Laserfiche WebLink
Hundley explained that this Ordinance would <br /> authorise the issuance of up to $1.6 million in <br /> bonds to finance improvements relating to the Via <br /> Appia construction. This is a critical project <br /> inasmuch as it would provide a major link from the <br /> north to the south parts of the City. <br /> Russ Caldwell, the City's financial advisor, and <br /> Blake Jordan, the City's bond counsel, spoke to <br /> Council regarding this Ordinance. <br /> Caldwell stated that in order to deliver the bonds <br /> to the bond purchasers and proceed on time with <br /> the project, it is his recommendation that second <br /> Reading and Public Hearing be set for April 22, <br /> 1906, at the Special Council Meeting approved <br /> during the consideration of Resolution #20. This <br /> will allow the closing to occur on May 6, 1906. <br /> Caldwell explained that a Special Improvement <br /> District is somewhat different than other <br /> securities issued by the City in that the City has <br /> no responsibility for the repayment of these <br /> bonds. The bonds are repaid by an assessment on <br /> the land and as each lot is sold, the assessment <br /> will be clear so that no property owner comes in <br /> and carries some assessment that they were not <br /> aware of. These bonds are less secure than a <br /> normal revenue bond of the City. These are being <br /> used throughout the state and there will probably <br /> be a proliferation of then due to what is <br /> currently happening with revenue sharing and other <br /> Federal grant and aid with Graham Rudman. <br /> Caldwell stated that there was good acceptance of <br /> these bonds as the entire Kirchner Moore sales <br /> force reviewed the project and were satisfied that <br /> both the market was here and the developer had the <br /> where-with-all to proceed with the project. These <br /> bonds will carry a higher interest rate than other <br /> obligations of the City at 9.416. <br /> Anderson asked if there were a down side to these <br /> bonds should anything happen with McStain. <br /> Caldwell explained that put into this was pre- <br /> funded interest is the amount of $101,000. In <br /> addition to this, anticipated is construction <br /> interest of approximately $54,000 which means that <br /> for the nest two years, anticipating a fairly slow <br /> development schedule, nothing has to be built on <br /> the project. What happens on default should • <br /> foreclosure occur, the land is worth three times <br /> the value of the bonds, $$ million in land vs. <br /> $1.6 million in bonds. <br /> 3 <br />