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Finance Officer l,und advised that most of the City funds are set up in a way that they are eligible <br />/bt inter-Fund loans. She explained the purpose of this agenda item is to begin the financing of <br />tho Municipal Ccnter so it can be brought forward the end of May. <br /> <br />l'aul l)cmna of Northland Securities reviewed scenarios to lower the total tax capacity rate of <br />2006 to a more manageable level. He reviewed the financing timetable and explained the latest <br />date thc debt could be issued would be May 24, 2005. <br /> <br />(~ounc].hncmber Elvig asked if there would there be any impact if the City were to proceed with <br />capitalized interest. <br /> <br />Mr. l)onna replied all else being equal he does not think the rating industry would view <br />capitalized interest as a negative. Due to the ability to begin lewing it would likely be the <br />preferred method, and it will save dollars in the long run. <br /> <br />Counci hnember Elvig stated his opinion would be to proceed with the capitalized interest, which <br />will provide the City with the ultimate flexibility. If they do not proceed with the capitalized <br />in/crest at this time they will not be able to do it later. <br /> <br />Mayor Gamec inquired of Mr. Do~ma's opinion regarding the capitalized interest. <br /> <br />Mr. l)omm indicated he likes the idea of the Landfill Trust Fund as a rainy day fund, and it could <br />be used to buy down this project. He also understands the flexibility argument with the <br />capitalized interest. <br /> <br />Mayor (;amcc stressed that funds should be available in the Landfill Trust Fund to be utilized <br />during unexpected catastrophic situations, such as the major storm that occurred several years <br /> <br />Councilmem bet Strommen noted Councilmember Cook had pointed out that the interest from the <br />l,andfi]l Trust Fund currently goes towards parks. <br /> <br />Cotmcihncmber Cook stated once they get past keeping the 2006 taxes down they must start <br />thinking how they will bring the general fund up to cover the things development does not cover. <br />I lc would bca little concerned about borrowing money now to be paid off in eight years due to <br />thc interest costs that would be incurred if it is not paid offat that time. <br /> <br />Mr. Donna advised a combination of the Landfill Trust Fund and capitalized interest could be <br />utilizcct. <br /> <br />The consensus of the Council was to direct staff to proceed with preparing financing for the <br />Municipal Center with a 50/50 combination of the Landfill Trust Fund and capitalized interest to <br />l(¢wcr the tax capacity rate for 2006. <br /> <br />City Council Work Session/April 5, 2005 <br /> Page 3 of 6 <br /> <br /> <br />