Item A - Nov.2004 Bond Issue - Laserfiche WebLink

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For Options A through C1, Facility Reserve amounts are relied on beyond the end of the construction date. This will mean that the City will have to enter into interfund loan agreements in order to pay the construction costs and repay the loans when future Facility Reserve amounts are available. Telecommunications Funds: In December 2003, the Oregon Supreme Court ruled in favor of the City affirming the City's right to collect the 2% telecommunications tax on non-local ex- change revenue. In April, the City received roughly $9 million representing Qwest's interpre- tation and calculation of payment of the tax and interest on revenues earned from July 1997 through December 2003. This payment represents the last of the large expected past period pay- ments/settlements of the telecommunications tax. After consulting with the City Attorney, accountants and auditors, and based on Qwest's assertion that their payment is contingent on the resolution of a separate legal challenge, recognition of this payment was also deferred until that case is decided by the 9th Circuit Court of Appeals. Regardless of the Court's decision, the City Attorney believes, however, that these funds will ultimately be available to the City. A decision from the 9th Circuit is expected in the relatively near future. The City is also expecting about $800,000 from Qwest during FY05. The total of these two amounts, $10.2 million, is included in some of the financing plan options as a subsidy for the Civic Center Vision. While past council direction has devoted funding from the telecommunications tax to telecom- munications projects of community benefit, the settlement payments provide a unique oppor- tunity to fund a large portion of the Civic Center vision. This large one-time resource is also appropriately used for a high-priority capital project under the City's financial policies. The figures shown in the financing options A through C 1 and D represent the deferred revenue amounts plus the amount needed for telecommunications projects within the building. Option C2 includes only the amount needed for telecommunications equipment and retains $10.2 million for other uses. Right-of-Way Revenues in the General Fund: The City has been the subject of legal challenges to the imposition of right-of-way revenues in the General Fund. In addition, the City has been performing audits on some of the payers of the right-of-way fees. The largest of these revenues is related to the Qwest lawsuit. Qwest appealed the US District judge ruling favoring the City and the 9th Circuit Court heard arguments in November 2003. Staff anticipates a ruling some time in early FY05. Consistent with the City's practice of deferring recognition of contested revenues, the City has deferred recognition of these revenues while awaiting the decision of the court and potential additional appeals. There is some risk to relying on this resource for the financing plan, however. Should the court or any future appeal be decided against the City, this resource would not be available for this project and the City would have to develop an alternate financing plan. Urban RenewalAgency Funds: The City Council is currently considering amending the urban renewal plan for the Downtown District in order to use tax increment funds for any project other than the library. If those amendments are approved, the URA could contribute $750,000 toward the purchase and demolition of the butterfly parking structure from the County for redevelop-