04/30/1980 Meeting - Laserfiche WebLink

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Mr. Lieuallen inquired if the interest rates could be placed high enough on future bond sales to cover the subsidy of the first bond sale. Mr. Long replied that the City cannot make up deficiencies in bond sales in that manner. It has to come from a direct tax levy or the General Fund. Manager explained that the City has, in the past, made a profit on these bond sales and it has gone into the General Fund. Mr. Delay was concerned about the City's exposure created by the time lag between the sale of the bonds and the previous contractual agreements between the City and developer. He asked if the agreements could stipu- late adjustable rates. Manager replied that Mr. Teitzel, Public Works, would address this issue. Mayor introduced Randall Hledik. Randall Hledik, Wildish Construction Company, PO Box 7428, said that in previous testimony, the construction industry said it would support increased interest rates for Bancroft bonding. They are into the 1980 construction season. Twenty subdivisions await council action. Further delay would result in this construction season being severely impaired. Unemployment would result. Late starts mean late completions. The City, should they extend completions into 1981, would lose the revenue for 1980. He urged council action to make Bancroft financing available. CB 2112--An ordinance regarding interest rates on amounts due the City. Ms. Smith moved, seconded by Mr. Lieuallen, that the bill be read the second time by council bill number only, with unanimous consent of the council, and that enactment be considered at this time. ,Mr. Delay presumed that the ordinance would apply to all situations that it can. Manager replied that it could apply to one area, not another, and then there was a "gray area." This "gray area" would need specific council authorization and will be brought back to the council for con- sideration. Mr. Delay asked about the financial liability that could occur due to this ordinance increasing the rates. Mr. Long replied this particular ordi- nance does not seem to have any financial risk; it will improve the City's situation. The next areas of consideration are the areas of potential risk. Motion carried unanimously, and the bill was read the second time by council bill number only. Ms. Smith moved, seconded by Mr. Lieuallen, that the bill be approved and given final passage. Roll call vote. All coun- cilors present voting aye, the bill was declared passed and numbered 18616. 4/30/79--4 <> ,. . . --