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126 considered as the local sales tax cannot be used. Staff, working with Bond Counsel Mary Ippel, 127 have identified three potential options: 128 1. Port Authority General Obligation Bonds 129 2. Economic Development Authority Revenue Bonds 130 3. City Revenue Bonds 131 In 2011, the City, using its port authority powers, issued $27 million in bonds to implement the parks 132 improvement plan and construct a new fire station. The final payment of $2,485,500 for these bonds 133 will be fully paid off in 2028 using 2027 levy funds. As a result, $2,485,500 of existing levy funds 134 will be available to use towards new debt payments for the LPC as part of the 2028 budget. 135 136 Regarding the cost of constructing a new LPC, the current estimate is approximately $12 137 million. As this estimate includes about $6 million for contingencies, soft costs, and inflation, it 138 would be appropriate to have an updated cost estimate for a new LPC prior to issuing debt. 139 140 Ms. Ippel has prepared a memo detailing the differences between each financing option (Attachment 141 3). In brief, here is a summary of each option: 142 143 Port Authority General Obligation (G.O.)Bonds 144 The City of Roseville was granted “port authority” powers as defined under State Statutes under 145 state legislation approved 1987. As a result, the City can utilize their port authority to issue general 146 obligation bonds. These bonds can be issued without the submission of the question of issuing bonds 147 to the electors of the City. There are some procedural steps that need to be taken that are outlined in 148 Ms. Ippel’s memo. The bonds are payable through property taxes collected by the City. The City 149 can reduce the amount of taxes needed to pay the bond by an amount equal to the revenues derived 150 from the project (i.e. from the License and Passport Center). So, with this option, the bond could be 151 paid back by a combination of property taxes and LPC revenue. 152 153 Economic Development Authority (EDA) Revenue Bonds 154 The Roseville EDA could issue revenue bonds to construct the LPC. The City would then lease the 155 new facility from the EDA with the annual lease amount equal to the annual debt payment of the 156 EDA revenue bond. Property taxes can be used for the lease payment. Like the Port Authority G.O. 157 Bond, a combination of property taxes and revenue from the LPC can be put towards the lease to pay 158 back the EDA bond. Any revenue bond will have a higher interest rate than a G.O. Bond. Revenue 159 bonds can be issued without holding a local referendum. 160 161 City Revenue Bonds 162 The City can issue revenue bonds payable solely from the net revenues of the LPC project. As the 163 net revenues of the LPC may not be sufficient to pay the annual debt service of the bond, it is most 164 likely not feasible to issue a city revenue bond. Like the EDA Revenue Bond, a city revenue bond 165 will have a higher interest rate, and can be issued without holding a local referendum. 166 167 Question #4 At this point, does the City Council have a preferred type of financing to construct 168 the new License and Passport Center? 169 170 Based on City Council direction, staff will bring back further discussion regarding the preferred 171 financing of the LPC. 172 Page 4 of 9 Qbhf!8!pg!6: