents submitted uh including the uh

01:55preliminary statement that uh, all

01:57received from Nick to review with all

01:59the great financial information that's

02:02in that, uh, that compares the city's,

02:05uh, history and, uh, some other great

02:07data in there. I would tell you to keep

02:09that document and on reference for, uh,

02:12when you want to brag about some of the

02:13financial situation the city. There's a

02:15lot of good information in there.

02:17Uh, which is obviously reviewed by PFM.

02:19Uh, this always takes a, uh, a team, uh,

02:23to accomplish and especially get great

02:25results that you're going to hear and I

02:26won't steal any of that thunder. But, I

02:29want to thank, uh, PFM for their work as

02:31a financial advisor and Allers, uh,

02:34firm, uh, with the,

02:36uh, tax-exempt status and some of the

02:38other advice that they make sure we're

02:40doing everything properly in that

02:42regard. Then obviously the finance

02:44staff, uh, for putting the, uh, raw data

02:46together. So, I'll thank them and turn

02:48it over to actually give you what the

02:50results were from today and what the

02:52next steps are.

02:57>> Uh, thank you, uh, honorable mayor and

02:59council members. Uh, Nick Shaw, finance

03:01director here at the city.

03:03Um, we actually have, I'm going to kind

03:06of talk about both, uh, three and four

03:08together. Uh, both issuances, uh, we had

03:11our bids come in at 10:00 a.m. this

03:13morning kind of having a lot of, uh, uh,

03:17having

03:18it on a Wednesday again was very

03:20helpful. Uh, I want to thank, uh, you

03:23all for, uh, accommodating us on doing

03:25another Wednesday sale.

03:28Uh, we were, uh, probably one of the

03:30bigger, uh, GO debt related items that

03:33were for sale, uh, today, which I think,

03:36uh, bode well for what we actually got

03:38for bids coming in.

03:40Um, what we ended up doing, uh, we had

03:43two different sale sales, the 26A,

03:46which is the tax-exempt, uh, sale, which

03:49we were anticipating, uh, issuing about,

03:53uh,

03:5456.9

03:55million for that and then the B which

03:58was about a little over 6 million and

04:00the taxable aspect of it is for those

04:03items that isn't like for the full

04:05public and there's some revenue

04:07generation or private

04:10benefit in that in that in that portion.

04:12So

04:13with that in mind um

04:16we ended up getting a number of bidders

04:20on these. We've got 13 bids within the

04:232026A

04:25and four bids on the B.

04:28Um and so we got really good responses.

04:32Um the details of those responses I'm

04:33actually going to let our PFM

04:35uh representative speak to those

04:38numbers.

04:39Uh they have definitely helped us

04:41through this process. Same with Allers.

04:43It's it's it's really great to have

04:45those

04:46those individuals help us through the

04:48bond council work. Um and also like

04:52Scott had said my my research budget

04:54staff definitely working with the

04:56department and making sure we have the

04:57numbers that we need to be able to issue

04:59for that CIP. So it is definitely

05:01interesting the bidding process because

05:03it's usually last minute last second

05:05people are trying to

05:07tweak their bids to get the best bid

05:10across to get

05:12sharpening their pencils to make sure

05:13they can make what they need but also

05:15getting us the best deal. So with that

05:18I'm actually going to hand it off to

05:19Suzanne

05:20from PFM.

05:24>> Good evening. I am Suzanne Gerlach with

05:26PFM Financial Advisors. I am now the

05:28Managing Director a partner in charge of

05:30the Demoin practice. My colleague John

05:33Burmeister has retired as of July and

05:35he's off doing wonderful things and has

05:38left the Demoin office in my hands and

05:40so I am very pleased to be the project

05:43manager from PFM for the city of Demoin

05:45and to have completed our first sale

05:47together. Um we as as Nick mentioned, we

05:50received 13 bids today from over 49

05:54different banks. Um and I will say there

05:56was a nice mix of both the national

05:59heavy hitters, the New York firms, as

06:01well as regional firms.

06:03Um and so there was a nice mix there.

