07/24/1989 Meeting (2) - Laserfiche WebLink

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VI. ORDINANCE CONCERNING THE CONFERENCE CENTER REFINANCING e City Manager Mike Gleason introduced the topic. Warren Wong, Finance Director, gave the staff report. Mr. Wong said the 1989 Advance Refunding is designed to generate debt service savings on outstanding debt and to allow the City more flexibility in retiring the outstanding debt in the event the Hilton Hotel owners exercise their option to purchase the Conference Center prior to 1994. Specifically, the ordinance represents a savings of approximately one-quarter million dollars to the Eugene Renewal Agency and provides for an extraordinary call procedure should the hotel owners exercise their option. Mr. Holmer said he appreciated receiving the memorandum from Public Financial Management, Inc., which recommended proceeding with the advance refunding of the 1985 certificates. He favored taking advantage of the probable future direction of interest rates which indicates that the present value savings would be an additional $240,000 if the rate went down a percentage point between now and October 1. While he said he would support the staff recommendation, Mr. Holmer preferred deferring the decision to a later time. Referring to the extraordinary call feature, Mr. Boles asked whether it would be transferrable if ownership of the hotel changes. Mr. Wong responded that the agreement requires the payment of at least the value of the outstanding debt if the hotel owners choose to exercise their option. Mr. Gleason added that the City's relationship with the hotel has a survivable agreement, and the conditions of the relationship between the Conference Center, parking e structure, and the hotel would have to be renegotiated with new owners. The call provision allows the City to receive full payment to extinguish the debt. Mr. Boles asked if a change in conference center ownership would jeopardize the City's advance refunding. Mr. Wong responded that this has been factored into the price the City will receive for the advance refunding, with the additional call provision costing an additional two percent (i.e., the bonds are selling at 102 percent). CB 4151--An ordinance concerning the refinancing of the Eugene Conference Center; authorizing execution of documents; and declaring an emergency. Ms. Bascom moved, seconded by Mr. Rutan, that the bill, with unanimous consent of the council, be read the second time by council bill number only, and that enactment be considered at this time. Roll call vote; the motion carried unanimously, 7:0. Council Bill 4151 was read the second time by number only. Ms. Bascom moved, seconded by Mr. Rutan, that the bill be approved and given final passage. Roll call vote; all e MINUTES--Eugene City Council July 24, 1989 Page 9