Item A - Nov.2004 Bond Issue - Laserfiche WebLink

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The tax rate impact from the G.O. Bond options is shown in the following chart. Each option shows the impact of G.O. Bonds repaid over 20 years. The tax rate in the first year would be the highest and would go down over time, so both the first year and 20-year average impacts are shown. The cost to the average tax payer assumes an average home with an assessed value of $154,100 in FY04 (per the Lane County Assessor). G.O. Bond 20 Year Amount First Year Impact Average Impact Tax Rate Average Cost Tax Rate Average Cost Option B $12,620,000 $0.16 $26 $0.09 $18 Option C1 $22,050,000 $0.28 $45 $0.15 $31 Option C2 $47,775,000 $0.60 $97 $0.33 $68 Option D $70,820,000 $0.88 $144 $0.49 $101 The issuance of bonds in Option D would be timed to correspond to when the funds are needed for the construction. A first issue of approximately the amount needed to fund the Community Safety Building plus some of the design costs for the City Hall, would be sold relatively soon after the bond election. A second issue of the remaineder of G.O. Bonds would occur after the first bond issue funds are exhausted. A third issue of limited tax bonds (described below) would be sold towards the end of the project, most likely in FY09, to fund the remaining project costs. City of Eugene Limited Tax Bonds: It is assumed that the City will issue approximately $10 million in limited tax bonds under Option D in FY09. These bonds do not require voter approval and they are secured by the City's promise to pay the debt service from all available funds. The annual debt service on the bonds is estimated to be about $950,000 for 10 years and then $885,000 for the remaining 10 years, depending on interest rates at the time of the bond sale. These annual payments will be made the annual capitalization charge on downtown City office space that is currently directed to the Facility Reserve plus net lease payments made by LCOG or another government for 10 years on 20,000 square feet of expansion space. Facility Reserve Balance: The City has been setting aside funds for replacement of City Hall for several years. As a result, the FY05 budget includes a balance in the Facility Reserve of a little over $7.5 million. It is anticipated that approximately $3.9 million of additional funds will be added to the reserve during FY06 through FY09 from capital replacement charges and repay- ment of the Risk loan. Therefore, approximately $11.4 million could be available for funding of the Community Safety Building from this source. It is recommended that the furnishings, fix- tures and equipment, temporary relocation costs, and moving costs be funded from this source, since G.O. bond proceeds cannot be used for those items. The remainder of the Facility Reserve balance could be used for general construction costs. In Option C2, where all of the Facility Reserve is not used for this project, the balance of about $9 million would be saved as a contribution towards implementing the remainder of the Civic Center vision in a future project.