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HomeMy WebLinkAbout10/04/1993 Work Session ~ . . . ~ City of Springfield Work Session Council Meeting MINUTES OF THE MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY OCTOBER 4, 1993 The City of Springfield Council met in the Springfield City Hall, Meeting Room 2, 225 N. Fifth Street, Springfield, Oregon, on Monday, October 4, 1993, at 6:10 p.m. ATTENDANCE Present were Mayor Morrisette, Councilors Maine, Shaver, Walters, Burge and Schanz and Beyer (6:15). Also present were Assistant City Manager Gino Grimaldi, City Recorder Eileen Stein and members of staff. 1. Review of the City of Sprinqfield's Assessment Financinq Policies Acting Finance Director Pat Coleman introduced Ginger Starck, Accounting Manager, and Valerie Nardo, Accountant, who work with the assessment financing program. Ms. Coleman provided background on the city's Bancroft program and the city's foreclosure trouble in the 1980's. She discussed the city's assessment policies in place then and reported how they were strengthened, partially due to limitations placed on assessment financing as a result of Ballot Measure 5. Ms. Coleman discussed the city's bond rating, resulting interest savings, and how the city's assessment financing standards were established. Ms. Coleman introduced Pat Clancy of Public Financial Management, Inc. Mr. Clancy explained that Ballot Measure 5 eliminated the ability of the city to use general obligation bonds to supplement city assessment financings. He provided information on how assessment financings had to be restructured and reviewed how the city's current assessment financing policies were developed. He explained the current policies and how they minimize the city's risk. Councilor Shaver commented the city seems to only recover 99% of its costs and asked if the city recovers interest costs on bond payments. Ms. Coleman explained the city recovers foreclosure and property tax costs only. Councilor Shaver suggested property management and interest costs also be looked at for recovery. Ms. Coleman mentioned there was $6.3 million principal debt outstanding. She indicated that an analysis of the total costs of the properties could be prepared and Council agreed that such analysis should be prepared. Property Manager Jim Douglas stated the city would not have been able to break even financially if the interest costs had been analyzed for recovery. He further explained how the city now pays the principle and interest and penalties are forgiven. Councilor Shaver inquired about assessment bond financing limits set each year and asked if they are annual or accumulative. Mr. Clancy replied it is an annual total of $1.3 million. Mr. Clancy explained the city is in a co-equal position of being able for foreclose on properties first. He explained there is some confusion about what position the city is in; counties generally assume the city is behind them in being able to foreclose due to delinquent property taxes. Mr. Douglas explained how cities and counties have negotiated and agreed on a process for foreclosing delinquent properties. . . . City of Springfield Work Session Council Meeting Page two Councilor Shaver asked if staff has looked into improving what we are currently doing to minimize exposure and if the city experiences a similar recession, would property be taken back again. He stated his concern that the city's policies will not provide adequate protection. Mr. Clancy explained how the policies are designed to minimize the city's risk, and yet still allow for the construction of public improvements to occur. Mr. Grimaldi explained a key difference is that improvements are now done for properties which are owner-occupied, rather than vacant. Councilor Burge stated the cost recovered by the city should always be inclusive of any cost carried on a property and not be based on what banks did. He felt the city will lose $6 to $7 million dollars on Bancroft properties. He said there needs to be a better accounting of the total cost of carrying the city's Bancroft lots. He felt that if the city will not be able to recover all costs for carrying Bancroft lots, the city should dump them. Councilor Burge discussed the inventory of raw land and the ability of the metropolitan area to absorb such large scales of undeveloped land. He also asked if developers know the liens are junior liens. Mr. Clancy clarified assessment liens are a priority over bank liens. He commented on other assessment financing policies and discussed risk versus return. Mr. Grimaldi told the Council the city has proposed criteria to evaluate projects that do not meet current policies. Mr. Clancy reviewed the risk components used to evaluate whether to waive assessment financing criteria. He explained the risk components which include, environmental risks, funding risks, completion risk, and project feasibility. Mr. Clancy advised the Council to formally review the check list for evaluating a project and if criteria is not met, to analyze the project as a private investor would. Councilor Shaver suggested additional criteria to be applied when tax credits are given, such as the recent ones the city applied totaling $100,000. Mr. Grimaldi clarified the same criteria were not given to recent projects, but they were evaluated thoroughly. ADJOURNMENT The meeting was adjourned at 7:00 p.m. Minutes Recorder - Shari Higgins Ma~tP ~Jwi ATTEST: 4UvyJJa~ City Recorder #4241