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I I I Council Meeting Minutes October 14, 1986 Public Hearings, continued Williams asked for affirmation that, when bonds are sold in this type of a situation, that taxpayers are not liable for any default on the part of the developer; Locke stated the developer is responsible for the dollars to repay the bonds. Locke continued there are advantages for the city to use general obligation bonds; the likelihood of having to come to the city for general revenue for any of these project is extremely low. Benke stated one of the reasons for a General Obligation bond, as opposed to a Revenue bond, is that a General Obligation bond would have a slightly lower interest rate, which makes the financing easier. Williams asked that the difference in bonds be clarified at the next meeting (city's obligation, taxpayers' obligation). Schmidt stated an agreement indicates that a certain rate is going to be paid in terms of real estate taxes captured from the project to pay the principal and interest on the bonds; beyond that, Schmidt felt staff needs to outline what additional securi- ties there are (recognizing that with this project the city is not exposed in terms of selling bonds and providing the subsidy or the assistance until the project is actually complete); having a step-by-step outline of how the city is protected with a project such as this in that Development Agreement; and then, in terms of the default, what security there is to protect the taxpayers. With regard to M. Jeppson's concern for the valuation of the project, Benke stated if the project was not completed until April of 1987, its value would not be placed on the tax roles until January of 1988 so one of the terms the developer agreed to is to pay that full increment a year early. Relative to the actions taken last night, M. Jeppson asked for the Planning Commission's basis for approval of the rezoning; Matilla stated the rezoning was based on the Comprehensive Plan's concept for the area, and read relative information from that Plan. M. Jeppson feels the land could only handle one curb cut and questioned the "best use of the land;" Benke felt that question had been discussed in depth in the past. M. Jeppson questioned the trade-off ($.5 million of land for $1.5 million increase in value) and asked if that was consistent with what had previously been done in New Brighton; Locke stated the type of assistance for this project is consistent with the kinds of assistance we have provided for other projects; in terms of number of years of increments collected, this project would be the smallest, in terms of dollars available. Page Seven