CC WORKSESSION 05202003 - Laserfiche WebLink

Home Browse Search

St. Anthony Public Facilities Funding Other Issues Pending legislation does impact financing options under consideration for these projects. Legislation, as proposed, will not permit cities to increase their tax rate to pay debt service for projects of this nature. One version of this restriction would be in effect for two years, the other version contains an indefinite limitation. There are exceptions to the bill including projects for which contracts have been let for all or part of the project prior to April 30, 2003. The City's contract with Krause Anderson permits the City to proceed with this project if bonds are sold prior to June 1, 2003. In order to sell bonds prior to June 1, the City would need to authorize the sale no later than May 13, 2003. It is highly likely that final legislation regarding issuance of debt will be different than the current bills. It is possible that there will be no new limitations regarding debt issuance. However, at this time it is not very clear what, if any new limits will be in effect in the future. The fact that proposed legislation impacts current city actions is unusual. Since the proposed legislation is essentially "retroactive"bond counsel is required to disclose the impact of that the proposed legislation would have on the ability of the city to repay debt if the legislation were approved. Decision Options Financing options for the Public Works and Fire Station are currently impacted by pending legislation. The final form of the legislation may or may not impact options for financing these facilities. Unfortunately, the final form of legislation will not be known until it is too late for the City to act on an option that would permit financing under current conditions. Financing major projects such as those under consideration by your city requires careful evaluation of a number of factors including need, alternatives, cost and financing method. Given these issues the following options are provided for consideration: Option Discussion Authorize 1. If proposed legislation is approved, referendum would need to be Referendum conducted prior to December 31, 2003. 2. The Public Facilities Study Group has made significant efforts to involve the public in the study of the public facilities efforts. 3. If referendum is unsuccessful it would be difficult to consider other options to finance facility needs. 4. Some communities consider public works and fire stations essential facilities and use lease revenue bonds to finance in a similar manner as other essential facilities. 5. General obligation bonds will be sold at a slightly lower interest rate Page 4 of 5