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INDUCEMENT RESOLUTION #19 - <br />EQUISEARCH - PUBLIC HEARING <br />Rautenstraus read in its entirety Resolution #19, <br />Series 1986, "A Resolution Agreeing to Issue <br />Revenue Bonds to Finance Residential Housing <br />Facilities for Low-a.nd Middle-Income Families and <br />Persons." Rautenstraus established proof of <br />publication of the Public Hearing. <br />Mayor Fauson opened the Public Hearing. <br />Wanush explained that this Inducement Resolution <br />for Housing Bonds is similar to Industrial <br />Development Bonds in that the City serves as a <br />conduit for Special Revenue (Housing Note) <br />issuance but assumes no liability for repayment. <br />The issuance does not affect the credit status of <br />the City's allocation for future municipal <br />offerings. <br />In this program, the City will induce the issuance <br />of a 3 year Special Revenue Note to provide <br />construction funds f'or the Ponderosa Pines <br />Subdivision at "below market" municipal rates. <br />During construction, these funds will be placed in <br />an interest bearing account where the difference <br />between the Note rage and the market interest <br />(arbitrage) will build a cash reserve which will <br />go towards a down payment for the prospective <br />purchaser and a payment to the Housing Authority. <br />Because of the newnE~ss of this type of instrument <br />and similarity to the IDB, the staff requested the <br />applicant stipulate benefits to the City. These <br />are: 1) The developer can not use the arbitrage <br />portion of these funds to increase profit; 2) The <br />arbitrage must have some City-wide or public <br />benefit. In this case, the developer will make a <br />portion of the arbitrage available to prospective <br />buyers and a portion available to the Housing <br />Authority use for it:s purposes; 3) Approximately <br />40$ of the 62 homes in the project will be <br />designated for moderate income families (incomes <br />between $30,000 and $35,000); 4) The applicant <br />will develop an affirmative marketing strategy to <br />insure buyers within this range and to make the <br />program widely knowr.~ within Louisville. <br />Dennis Wigert, Robert Fuller Associates, Inc., <br />1009 Grant St., Denver, CO, explained that he is <br />Special Consultant t:o the Joint Venture and is a <br />planning consultant and land broker. <br />4 <br />