04/16/1980 Meeting - Laserfiche WebLink

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. Mr. Long further explained the bond market process by saying that the projects are lent funds at one interest rate prior to the City bond sales. There is no assurance that the bonds will be sold at that rate so it is presently a hazardous situation. He added that even the bond counsel is unsure of the future rates. He said that the City can charge ten percent with City Council approval, and perhaps one can sell them for 9-1/2 percent in June. Manager said there will be no restrictions for a developer who is able to raise his own capital for the improvements. Mr. Haws asked staff to explore all possible alternatives before saying "no" to developers. e Mr. Long indicated that in regard to future projects one could estab- lish a sort of "security system" or could decide to do some projects and not others. Ms. Smith asked about the impact of this on new sub- divisions. Mr. Teitzel responded that these include about 25 subdivi- sions, approximately 400 lots, totaling about $4.8 million. Ms. Smith added that although the City cannot finance projects above its means, she was concerned about these new subdivisions. Mr. Lieuallen indi- cated that we are talking about eliminating a type of financing, not making a law prohibiting subdivision development. He asked what deficit would be incurred if funded at 7-percent interest and the bond was at 10 percent. Manager said the difference is 3 percent each year, approximately $60,000. In response to Mr. Lieuallen's question, Manager said that street improvements in some area~ such as Cal Young and Willagillespie could be continued as they are important arteries and not subdivision development. Mr. Lieuallen agreed with Ms. Smith and Mr. Haws that more information was needed for alternatives, especially with regard to category #4, 1980-81 projects. Manager noted the first bond sale of $4.4 million would result in a $60,000 deficit. Mr. Long said the question for council to decide was whether they wanted to take any steps to eliminate the deficit on the balance of the $12 million that is to be bonded or if they wanted the City to pay for the deficit in any other way; lf so, in what way. The second question is to decide what to do about the 1980-81 projects. Mr. Lieuallen said more information was needed as to the impact on developers of eliminating this funding or whether developers could finance improvements on their own. Public hearing was opened. John Bennett, Homebuilders' Association, 3282 Gatewa , reminded council that of the 60,000 deficit, only a small part would go to finance new subdivisions. He said most of his comments come from the City of Springfield's consideration of this same subject. He said the Bancroft e 4/16/80--5