CC 03-30-1981 - Laserfiche WebLink

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. . ." That's because of money market conditions and the high interest rate. In order to achieve an interest rate on our bond issue, the necessary financing, you have to be within that 15 year period. Even in the 15 year period interest rates on our bonds in today's market, assuming they are the:same several months from now when we go into the market, would be at least 8%. If you run it on longer than that, then obviously interest rates are going up and I have seen some up at 20 years that are now at 9% or more. There is not much demand in long term bonds now and so the emphasis these last few months, in fact for the greater part of this last year, has been for 15 years or less. So at least for tonight's meeting that would be my recommendation, that at the time of the bond issue, conditions being the same, that we would have a 15 year amortization for the assessments. Assuming that the project is completed this year, so that an assessment hearing could be held this fall, the first assessments would then appear along with the 1982 tax collections. If it wasn't done this year and we have to have the assessments in 1982, for collection in 1983, then the first one could start in 1983, for 15 years beyond that point. Under the new law that was enacted by the last legislative session, the interest rate on assessments, for those who deter- mine to let their assessments go along with their real estate taxes, that interest rate can be that amount provided by the Local Improvement Code or 1% more than what. we receive on'our bonds. That, of course, is a determination that the Council would make prior to the assessment hearing because then the project would be done and the financing would be accomplished. The 1% override, assuming 8%, would then be a 9% carrying charge, using that as the example, on the unpaid balance of any assess- ments that were not prepaid in full. Under our procedure here, we have a second hearing, tonight is the feasibility hearing as to the project itself, whether to go with 46 feet or 36 feet or even abandon it for that matter, but then we have a second hearing where they actually come in and challenge a particular assessment. Then assuming that that period has gone by, there is a 30 day period to pay in full without any interest penalty and then the assessments are spread with real estate taxes and then people can prepay thereafter by paying interest to the end of the year in which they make the payment. Assuming an assess- ment hearing in 1981, in October let's say, they would have 30 days during the month of October that there would be no interest penalty. It is then certified to the County and from that point on they would have to pay interest to the end of 1982. If they decide to let it go until 1982 or 1983 and pay it in 1984, they would then pay interest to the end of 1984 and save the remaining 12 years under a IS-year assessment. Of course, the choice is the individual's. As I pointed out, this is projected at 100% assessments. Obviously at the time of the assessment hearing, if the Council determines that any portion of this should be picked up by general taxes or some other source, that's a determination you make then, not tonight. So the worst possible picture has been given tonight. We don't have to make that anticipatory decision, 4