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LAKE ELMO CITY COUNCIL WORKSHOP JULY 24, 1989 The City Council met in special workshop on Monday, July 24, 1989 at 7:30 a.m. in the Council chambers of the City Hall. The subject and purpose of the meeting was to accept from Public Financial Systems the draft Financial Feasibility Analysis for improvements to Section 32/33. Present were: Mayor Sue Dunn, Councilmember.s Chuck Graves, Lee Hunt, Don Moe and Todd Williams. Also present were: Public Financial Systems representatives Kathy Aho and Rusty Fifield, City Attorney, Fritz Knaak; City Administrator, Patricia Morrison; Financial Director, Marilyn Banister excused herself at 8:00 a.m. Ms. Aho and Mr. Fifield advised the Council that Lake Elmo and Oakdale have the same options available for financing of the sewer and water infrastructure within Section 32/33. They discussed the four means of financing and recommended of the four G.O. Improvement Bonds and/or G.O. Tax Increment Bonds as the most reasonable approach. They also advised: The City should have an assessment policy in place; principal on bonds should not be deferred further out than three years; the "but for" test for TIF could be met with this project, - the most appropriate TIF would be economic development and riot housing or redevelopment TIF's; maximum life of economic development TIF would be 10 years with a maximum of 8 years of increment collection; that a TIF should be created only when development is there and ready to go; that at that time the City could create a development district and designate individual districts as development occurs; that the City could indicate Section 32/33 as a planned, development district to demonstrate support for developing the area, but not actually designate district, as this sets the clock ticking; The engineer's feasibility report was used for improvement costs, with an increase of two years capitalized interest and 1 1/2% allowance was added for bond sale (bringing costs to $3,875,000); bonds could be issued for 20 years with an estimated interest rate of 7 - 7 1/2%; It was possible to get insurance to cover liability for City (in case of non-payment of assessments to cover debt service of bonds), however, the only real assurance to alleviate risk was for substantial development to come in to assure payment; The affected area is a good, viable developable area; however, the eastern area of Metro is slow in attracting development, and so assurance of timely development not necessarily available;