Agenda 02/09/1999 - Laserfiche WebLink

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223 THURSDAY. JANUARY 21. 1999 Mr. Rose continued the presentation by stating that the financing strategy provided showed the City's existing debt with new debt service for specific project layered in witha critical consideration for proper timing. He stated that the debt strategy shown first recommended that the City take advantage of the new Literary Fund loan limits and borrow $7.5 million for the Albert Harris School renovation project, at an interest rate of 3% or less. The first step in the financing of this project, however, was stated as getting the lowest possible interest rate on funds for interim financing of the project, while waiting for Literary Loan fund approval. A full explanation of the entire Debt Financing strategy was then provided, listing projects to be included, amount to be financed for each project, annual debt service figures, and how various elements of the City's available revenues would be used to service the debt without the need to increase taxes. Mr. Rose showed how knowledge of the length of the construction time on each project was used in the strategy, and how the City's existing loan of $2 million could be refinanced into the overall debt picture for a lower cost on this debt. He also showed how the timing of assumption of new debt could be accomplished so as to minimize the total of debt incurred over the course of the projects to be done. Mr. Rose emphasized that all current debt of the City was represented in the figures, and all capital projects under consideration were included. Council Member Haskell asked whether anticipated new 599 Fund revenues from the State were included in funds projected to service the debt shown, and was told that these funds were not included. Mayor Crabtree noted that this fact made the strategy presented that much stronger, since the likelihood of provision of these additional revenues was quite strong. Mr. Rose then noted that all revenue projections in the strategy presented were very conservative, with rates of growth in the value of the tax base and real estate values projected at well below historical patterns, and no provision for growth in Enterprise Fund revenues.' Under the plan of finance, Mayor Crabtree questioned the need for a bond rating. Mr. Rose replied that a bond rating would not be necessary for a small bond issue, but that if Council moved ahead on all the projects under consideration the rating would provide very significant savings in finance costs. Mr. Rose indicated that he felt the City would be able to receive a strong A rating, based on their analysis. Three options for the total finance package were presented, based upon three different scenarios for jail project