CC_Minutes_2011_0912 - Laserfiche WebLink

Home

Regular City Council Meeting Monday, September 12, 2011 Page 20 and notice process to be followed; the City's favorable bond rating; and existing debt service for the previous City Hall campus projects. Councilmember Willmus spoke in support of a fifteen (15) year term versus a twenty(20) year term, as a much better choice for overall debt service, and opined that he would be reluctant to issue for bonds for a term greater than fifteen (15) years. At the request of Councilmember Willmus, Finance Director Miller advised that there was a ten (10) year call feature built in for the existing City Hall campus bond issue; and that those bonds were issued in 2003. At the request of Councilmember Willmus, Mr. Miller advised that he would pro- vide information on the pay off if the previous City Hall bonds were called in; and possible revenue source options to do so. Mayor Roe requested that staff's information include the increased debt service impact and average increase to a typical single-family homeowner for a fifteen (15) year term at the same projected interest rate; specifically in the 2012/2013 budget years. Councilmember Pust asked how the term was determined, and whether it was de- pendent on the market at the time of issue. Mr. Miller advised that staff would work with its bond counsel, and examples of how the market place was responding and showing a preference for terms; and that they would test the market before returning to the City Council with their recommendation on the term. Mr. Miller reminded Councilmembers that it was their ultimate decision; and the longer the bond term was spread out, the less bur- den it had on the community; however, he cautioned about extending the bond is- sues beyond the useful life of a building; and suggested that, from a financial strategy perspective, such a scenario be avoided. Park Bond Projection (Attachment B) Finance Director Miller noted that it had yet to be determined how best to struc- ture this bond issue: whether $19 million all at once, or through a phrased process; and anticipated that staff and the City's bond counsel would have a rec- ommendation to the City Council in the next few weeks. Councilmember Willmus noted, as an illustration of his previous point, the cost savings of$2.5 for a fifteen (15) year versus a twenty(20) year issue. Mr. Miller concurred, noting that there would be less cost for interest over the life of the bond for a shorter term. Mr. Miller advised that this information was avail- able on the City's website, as well as at City Hall.