01-26-09 Council Special Minutes

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MINUTES CITY COUNCIL JANUARY 26, 2009 The Engineer then reviewed the proposed project schedule should the project move forward. He noted that the proposed assessment roll is also included for property owners' review. The Engineer then reviewed an issues list supporting why City staff feels that the project should move forward. That listing included information on the competitive bidding environment, oil prices, the fact that the City is maintaining the assessment rate at 20081evels, the fact that this assessment rate has been artificially suppressed for a number of years given it has been inflated by 3% annually when the market increases have been over 6% from 1996-2006, and that interest rates are at a very favorable level. The City Administrator noted the interest rates that the City has utilized over the past five year period. He pointed out that if bonds were sold today, the City would utilize an interest rate of 4.75% for a ten year assessment, which is below the rates charged for the past five years. The Administrator presented a sample assessment calculation comparing a 6% interest rate and a 4.75% interest rate, noting an approximately $110 savings in interest over a 10 year assessment period. Another option would spread the assessment out over a 15 year period, however, the interest rate for that time period would be approximately 5.35%, increasing interest costs to the point where this may not be the best option. The City Administrator indicated that given the fact that oil prices are down and the bidding climate is very competitive, City staff feels that this is a unique opportunity to get some needed street work done at a very good price. A property owner asked when the City would be able to lock in the interest rate. The City Administrator replied that the interest rate would be locked in at the time that bonds are sold. If the project moves forward, the City would begin the bond sale process to take advantage of these lower interest rates. A property owner asked when the decision will be relative to this project. Blesener reported that the Council would take action on the project this evening deciding whether or not to order the improvement. If ordered, bids would be taken and those bids would be submitted to the Council for review. If the bids are favorable, the low bid would be awarded. If not, the project would not proceed. Montour noted that he lives on Desoto Street, and agreed that a mill and overlay of the street was needed. He further noted that the mill and overlay would prolong the life of the street, thus putting off full reconstruction which is substantially more expensive. Montour stated that 2