Item 2D-Res.for Long-Term Finan - Laserfiche WebLink

Home Browse Search

EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Resolution 4807 Authorizing Interim and Long Term Financing for Local Improvement Projects and Terminating the Authority Under Resolution No. 4602 Meeting Date: September 13, 2004 Agenda Item Number: 2D Department: Central Services Staff Contact: Sue Cutsogeorge www. cl. eugene, or. us Contact Telephone Number: 682-5589 ISSUE STATEMENT The council is asked to approve the issuance of interim and long-term debt to finance local improvement projects. BACKGROUND The City requires interim construction financing for assessment projects. These projects could include street paving, sidewalks, storm sewers, sanitary sewers, and alleys. Upon completion of the projects, the property owners are assessed and long-term bonds may be sold to repay the credit facility. On April 11, 1994, the council approved Resolution 4406 authorizing the issuance of a line of credit in a maximum amount of $4 million to finance the costs of local improvement projects on an interim basis until long-term debt was issued. On September 13, 1999, the council repealed Resolution 4406 and replaced it with Resolution 4602. The new resolution made some technical changes to allow for extensions of the credit facility, and to conform to Measure 5 and Measure 50 language. There are three reasons why staff is requesting revised authority for assessment program financing at this time. First, the state legislature has changed the statutes regarding interim financings since Resolution 4602 was approved. The revised statutes allow the loan to be outstanding for a maximum of five years instead of a maximum of one year. The proposed resolution makes a change to conform to the revised statutory language. Second, the current resolution only allows use of the facility for in-City projects. This restriction was put in place during the period of time when the City was constructing large sewer projects in the River Road and Santa Clara areas and did not want to secure the borrowings with its full faith and credit. Under revised assessment policies, projects are now a mix of in-City and unincorporated properties, with the in-City projects making up the bulk of the assessments. It is more efficient for the City to use one borrowing method for assessments that include both in-City and unincorporated properties. Therefore, the proposed resolution language removes the in-City restriction on use of the credit facility. Third, the revised resolution allows the City to automatically issue long-term bonds when properties are assessed. The long-term bond proceeds are used to repay the outstanding interim borrowing. The term of the long-term bonds matches the term of the property owner payments on their assessment contracts. For the smaller assessment projects, the City will enter into a bank loan to finance the long-term L:\CMO\2004 Council Agendas\M040913\S0409132D.doc