Agenda - Planning Commission - 10/19/1999 - Special Meeting

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State regulations/standards/definitions of redevelopment areas. (This question has been forwarded to Briggs & Morgan.) What is the reason for urgency for the sale of bonds? The City is attempting to sell the bonds before the end of the year in order to avoid the unknown fluctuations in the underwriters' rates that may occur in January. The City is attempting to creatively meet the immediate needs of the City and still comply with the budgetary restrictions created by levy limits imposed by the State Legislature. As soon as the bond proceeds are received, the City can use the proceeds to pay the architectural fees which are averaging about $3,000 per month. Architect fees are not allowed to be reimbursed solely on passing of the reimbursement resolution, which applies only to capital expenditures. Why is the City not financing the project intemally through an inter-fund loan? The City had originally intended for the Fire Hall project to be an interfund loan through the Landfill Trust Fund. In adopting the proposed 2000 levy and budget for 2000 it was decided at this time (September 1999) to add the first year principal and interest of the fire stations bond payment to the proposed 2000 levy as a special levy. By placing the bond payment as a special levy, the only way that this could be included without a referendum was to have the sale of the bonds through the EDA. if the City was to have obtained a referendum, the election would have needed to be held by September 1, 1999. By including the bonds principal and interest payment as a special levy, this freed up approximately $125,000 that the City had incorporated in its General Fund Budget for 2000. This is not to say that the City then had an extra $125,000 to do with as they may, as the General Fund Budget needed this additional $125,000 to bring it closer to balancing the budget. The City's 2000 budgets expenditures were exceeding revenues due to personnel additions, additional services, and normal inflationary increases. By including the fire station debt as part of the special levy, it was determined that the cost would be more fairly distributed, as residents of the City will be paying on the benefits of having an additional fire station for the next 20 years. Thus, someone moving into the City in the next few years would help to pay for the station, since they are also getting the benefit. It must be remembered that a proposed levy is just that, proposed. A levy can be decreased, but it cannot be increased. It was such that the fire station debt was included. It can be determined at a later date that the City may not want to · Page 2