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<br /> obligation bond debt, even though it is not required by state or city charter. <br /> Because Bond Counsel would not give their approval, there may be a problem in <br />e selling the bonds, unless court action were taken. Mr. Gleason recommended <br /> bond issues be used for specific capital needs rather than a "shopping list" <br /> of needs. <br /> Pursuing Mr. Holmer's suggestion, Mr. Hansen questioned what amount of bonds <br /> the City could sell at this time to have funds available for capital projects <br /> as they arise. These could earn interest in the interval and generate funds <br /> for the City. Mr. Gleason said that the City could be liable for arbitrage <br /> (IRS penalty) unless there was an actual project in process when bonds were <br /> sold. <br /> Mr. Gleason explained that he felt strongly about the concept that capital <br /> obligation involve a stream of projects supported by the amount of capital <br /> owned (public assets supported by fees). The result of non-support is worn-out <br /> facilities with no option for repair or replacement. While general obligation <br /> bonds are a way to provide this income stream, they would involve higher <br /> property taxes which the council has been reluctant to raise. However, there <br /> is a heavy commitment of capital assets with no replacement prospects. A <br /> higher operating budget will result from a poor capital system. The swimming <br /> pools are a good example of the problem. He would like support from the <br /> council to deal with this problem, and to start informing the publiC of the <br /> serious capital needs. <br /> Mr. Holmer returned to Mr. Hansen's question on the fire department expend- <br /> itures, and questioned whether the Ci~ was getting "overcapitalized." <br /> Mr. Gleason said that it was his opinion that if the City invested signifi- <br />e cantly on the capital side of the Fire Department and operated it at maximum <br /> efficiency, firefighting costs over the next ten years could be reduced from <br /> 15 to 20 percent. There could be a net benefit to the community from this <br /> type of capital expenditure in other departments over a number of years. The <br /> Library is an example of a more efficient operation as the result of capital <br /> expenditures. Mr. Holmer suggested that this message be conveyed to the <br /> public. He suggested a cost/benefit analysis be presented to the public to <br /> get their support. <br /> Mr. Hansen leaned toward conSidering the public works needs, which do not <br /> involve new facilities, but rather repair expenses, as a funding priority <br /> over the next several years. However, in doing this he suggested that when <br /> capital assets are acquired in the future that a commitment be made to the <br /> citizens to support operating costs at the same time. <br /> Ms. Schue said that a major decision has to be made on what projects to <br /> support. The City of Eugene has grown significantly in the last ten years, <br /> and there is a need to catch up on this growth and resultant capital needs. <br /> As the discussion turned to revenue sources, the gas tax issue came up. Some <br /> councilors felt that this might be a workable method for Eugene, but there was <br /> some question about support from Springfield and Lane County. Mr. Ball <br /> suggested that a unified front be presented to the public should this idea be <br /> pursued. There was a general feeling that the voters would accept a gas tax <br />e <br /> MINUTES--Eugene City Council July la, 1984 Page 3 <br />