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iqnance Officer Lund advised that most of the City funds are set up in a way that they are eligible <br />l'or inter4'tmd loans. She explained the purpose of this agenda item is to begin the financing of <br />thc Murfici pal Center so it can be brought forward the end of May. <br /> <br />l'aul Donna 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 />Councilmember Elvig asked if there would there be any impact if the City were to proceed with <br />capitali×ed interest. <br /> <br />ivh~. Donna 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 levying it would likely be the <br />preferred method, and it will save dollars in the long run. <br /> <br />(~ouncilmcmber 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 />interest at this time they will not be able to do it later. <br /> <br />Mayo r ( ~ am eci nquired of Mr. Donna' s opinion regarding the capitalized interest. <br /> <br />Mr. Donna 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 />capital ized interest. <br /> <br />Mayor (;amec 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 />ago. <br /> <br />(',ouncil m ember S trommen noted Councilmember Cook had pointed out that the interest from the <br />!~ancllSl] Trust Fund currently goes towards parks. <br /> <br />Councihnember Cook stated once they get past keeping the 2006 taxes down they must start <br />dfinki ng how they will bring the general fund up to cover the things development does not cover. <br />Ifc would be a little concerned about borrowing money now to be paid off in eight years due to <br />thc inlerest costs that would be incurred if it is not paid off at that time. <br /> <br />Mt'. Donna advised a combination of the Landfill Trust Fund and capitalized interest could be <br />milJzed. <br /> <br />Thc 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 />lower thc tax capacity rate for 2006. <br /> <br />City Council Work Session/April 5, 2005 <br /> Page 3 of 6 <br /> <br /> <br />