06:05When we look at how we award the bonds,

06:09PFM recommends we use the true interest

06:11cost method. That is every annual amount

06:14in the bonds receives its own coupon,

06:16yield, and price. And then the TIC

06:19aggregates all of the yields received,

06:22as well as underwriter's discount taken

06:23by each

06:25underwriter. Um and provides a TIC

06:29that is what we use to make a

06:30recommendation for the winning bid. Um

06:32the TIC range today was 4.45%

06:36to 4.53%,

06:38which is extremely close together for 13

06:42different bids. Only 13 basis points

06:44separated bid number one and bid number

06:4613. And of And of even more interest,

06:49the first 12 bids were only four four

06:51basis points apart. So very very tight

06:54competition. And as we were watching the

06:56bids come in today, there were I don't I

06:58mean for 15 minutes there were

06:59resubmissions of bid, people trying to

07:00rebid to trying to win.

07:02The parity

07:04Internet bid platform we use is a blind

07:06reverse auction website. What that means

07:08is the underwriters can see if they're

07:10winning or not, but not by how much. So

07:12they know they're not winning or they're

07:13winning, and then they try to resubmit.

07:15They get on the phone, try to get more

07:16orders to give the city of Des Moines a

07:18better deal today and try to win the

07:20day.

07:21Uh the winner today was JP Morgan out of

07:23New York, New York with a four-member

07:25syndicate including Academy Securities,

07:27Rice Financial, and Stern Brothers and

07:29Company.

07:30Um they were at 4.4580%.

07:35The cover bid was a very disappointed

07:37Oppenheimer out of New York, New York.

07:39Uh they were less than one basis point

07:41above the winning bid. So, I'm sure they

07:42were very disappointed today.

07:45Um pricing we compare the yields

07:48received today to the AAA BVAL scale.

07:51Uh the city of Des Moines is rated AA+

07:53by Standard & Poor's and that is only

07:55one notch below the highest possible

07:57rating of AAA. And so, the the BVAL uh

08:00scale today the the bonds priced uh

08:02through MMD or through the BVAL scale in

08:05years one and two uh ranging from minus

08:07five basis points through the scale to

08:0944 basis points over the scale and on

08:12aggregate priced 20 basis points over

08:14the AAA scale. So, tremendous excellent

08:16pricing today. PFM was very pleased with

08:18the pricing received on the bonds today.

08:21Um and as we've all read in the uh

08:23headlines uh interest rates are up uh

08:25compared to where they were last year.

08:27The scale itself has moved on average 88

08:30basis points almost a whole percent from

08:31where we were a year ago today. So, the

08:33pricing mattered really even more today

08:36when we were in a higher interest rate

08:37environment. And so, all of the good

08:39work that your staff does day in and day

08:41out really made a difference in the sale

08:42today. So, we're very pleased.

08:45Um and with that I'm happy to answer any

08:46questions anybody might have for the A

08:47series.

08:50>> Does anyone have any questions? I mean,

08:51it's amazing how close they were.

08:57>> So, we've never had AAA.

08:59>> We did

08:59>> It's always been one notch below.

09:01>> Okay.

09:02>> On both scales in the past.

09:04>> Mhm.

09:05>> Always tried to think it to the AAA but

09:08have not quite.

09:09>> Okay.

09:11>> Were you surprised by the quantity of

09:13bidders?

09:14>> I will say this is more than average. Um

09:16the city of Des Moines um

09:18usually draws uh just for name

09:20recognition, your strong credit, you do

09:22draw a larger number of bidders than

09:24some of our other smaller Iowa issuers.

09:26But even for the sales that we've had in

09:28the past couple months, this is more

09:29than average. I would say five to eight

09:30is average. Our goal is three. Five to

09:33eight is average and you had 13 bids

09:34today.

09:36Tremendous.

09:37>> People are It speaks to Monday, I guess.

09:39>> Yeah.

09:40>> Okay.

09:41Uh so, we'll probably take if there's

09:43other questions.

09:46Anybody on the phone have a question?

09:49>> Move approval, Mr. Chairman.

09:51>> Second.

09:53>> Do you have any other comments?

