HomeMy WebLinkAbout10/04/1993 Work Session
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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.
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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
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ATTEST:
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City Recorder
#4241