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<br /> '" ~ <br /> 1998 General Obligation (G.O.) Bond Issuance Page 2 <br /> . <br /> Please note that an estimated $250,000 in developer incurred soil correction costs are not <br /> included in the public improvement cost, totals above nor are bond proceeds expected to be used <br /> for this purpose. <br /> TIF Revenue Assuml'ltions <br /> Staft- has put together various revenue assumptions in support of the debt service requirements; <br /> including: <br /> 1. A $30.50 market value per square foot for phases II-IV. <br /> 2. A zero percent inflation rate. <br /> , A property tax class rate of3.5% for commercial property. <br /> ~. <br /> 4. Debt coverage of at least 115%. <br /> These conservative assumptions were utilized not only for debt service coverage needs, but also <br /> in recognition of the fact that the completion of the City's GBD development vision will also <br /> include other future public improvements including significant land acquisition and street/utility <br /> improvements. <br /> Other Consideration Items <br /> 1. Even though the original bond sale was delayed, Standard & Poors (S & P) has indicated . <br /> that the original "A+" credit rating will not have to be re-rated for this issue. <br /> 2. The increase in issue amount from $3,050,000 to $3,100,000 results form additional <br /> information on expected site improvement costs being higher than was earlier estimated. <br /> , The delay in bond issuance has been beneficial from a falling twenty year G.O. Bond <br /> ~. <br /> Index market environment with the rates falling approximately fifty basis points (.50 %). <br /> 4, Recently, the Governor has indicated that he will be supporting further reductions in the <br /> Commercial/Industrial property tax rate to 3.0%. Staff is working with the City's <br /> financial advisors to determine how such a decrease would affect the revenues of this <br /> proj ecl. <br /> Recommendation <br /> StatT recommends that Council approve Resolution #98-09, "Resolution providing for the sale of <br /> $3,100,000 General Obligation Tax Increment Bonds, Series "1998A", at the January 26,1998, <br /> Special Council meeting subject to final execution of the developers agreement and the final <br /> closing of various land acquisitions. <br /> Enclosures: Revised Bond Sale Report dated January 20, 1998, Bond Use Public <br /> Bond Use Estimated Costs Schedule e <br />