04/16/1980 Meeting - Laserfiche WebLink

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Act was not meant as a subsidy for builders or as a profit for the City. It is a valuable tool and should be kept. The Homebuilders' Association recommended to Springfield that they raise the rate to ten 4It percent. They recommended a variable rate so if the bonds are sold at a lower rate the benefit can be passed on, and that there be a .5-percent adjustment to cover administrative costs. The association will lobby in the legislature to increase the ceiling. They would rather have a higher interest rate than lose these projects. Of the projects that have been filed in 1978, 75 percent of the engineering has been done by City staff. The builders have committed dollars to these projects. They have commitments to bankers. The assocjation will help council in surveys of builders to find out the effects of this contemplated action. Public hearing was closed. Manager explained that staff would come back with an ordinance to raise the interest rate within a week or two and with alternate proposals within two to three weeks. They were still concerned about continuing to incur liabilities prior to the June bond sale. Mr. Teitzel said all the construction plats have been filed and are ready to go as Mr. Bennett had indicated. Manager said he was reminded that although some builders were present, property owners on the affected properties (Cal Young, Willagillespie) were not present and those are the people who would be affected by the ten-percent rate. Staff felt that it would be desirable for the City to stick with the seven-percent policy for the $12 million (not ~ including 1980-81). He suggested that an eight-percent to ten-percent .., adjustment in the systems development tax could make up most of the deficit as it applies to new subdivisions. They would not be paid until the permits are requested. Ms. Schue outlined the two philosophies. One is where property owners and subdividers pay for their own improvements versus the public's expectation of a seven-percent interest rate. She said she was in favor of protecting the City's money but was concerned about the City's "good faith." She asked for more information on exactly what people were told about an interest rate of seven percent. Ms. Miller asked where Willagillespie and Cal Young roads fit into the categories in the attorney's memorandum. Manager replied they come under #3 and #4. He added that the category of 1980-81 projects should be considered #5. She indicated they needed more information. She would presently advocate raising the Bancroft rate on #3, #4, and #5 to ten percent with provision that if they could be sold for less, there would be a reduction in the rate. She said they cannot do anything with category 1 and category 2 is a sticky issue. She would need more information. She felt the City could not subsidize projects on residential streets. Arterials might be different. She thought they might have to freeze Bancroft bonding until measures are worked out. e 4/16/80--6