11-12-97 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCIL NOVEMBER 12, 1997 Morelan asked how much the 14% would net the City over the life of the bonds. The City Administrator pointed out the analysis that he prepared for the Council, and estimated the amount could exceed $1 million versus the $200,000 issuance fee that the City would typically collect and which HADC is requestin~ be waived. The exact amount will be dependent upon future valuations, tax rates, and State determined class rates over the life of the bonds. Fahey pointed out that the 14% is a safety net for the potential decrease in real estate taxes, and supported the recommendation of the City Administrator on this issue. Pedersen pointed out that if the Council took no action and did not approve tax exempt housing revenue bonds, the decrease in real estate taxes would still occur. Morelan asked what will happen with the rents bein~ char~ed at Montreal Courts. Echtenkamp replied that they are proposing no change in rents at this time and felt future changes would not be significant. Goldmark's goal is to decrease the vacancy rate at Montreal Courts. Morelan asked if the 40/60 test must be met throughout the life of the bonds, and asked who was responsible for ensuring that this test is met. Mary Ippel, Bond Counsel, replied that the 40/60 test must be met. If it is not, the bonds would default and would become taxable. Ippel explained that there would be a regulatory agreement in place that must be complied with. A trustee will be appointed, and that trustee will be responsible for ensuring that all requirements are met. Also, any conditions that the City places on this transaction will be spelled out in the loan agreement and can be included in the regulatory agreement if the City desires. Morelan asked the current tenant mix at Montreal Courts. Echtenkamp reported that they last checked the tenant mix in February of this year. At that time, all tenants except for approximately 15 units met low income requirements. Most of the tenants in these 15 units were in the process of building homes and were short-term tenants. The timing of the public hearing at which the Council would be asked to act on the tax exempt housin~; revenue bonds was discussed. It was the consensus of those present that the public hearing would be scheduled for 6:30 P.M. on Tuesday, December 2"d. Official notice would be published in the Pioneer Press with an additional notice in the Review.