Item 3E: Resolution Authorizing Financing for Local Improvement

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4937 Authorizing Interim and Long Term Financing for Local Improvement Projects and Terminating the Authority under Resolution No. 4807 Meeting Date: April 14, 2008 Agenda Item Number: 3E Department: Central Services Staff Contact: Sue Cutsogeorge www.eugene-or.gov Contact Telephone Number: 682-5589 ISSUE STATEMENT The council is asked to approve a change in the amount authorized for the issuance of interim debt to finance local improvement projects. BACKGROUND On April 11, 1994, the council approved Resolution No. 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 On September 13, 1999, the council repealed Resolution No. 4406 and replaced it with Resolution No. 4602.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. On September 13, 2004, the council repealed Resolution No. 4602 and replaced it with Resolution No. 4807. The new resolution made three changes: (1) it extended the maximum length of interim financing, per revised statutory authorization; (2) it standardized the borrowing method for both in-city and unincorporated property assessment borrowings; and (3) it allowed the City to automatically issue long-term bonds to repay any interim borrowing when properties are assessed. Assessment Project Financing Under Eugene Code, property owners are required to pay for some or all of the cost of certain kinds of improvements abutting their property. These projects could include street paving, sidewalks, storm sewers, sanitary sewers, and alleys. Upon completion of the projects, the property owners are assessed and they may elect to pay the assessment up front, or finance the assessment over a 10-year period. The City requires an interim financing mechanism to pay for project costs until the properties are assessed. The interim financing is paid off from the up-front payments from property owners and through the issuance of long-term bonds. Long-term bonds are issued for those assessments that property owners have elected to pay over a 10-year period. The City pledges repayments from property owners and foreclosures on assessed properties to repay- ment of assessment borrowings. In addition, the City pledges its full faith and credit to repayment of the borrowings, in the event that those other sources are insufficient to repay the debt. F:\CMO\2008 Council Agendas\M080414\S0804143E.doc