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HomeMy WebLinkAbout07/09/1990 Council MinutesCOUNCIL WORK SESSION JULY 9, 1990 Refinancing of 1987 GO Bonds Mayor Bisel called the work session to order at 5:30 P.M. Council Members present: Neal, Reinert, Bohjanen. Council Member Kuether arrived at 5:45 P.M. City Engineer's, Dan Boxrud and Darrell Schneider; Public Works Director, Don Volk; Planner, John Miller; Fiscal Consultant, David MacGillivrary; Administrative Assistant, Dan Tesch and Clerk Treasurer Marilyn Anderson were also present. The purpose of the work session was to discuss the refinancing of the 1987 General Obligation Temporary Bonds. Mr. MacGillivrary explained that he is continuing with the request of the Economic Development Authority to purchase a $1,115,000.00 bond for land acquisition and construction of a new fire station. He also noted that the City should not approve more than $5,000,000.00 bonds per year because of U. S. Treasury regulations. Mr. MacGillivrary distributed a work sheet outlining the original 1987 Temporary GO Bond noting that on September 1, 1990 the City is responsible to pay the sum of $1,693,500.00. He noted that there is enough cash on hand in this bond fund to reduce the principal amount to $775,000.00. The balance will be refinance by another bond. Mr. MacGillivrary also listed the possible sources of funding for the balance due for the 1987 Temporary GO Bonds. He was concerned because a large portion of the balance ($612,484.00) will have to be paid from future connections. Mr. MacGillivrary gave a brief background on the 1987 bonds and explained the question now is whether the remaining balance of these bonds should be refinanced with another temporary issue or with a long term bond. He noted the difficulty of trying to assess property owners because of the Charter provisions. The original 1987 Bond assumed that - there would already be a substantial number of connections. These connections have not materialized. Mr. Reinert asked how many connections would be needed to finance the $612,484.00 deficit. Mr. Schneider said approximately 400 connections. Mr. MacGillivrary recommended that the Council proceed with issuing another temporary bond to refinance the balance of the 1987 GO Temporary Bond. This would allow the Council time to get a handle on what is yet to be connected so that the capacity in the trunk line can be utilized. Mayor Bisel asked if the City was prudent in issuing a three (3) year temporary bond in 1987. Mr. MacGillivrary said yes. He noted the options would be limited if the City had bonded long term. There was discussion regarding the subdivisions that were included in the estimate of connections for the 1987 Bond. It was noted that the subdivisions are about 75% completed, not 100% as anticipated. PAGE 1 1 f COUNCIL WORK SESSION JULY 9, 1990 Refinancing of 1987 GO Bonds The Carlson property south of Shenandoah was discussed. Mr. Schneider said that if Mr. Carlson can proceed with his development, approximately 50% of that entire area is all that is needed to pay the balance of the 1987 Bond. 1990 New Projects Mr. MacGillivrary noted the new projects that will need funding. They are Second Avenue Improvement, Pheasant Hills and Brandywood Estates subdivisions. Mr. MacGillivrary expressed concern regarding the number of building permits that the City could issue per year. He asked the Council if these two new subdivisions were approved, funded and constructed, would they take away permits from the area needed to fund the refinancing of the 1987 Bonds? Mr. MacGillivrary noted that the City did not reach the anticipated new connections for 1989 and probably will not for 1990. Mayor Bisel said that infill in the areas where trunk lines are constructed is needed to help pay the bonds. In fill is needed south of Birch Street. Mr. Miller noted the property where there have been requests for services: Montain property, Carlson /Soukup property, Barott property and possibly a new school on the Lehmann property. There may also be something happening on Lakes Addition No. 9. He explained that if all of these properties were to develop there would be more connections than needed. Mr. MacGillivrary noted that other bond issues were structured in the same manner as the 1987 Bond. He is hoping to develop a biannual report for the Council so that they can readily see if connections are being made to pay the bonds as was predicted. Mayor Bisel explained that the gravity trunk sewer line is crucial to this entire area. He felt the problem was how to get the trunk line from the Laurene Avenue lift station to Ware Road. Mr. Schneider said he felt the most expensive portion of this trunk line would be near Birch Street. Council Member Kuether updated the Council regarding tie land purchase for the new fire station. She noted that three (3) lots starting at 77th Street had been purchased. Dr. Sulsdorf owned the lot north of the fire station and E Rehbein and Son owned the lot north of Dr. Sulsdorf. Rehbein & Son were willing to sell their lot to the Ci' but Dr. Sulsdorf was not. The matter was resolved when Dr Sulsdorf agreed to swap lots with El Rehbein and Son then El Rehbein and Son agreed to sell the new Tot o the ;. The City will own five lots in a row ztlong Lake Drive th -,r • 7,z . ;_; , - - , �_c. location of the new e station. - Council Member Bohjanen moved to close the work sessi t PAGE 2 147 4 COUNCIL WORK SESSION Refinancing of 1987 GO Bonds JULY 9, 1990 6:23 P.M. Council Member Kuether seconded the motion. Aye. These minutes were considered, corrected and approved at the July 23, 1990 regular Council meeting. ri P G. An•erson, Cler Treasurer Mayor Har'ol'd L. Bisel PAGE 3