Laserfiche WebLink
Wayne Nielsen anticipates marketing these bonds as <br />AA or AAA rated bonds and will be surety enhanced. <br />The City is not accepting any credit risks neither <br />directly nor indirectly. These bonds will be <br />placed privately to sophisticated investors. They <br />do not intend to market these bonds until there is <br />some resolution to douse Bill 3838, a tax reform <br />bill that affects tax exemption on bond issues as <br />well as many other ramifications. Final bond <br />resolution will not be brought back to Council <br />until there is a resolution of HB 3838. <br />Mohr asked as to the history of other such <br />projects in the East.. Bill Smith explained that <br />this type of project: was used previously as a means <br />of revitalization acid has "an excellent track <br />record and background." However, none of the <br />entities involved in. this project have been <br />involved in any way in other such projects. <br />Bill Smith stated that the $12,000,000 figure used <br />in the resolution was arrived at by multiply the <br />number of homes in i~he subdivision by $140,000 <br />(the estimated average cost) adding a 15~ <br />reasonably required reserve to pay bond interest <br />and including the cost of making bond issue. This <br />equals approximately $11,000,000 and another <br />$1,000,000 to include a potential project for the <br />City of Louisville. <br />Any developer able t.o put up a letter of credit to <br />guarantee the bond holders would be qualified to <br />arrange this same type of project, Smith <br />explained. <br />Anderson explained that this affords many people <br />who bought homes at an entry level the ability to <br />make a second step. The City in a sense is a <br />partner in this venture, not financially or <br />liably, but in the sense of success or failure, <br />Anderson stated. He also stated concern over the <br />high $12,000,000 figure. <br />Smith stated that this is a "not to exceed" figure <br />and would have more accurate figures when coming <br />back to Council for bond issue. This is strictly <br />a revenue bond issue: an is not subject to State <br />allocation, according to Matt Dalton. <br />Smith stated that to the degree that the <br />developers can prevent speculators "we will take <br />any reasonable means that we possibly can to <br />prevent the speculator from coming in." <br />6 <br />