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MINUTES <br />City Council <br />P~ar•ch 9, 1988 <br />wher•e the City would make payment on the financing to the School <br />Distr•ict, who then made payment to Jur•an & Moody. A 5 year• amor~itization <br />per~iod was involved and the inter•est r•ate on the financing was between <br />7 and 7 1/2%. The School Distr~ict was the leasee of the pr•emises and <br />Jur•an & Moody was the leasor. The City's obligation was to the School <br />Distr•ict thr~ough a joint power•s agr~eement. Payments wer•e over• a 5- <br />year• peri od. <br />Blesener• asked if such debt was r~eflected in the city's bond indebtedness. <br />Far•nham r•eplied that this would be an accounting decision. <br />Fenlon r•epor•ted that the fir~st year•'s payment was a liability to the City, <br />however•, the r~emaining 4 year~s' payments would be, most likely, a foot- <br />note disclosur•e. <br />Fahey then pointed out the availability of the Capitol View facility <br />and asked if the City could be the pr~inciple pur~chaser~ of this facility <br />and sublease the facility to some other• tenant. <br />Fenlon stated that a lease/pur~chase agr•eement would be possible in this <br />instance if it wer~e found that Capitol View facility was essential to <br />the oper•ation of the City. <br />Fenl on commented that i n or•der~ to pr•ovi de assur•ances to an i nvestor•, <br />the Ci ty must make effor•ts to pr•ove that i t wi 11 appr~opr•i ate funds <br />and would not substitute another~ facility for• Capitol View for~ a per•iod <br />of one year~. <br />Far•nham poi nted out that the pur~chase of par•k 1 and wi 11 not wor~k under• <br />a lease/pur~chase agr~eement, as par~k land will not meet the essential- <br />to-the-oper~ation-of-the-City definition. <br />Fahey pointed out that with Capitol View, the City has deter~mined it <br />needs to contr•ol the futur~e occupancy of that building, and feels that <br />the occupant should be an educational institution. <br />Fenlon stated that in the case of an educational institution, the <br />financing would be taxable financing because the building would be <br />used by an institution that is consider•ed a business. Fenlon stated <br />that the use of the building would :~ave to be looked at to deter~mine <br />whether• or~ not lease/purchase financing could be used. <br />Blesener• pointed out that the Cit,y would like to contr~ol the pool, <br />gymnasium and outside pr•oper~ties at the Capitol View site. <br />Fenlon r~eplied that these facilities could be car~ved out and lease/ <br />pur~chase financing used. However•, unless the balance of the building <br />was used by another~ public entity, ther•e would have to be separ~ate <br />financing for• the r•emainder• of the building. <br />Fahey stated that in this caset the purchaser of the building would <br />have to deal with the School Distr•ict on financing. <br />Page -2- <br />