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<br />- <br /> <br />e <br /> <br />e <br /> <br />would do so. Mr. Rankin stated that this type of financing requires a reserve <br />fund to serve for one fiscal year. This would help for one year to meet the <br />obligation. Ms. Wooten asked if the sale of the certificates would be charged <br />against the City's overall bonding capacity. Mr. Rankin responded that in their <br />opinion it would not be charged against the general obligation limitation <br />because no ad valorem taxes would be levied to meet the debt service. Mr. <br />Gleason stated that the obligation is against the general fund, not against'the <br />assessed taxes. Mr. Lindberg noted that even if this were charged against the <br />bonding capacity, that would not limit other projects. Mr. Rankin stated the <br />City can deduct issued utility and water bonds and bancrofting and then have the <br />three-percent limitation begin after that. Mr. Lindberg stated that the City <br />now has just-over one percent and asked how this would affect that. Mr. Gleason <br />stated that it would be insignificant and less than two percent total. Mr. <br />Lindberg asked if there is a possibility that this could go to the ballot as <br />part of the Tier 2 portion of the budget. Mr. Gleason stated that the City is <br />obligated only if the tax allocation financing does not cover the debt service <br />on the bond. In the fall, they will be obligated to place the dollars into that <br />revenue account for 12 months. They would have to decide then what to do about <br />Tier 2. The tax allocation would probably never go to zero, and these are very <br />conservative figures. <br /> <br />Mr. Lindberg stated that he feels this is a very appropriate way of doing <br />this financing. The issue is the extent to which the council wants ERA to <br />continue along this kind of work and whether the council has confidence in <br />them to continue. If the City does not enter into this agreement, it will <br />strap their situation while they are being charged to accomplish a lot without <br />many resources. Ms. Smith asked if adopting this proposal would have an effect <br />on the general fund this year. Mr. Gleason stated that the contract will not <br />affect the resource allocation within the budget process. Ms. Smith asked what <br />relationship there will be with ERA if the council approves this proposal. Mr. <br />Tashman stated that the agency would structure specific financing plans this <br />spring, by which time they would know what the costs will be and they will come <br />back later for final approval from the council. Ms. Smith encouraged staff to <br />keep the council as involved as possible along the way. Mr. Gleason responded <br />that this would occur. There will be two more opportunities to make decisions <br />after today. <br /> <br />Ms. Schue complimented ERA and HCC staff for bringing this proposal to the <br />council. The proposal has financing advantages. She is comfortable with it <br />and with pledging the security of the general fund since it seems to be a good <br />way to do this project, particularly with the safeguards that are written into <br />the proposal. <br /> <br />Ms. Wooten stated that she is in favor of the concept, but she has many ques- <br />tions and would like to have them answered. Under the trusteeship arrange- <br />ment, she wondered who would be responsible for construction oversight and <br /> <br />MINUTES--Eugene City Council <br /> <br />January 21, 1981 <br /> <br />Page 7 <br />