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I <br />I <br />I <br />I <br />I <br /> <br />Chairman ~eitman replied that it will never get to the point of bond unless <br />it is approved and you can have no sounder guarantee than that. <br /> <br />Mr. Burggraaff replied that you would want the bond council to make sure it <br />is air tight and is this clear enough with all the provisions that are in <br />the charter. From the standpoint of Ramsey, he suspects it will make it <br />very difficult to move ahead with public improvements. <br /> <br />Commissioner Bauerkemper noted that this would not be putting it to a city-wide <br />vote; it is a neighborhood situation. <br /> <br />Chairman Heitman noted that Section 8.04.02 is the only section that gets <br />away from the neighborhood situation. <br /> <br />I <br />I <br /> <br />Mr. Schnelle pointed out that the real danger is in providing public <br />improvements to the residential homeowner, who for some reason or another <br />gets into a position where he can't pay his assessments. <br /> <br />Commissioner Bauerkemper pointed out that there is a home on the property <br />to serve as collateral. <br /> <br />I <br />I <br />i <br /> <br />City Accountant Moen brought up the subject of improvements that are not <br />100% assessed out and stated there are MSA cases that are very much needed <br />improvements, that could have been stopped by this charter. <br /> <br />Commissioner Bauerkemper stated that it would have taken 25% of the registered <br />voters in Ramsey to stop a project like 155th and Variolite. <br /> <br />Commissioner Lichter inquired as to the difference between obligation and <br />revenue bonds. <br /> <br />! <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />Mr. Burggraaff replied that general obligation is a bond issue where security <br />issue is the full faith and credit of the city, which means you have to levy <br />enough property taxes as necessary. General obligation bond is the best kind <br />of financing a city can sell and the interest rate is the lowest interest <br />rate you can pay. Revenue bonds have a higher interest rate and you have <br />to be able to demonstrate a certain amount of performa indicating enough <br />income generation to make the payments. Even without a charter, there are <br />State restriction on how much money a city can borrow. In addition, under <br />State law if you have a special assessment project and at least 20% is <br />assessed you don't need a referendum, but in most other situations you have <br />to have a referendum. <br /> <br />Mr. Schnelle stated that the City is requiring of developers 20% up front <br />and 100% assessed. <br /> <br />Chairman Heitman inquired as to what guarantee there is that the City will <br />receive the 100% assessment. <br /> <br />City Accountant Moen replied that there is no guarantee - it would be just <br />the same as street improvement projects are dealt with. If we need to levy <br />for the payment, we will do so. Typically, if it goes into failure, it is <br />in an existing residential area. <br /> <br />I <br />I <br /> <br />Chairman Heitman replied that when a mistake is made, it is compounded by <br />pumping m¢.re money into it, when in fact the better decision is to cut losses <br />and get out. <br /> <br />CC/November 10, 1983 <br />Page 9 of 11 <br /> <br /> <br />