08-27-08 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL AUGUST 27, 2008 The foregoing resolution was duly seconded by Allan. Ayes (5). Nays (0). Resolution declared adopted. The City Administrator reviewed his report dated August 22, 2008 outlining several issues related to the creation of this Housing Improvement Area (HIA). The first issue is that the debt that would be issues for HIA's will be taxable versus tax-exempt, which means a rate between 6.00% and 6.70% depending on the market and term of the bond issue. Secondly, the maximum term of the debt is 20 years. The Administrator pointed out that one HIA may prefer a I S-year term and another a 20-year term. It would be possible to structure the bond to accommodate these different terms. Thirdly, there is the issue of ensuring adequate cash flow given that the bonds are taxable and the impact of prepayments and the City's ability to reinvest prepayment money at similar rates. The Administrator suggested that the best option he has seen to address this is to not allow prepayments after the initial 30-day term once the fee is established. The Administrator indicated that the final issue relates to the City's frontend administrative costs. He indicated that he has suggested to the homeowners' associations that the City would pass on only actual frontend costs versus using a set percentage or amount. The City Administrator indicated that at the September 10"' hearing there will be discussion of the project as well as specific pros and cons related to the project and establishment of an HIA. If the Council adopts the ordinance establishing the HIA, property owners will have an opportunity to overturn the HIA through the submission of a petition signed by 35% of the property owners. The Administrator reported that he has informed the Canabury Homeowners Association that the City has no interest in getting into an adversarial position with the property owners. If the majority support the establishment of an HIA, than the city is willing to assist in the process. The Administrator indicated that if the HIA ordinance is adopted and it is not overturned, the next step would be to establish the fee. McGraw indicated that any homeowners' association interested in this tool will have to work with their homeowners on this issue. McGraw agreed that this is a great financing tool for associations, but the Council will not get in the middle of homeowners' associations and property owners. The Administrator reported that both homeowners' associations interested in the HIA are having multiple meetings with owners educating them on this financing tool. The Administrator indicated that the only risk to the 12