Council presses for best-and-final bank offers after RFP errors; prepayment penalty emerges as key concern

Council received an update on loan RFP responses for planned town financing and directed staff to seek final, corrected offers before making a selection.

Town Manager Parsons summarized that the town issued an RFP per Local Government Commission (LGC) guidance; staff received two substantive replies and one non-committal response. Parsons said both substantive proposals contained omissions or calculation errors that staff and outside counsel reviewed. He said legal and fee differences can affect the overall cost and that LGC staff reviewed the process and had not flagged problems.

Council members expressed concern about the fairness and optics of accepting post-deadline revisions but agreed it is not uncommon for proposal clarifications to follow an RFP. Several members emphasized three priorities: the lowest long-term cost, a 20-year amortization because the building will likely be a long-lived asset, and avoidance of any prepayment penalty that could hamper future principal reduction.

"No prepayment penalty is of highest interest," one council member said during the discussion. Staff offered to ask the apparent low bidder to submit a best-and-final offer holding a rate for 60 days; the manager said staff was "more than willing to do that". Parsons also noted that any award made by council would still be contingent on final LGC approval.

Council directed staff to return to the work session with corrected amortization schedules and a recommendation after best-and-final offers are solicited; staff will send the updated materials to the LGC in time for its October agenda.