11/17/1986 Meeting - Laserfiche WebLink

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documents will be issued, and a bid award will be made. He said the City will do the preliminary work to secure the long-term fi nanci ng, an e economic analysis will be done, project administration costs will be paid, and some site work will be done in spring 1987. He said that after completion of the audit on the last fiscal year, $194,922 was identified as money that is available and not currently obligated to any service or capital project. He said this money is net of funding the FY87 Capital Budget. He discussed the options that staff i dent ifi ed in order of increasing impact on existing operating and capital service levels that are funded by the General Fund. Mr. Wong discussed the proposed deferral of FY86 and FY87 capital projects in the Parks Department and Public Works Department. He said staff is confident that the projects listed can be deferred without creation of an emergency situation. He described the options available to make debt service payments if the City issues some type of long-term debt. He said that staff recommends the issuance of a Revenue-Backed General Obligation Bond for long-term financing. He said it will require a vote and it would authorize the City Council and the Budget Committee to levy a property tax if necessary. He said it is the lowest-cost financing of all the long- term debt instruments that are available. He described possible funding sources to be used for debt service repayment. Mr. Wong said that at a previous meeting, Mr. Hansen had asked if the City could get a revenue bond measure approved and also place a restriction on the levying of the tax. Mr. Wong said that after discusstng the question with bond counsels, it appears that restricting the levying of the tax is not possible. He said that the voters cannot be asked to approve a e revenue-backed general obligation measure which allows the City to levy property taxes and at the same time state that the City will never levy property taxes--it could appear to be a sham. Proposed debt service repayment schedules were discussed. Mr. Wong said that there would be a positive surplus for the first several years which would be placed in a reserve. He said the reserve would be used to make debt service payments. He stressed the importance of not defaulting on the debt. He discussed the adopted subcommittee recommendation of a long- term debt issuance of $5.221 mi 11 i on and what the debt servi ce and deficits would be. He said that if the entire debt service was levied as a property tax--under the $4 million issue--it would add $0.15/$1,000 to the levy, and--under the $5.2 million issue--it would add $0.20/$1,000 to the levy. He then described current tax rates and said that the debt service rate, given the outstanding General Obligation Bonds, will be going down from $1.22/$1,000 to zero over the next several years since additional general obligation debt has not been issued. He said that the staff recommendation is a consolidation of an external financing instrument using existing internal resources and new resources to pay the debt service. Mr. Miller noted that the 6.32 percent and 8.0 percent finance rates almost cost the same. Mr. Wong said that bank issuance loan costs are e MINUTES--Eugene City Council Dinner Session November 17, 1986 Page 2