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MINUTES <br />City Council <br />February 7, 1987 <br />Finally, $100,000,000 would be set up in a reserve fund invested <br />in Government-backed loans. $195,000,000 would be left for <br />project loans. <br />Mattson explained that when a developer came to the City, he <br />would be required to meet certain qualifications as well as <br />being required to submit a AAA letter-of-credit. Money from <br />the fund could be borrowed to the developer at a rate of 9% to <br />10%. <br />Mattson explained that the City's entering into this consortium <br />will not effect the City's credit rating, nor the City's ability <br />borrowing ability. <br />Farnham explained that their firm is anticipating that interest <br />rates will rise, and this money will be attractive to developers. <br />Collova asked what percentage of the pool the City would have <br />available. <br />Farnham explained that they are developing a formula to determine <br />this. <br />Farnham also explained that the ability to set up such a pool is <br />a loop-hole in the new Federal law, and things are moving quickly <br />before this loop-hole is closed. <br />Scalze suggested that if the City join this consortium, that it <br />advertise the availability of this funding to developers. <br />Farnham agreed and reported that developers would have their <br />qualifications reviewed by a bank or trust company that would <br />be equipped and staffed to handle the process. Mattson stated <br />that packets could be available at City Hall explaining the <br />program and directing developers to the bank or trust company to <br />get their questions answered. <br />Mattson explained the process for getting this program underway <br />and reported that it will be necessary to hold a public hearing <br />prior to the adoption of a resolution approving the City's <br />participation. Mattson suggested that the City begin this process <br />as soon as possible. <br />Farnham also reported that the Council will have to identify <br />parcels or areas where the City wants to encourage d.evelopment <br />or redevelopment with the use of these funds. <br />Council discussed the percentage of the pool that the City should <br />participate in, keeping in mind that a third of the amount would <br />be set aside in a reserve fund. Amounts ranged from $25,000,000 <br />to $35,000,000. <br />Page -2- <br />