09:56>> No, I mean

09:58well, I guess the the one thing

10:02Yeah, we're we're still This is still a

10:04benefit and and we're seeing

10:07the bids we got not not only did we get

10:10a lot of bids, but the amount was lower

10:12than what what you're seeing elsewhere

10:13right now.

10:15>> Yes, pricing was excellent for your

10:16double A plus credit class.

10:18>> Yeah.

10:18>> Yes. Okay.

10:20>> So, it's been moved and seconded.

10:21All in favor?

10:23>> I.

10:23>> I.

10:25>> I.

10:27>> Got to vote yes.

10:28>> Six yes, motion

10:30>> Boss votes yes.

10:33>> Motion carries. The next item is

10:35directing the sale of taxable general

10:38obligation bonds series 2026B.

10:41>> So, the taxable there is a smaller pool

10:44of investors that buy taxable bonds, so

10:46not surprising that we saw fewer

10:48bidders.

10:49Um we saw four bidders on the taxable

10:51series, but that still included 37

10:53different banks. Um and again, it was

10:55actually the two regional firms that

10:57came in first and second.

10:59Um the TIC ranges for the taxable series

11:025.07

11:03to 5.18, so a little bit wider spread um

11:06between all four bids, 11 basis points

11:08in total. Um the winning bid today was

11:11received by Northland Securities out of

11:13Minneapolis, Minnesota.

11:15Um and uh the cover bid was uh

11:17again by a very disappointed, I'm sure,

11:19Piper Sandler um out of Minneapolis. Uh

11:22that was just uh one basis point over

11:25the Northland bid. So, again, very tight

11:27competition. The closer the TICs are

11:29together, that just shows how every

11:31basis point matters in their bids and

11:33how how the strong competition does help

11:36reduce the rates overall.

11:38Um and the first the first three bids

11:40were all within three basis points of

11:41each other for the taxable series.

11:44Um and pricing I feel like was

11:45extraordinary on these bonds. The

11:47five-year Treasury right now is at a

11:484.95

11:50and the city priced at 5.07 today, which

11:53is only 12 basis points over US

11:55Treasuries, which is phenomenal. Very

11:56pleased with the pricing.

11:59Happy to answer any questions.

12:00>> Scott has a smile. That's a good thing.

12:03>> Well, yeah, when you compare the credit

12:05of the city of Des Moines to the US

12:08Treasuries, only 12 basis points

12:10difference at the same maturity.

12:13Remarkable.

12:14>> Sad.

12:15>> Why did we only What is the difference

12:17of number of bids between the two A and

12:20B?

12:21>> Uh so tax-exempt investors are a

12:23different pool of than taxable, right?

12:26So you're you're competing against

12:27Treasuries, you're competing against

12:29corporates in the taxable world, and so

12:30there's just a fewer number

12:32of bidders that are looking for that.

12:35>> Okay.

12:36Okay.

12:40>> I'd move item four.

12:43>> It's been moved and seconded. All in

12:45favor?

12:46>> I.

12:48>> People on the

12:51>> Six yes, motion carries.

12:53Congratulations on very successful sales

12:55today.

12:56>> Well, thank you for the work and thank

12:57Nick, his staff, our legal, everybody

13:00involved to be able to get these kind of

13:01rates, and to Scott for managing us

13:05to keep us in such a strong financial

13:08state.

13:10So thank you.

13:12Okay, the next item is approving an

13:14eight-month class C liquor license for

13:16Broken Spoke Bar and Grill at 3925 East

13:1914th Street.

13:24Anyone like to

13:26discuss that or

13:27>> Move approval, Your Honor.

13:28>> Second.

13:29>> It's been moved and seconded. All in

13:31favor?

13:32>> I.

13:32>> I.

13:34>> Boss votes yes. Lucy votes yes.

13:36>> Six yes, motion carries.

13:38>> Okay, and then

13:40Okay, the next item is a motion to

13:42adjourn. Motion to adjourn.

13:43>> Move.

13:45>> Second.

13:46>> All in favor?

13:47>> I.

13:47>> I.

13:48>> This meeting is adjourned.

13:49>> I.

13:50>> Thank you.