Downtown Development Authority Minutes

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Present: DDA Members: Christopher Johnson, Margene Buckhave, Jim DeHaan, Lynda Heaton, Jim Long, Greg Presley. Others: City Manager Gary Word, DDA Director Lori Ward, Assistant City Manager/Finance Director Nickie Bateson, DPW Director Jim Gallogly, School Board Representative Joan Wadsworth, Recording Secretary Carol Kasprowicz, Matt Jobin of Rich & Associates, Planning Commissioner Marc Russell, and the City’s Financial Advisor Warren Creamer of R. W. Baird.

Absent: Rick Shaffner, Lou LaChance, Dave Larsen (all excused)

The purpose of the meeting was to review construction and financial scenarios regarding the building of deck(s) and/or an expanded parking lot in the downtown area.

Bateson and Creamer reviewed the bond options and stated that, due to the City’s increased bond rating of October 2002, the difference in cost between a general obligation bond rate (GO) and a limited tax obligation bond (LT) is 0.05% or approximately $500 per $1M per year. A general obligation bond, which generates the lowest interest rate, requires a vote of the electorate. A limited tax bond requires a vote of the electorate, only if a petition for referendum is presented by the voters. Tax Increment bonds (TI) would carry the highest interest rate but has no right of referendum by the residents. Creamer recommends the issuance of LT bonds for any proposed parking construction project.

Creamer spoke in depth of the differences between the types of bonds, the costs of a $4M bond issue, and the process involved in issuing the bonds. Questions were asked regarding the fees for bond counsel, bond insurance, and the difference of costs between a $4M and $5M bond issue.

In an attempt to foresee future revenues, a list of proposed projects was created with the projected revenue from each project. From now until the year 2010, TIF revenue is calculated at $25,000 per $1M of assessed value. After the year 2010, TIF revenue will be calculated at $13,000 per $1M in assessed value. The bond community does not factor in any value of proposed projects in calculating the financial worth of the borrowing entity. Therefore, in analyzing the financial feasibility of the various construction options, City Staff did not include the possible revenue from proposed projects.

Jobin reviewed eight options of construction, which included one of four alternatives for construction of a Wing Street deck, and one of two alternatives for the lot behind the Marquis Theatre. Each option listed the total number of parking spaces that would be realized, with the number of new spaces, and the projected cost of construction. Several suggestions and points of discussion involved the specifics of each option, the timing of construction, the impact of projected projects on the bond issue, and the ramifications of an installment purchase obligation. A preference was reached for the option of a Wing Street 3-story deck with basement and surface expansion of the Marquis parking lot. Staff was directed to finalize the bond issuance costs and construction costs of the preferred option. It was suggested an additional DDA meeting be scheduled prior to bringing the material to City Council.

Motion Heaton, seconded by Long to schedule a special meeting for May 5, 2003 at 8 a.m. in City Hall. Motion carried unanimously.

City Staff was complimented on the amount and quality of work performed in generating the information for today’s meeting.

Meeting adjourned 9:40 a.m.

Respectfully submitted,

Carol T. Kasprowicz
Recording Secretary