01/21/1981 Meeting - Laserfiche WebLink

Home Browse Search

e e e asset values are much greater than the indebtedness. Mr. Gleason asked what the ratio of debt to assessed valuations would be. Mr. McGuire stated that three percent is the legal limitation. Mayor Keller expressed some concern about the bond interest money being used for the Performing Arts Center. Mr. McGuire stated that interest on these bonds is being used, but in all funds with idle cash interest, income was very strong and continues to be so. Res. No. 3462--A resolution setting forth measures to correct defi- ciencies disclosed in the 1980 audit report and stating the period of time estimated for completion thereof. Ms. Miller moved, seconded by Ms. Smith, to adopt the resolu- tion. Roll call vote; motion carried unanimously. IV. FINANCING PLAN FOR THE COMMUNITY CONFERENCE CENTER (memo distributed) Mr. Gleason introduced Jeff Tashman, HCC, to provide information. Mr. Tashman stated that the Eugene Renewal Agency is committed to developing the Eugene Community Conference Center. The agency explored three options for financing--tax allocation bonds, general obligation bonds, and certificates of participation--and they have evaluated these in terms of low interest rates and timeliness. The conference center will cost approximately $4.5 million and in addition to the proposed plan, ERA is seeking funds from the United States Economic Development Administration. They have submitted a grant application for $1.5 million. Although this plans calls for the City to pledge its general -fund, it is anticipated that debt service would be met by the Renewal Agency using tax allocation funds. This agreement would be formally stated in an intergovernmental agreement; the City would not be liable for debt service except in a shortfall of tax allocation funds. Staff believes that only a severe property tax limitation measure would cause such a shortfall. ERA will convey the building site and all future improvements--the Conference Center--to a trustee, in this case a bank; the trustee then causes the center to be built by designating ERA to construct the building and by raising funds for construc- tion by selling certificates of participation to an underwriter. These allow the purchaser to earn a portion of the revenues received by the trustee from the City/ERA. The trustee leases the site of the Conference Center back to the City and the rent paid by the City/ERA provides the debt service on the certificates. The lease agreement includes an agreement that the City will purchase the site and the center for a nominal fee at the expiration of the lease term, probably 20 years. The Renewal Agency agrees to annually reimburse the City for rent it pays and ERA would commit all tax allocation revenues which remain after the agency has met its existing outstanding debt service obligations to meet maturing lease rentals to the City. The certificates of participation would provide for lower interest rates as well as being more feasible. The City Attorney's Office and the Finance Department have conceptually approved this proposal and they are asking the council for a similar approval. Later in the spring, staff will bring back for approval the documents to execute the legal instruments for implementation of the financing. MINUTES--Eugene City Council January 21, 1981 Page 5