City Council Minutes 2010 02 02 - Laserfiche WebLink

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City Council Meeting Minutes February 2, 2010 Page 6 of 8 bonds). Tax exempt bonds prohibit a private activity benefiting from the bonds. It was decided to payoff the bonds. Ordinance No. 1565, Series 2010 has nothing to do with the golf course agreement. It was included in the 2009 budget to fund the 2009 golf course deficit. Ordinance No. 1566, Series 2010 authorizes a transfer of $800,000 from the Wastewater Utility Fund to the golf course fund to payoff the bonds. The funds will be placed in escrow account and the bond holders will receive payments from the escrow. It is a legal defeasance, which means it is off the City books and no longer a legal debt of the City's. PUBLIC COMMENT Michael Menaker, 1827 W. Choke Cherry Drive, Louisville, CO stated the golf course problems are apparent. He noted one way out of the current problem is to provide a better product. He stated the two ordinances would transfer 1.170 million dollars to the golf course with repayment in 2024 and 2026 and asked what alternatives are proposed should the golf course fail. He felt the contract was premature and noted it has not been published on the City's Web Site. He felt the defeasance of the bonds should be conditioned with the passage of the ordinances. He asked for clarification relative to the escrow account and asked why the bond holders would not be paid now instead of in 2012. He asked why the payback to the Wastewater Utility Fund will not begin until 2015. He was concerned over 17 years with an uncertain interest rate. He felt the City would be taking a significant risk. He asked if the Water and Wastewater Utility Fund has excess funds available, is the City charging too much for their services. Finance Director Watson explained the bond holders cannot be paid off immediately because there are bond call provisions to protect the bond holders and that is why the escrow account is set up. The bonds would be removed from the City's books and placed with a third party and then paid off per their normal schedule. Councilor Muckle asked for a definition of defeasance. Finance Director Watson explained defeasance is paying off the bonds or removing the legal liability from the City. City Attorney Light explained because there are call protections on the bonds, they cannot pay them off early. The money would be put into an escrow account earmarked for the entirety of the remaining funds to be paid under the normal payment schedule established in 2002. He noted there are three more payments to make. Councilor Muckle inquired how the City will know whether the Water and Wastewater Utility Fund dollars will be needed in the future. City Manager Fleming stated one of the matters to be addressed is whether the funds should come from the Water & Wastewater Utility Fund, the General Fund or the