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Councihnember Elvig expressed concern with the appearance of the City's consultant also acting <br />as thc underwriter, and whetherithis draWs s.crUtiny from a legal and financial standpoint. He <br />explained this is no reflection on. the serVice, as Northland Securities has done a fabulous job. <br /> <br />Mr. Donna stated there have been a number of steps in recent years taken to bring this issue more <br />to thc forefi'ont. Hie explained the rate on a national basis of financial advisors serving as <br />underwriters has increased from a 60/40 sPlitto an 80/20 split. This is due to the greater <br />efficiencies of serving in both capacities. He nO.ted there is a perception issue in some cases of <br />managing both of those roles. One step in the St~ate of Minnesota is that in any financing a city <br />does in which a financial advisor is serving as the underwriter, a third party independent pricing <br />opinion is required. The other reason he believes the pendulum has switched from 60 to 80 <br />percent is because the market has become that much more efficient. The knowledge of interest <br />rates are available to anyone, and if they hav© not done a good job on the interest rate his <br />competitor would be banging on the door. He Stated Northland Securities has local, regional, and <br />national presence, and they have the mechanisms in place to ensure the distribution. <br /> <br />Councilmember Elvig explained his question is ~o know the mechanism to be sure the <br />consultant/underwriting duties are done on a legal basis. <br /> <br />Mr. Donna replied this situation is completely legal. Minnesota statute requires an independent <br />third party pricing opinion. <br /> <br />Mayor Gamcc requested information be Provided to show the difference between a long-term <br />bond and a variable bond the next time this is digcussed. <br /> <br />COMMITTEE INPUT <br /> <br />NoI1c. <br /> <br />ADJOURNMENT <br /> <br />Motion by Chairperson Strommen, seconded by Councilmember Elvig, to adjourn the meeting. <br />Motion carried. <br /> <br />The regular mceting of the Finance Committee adjourned at 6:55 p.m. <br /> <br />Rcspcct fully submitted, <br /> <br />Recording Secretary <br />Time,%k~ vet ()f/'Site 5kcretarial, Inc. <br /> <br />Diana Lund <br />Finance Officer <br /> <br />Finance Committee/February 8, 2005 <br /> page 3 of 3 <br /> <br /> <br />