July 21, 1999
Attendees:
Ted Spence
Phillip Pasteris
Joe Schwertz
Steve Clark
Gus Duenas
Beverly Fromte
Brian Moore
Joyce Patton
Mark Padgett
Paul Owen
Elaine Beauregard
Guest speaker: Pat Clancy
79th Ave rep: Bill Tanner
Investment broker Pat Clancy described possible types of bond financing available to the City.
The most common bond is the general obligation (GO) bond. It is repaid from property taxes e.g., $.50 per $1000 of assessed value. Its advantage is its low interest rate. Its "disadvantage" is that it requires voter approval. The bond proceeds must be spent within three years of issue date. The road bond will most likely use this type of bond.
The revenue bond is the second most common bond. It is repaid from city revenue streams such as taxes on utilities, petrol, and hotel rooms. Its "advantage" is that it does not require voter approval. However, a petition by five-percent of voters can force a revenue bond to a ballot. Its disadvantage is its higher interest rate.
A third type is the assessment bond. This can be used for financing specific projects such as local improvement district (LID) projects. The LID expense is spread over several years, typically ten years. We repay the bond. Pat Clancy said this requires approval by the city council plus 50% of the voters. He may not have known about the situation in Tigard. This bond has a higher interest rate than the revenue bond. Residents closest to the improvement are usually assessed a higher amount than those farther away.
A fourth bond type is the limited tax general obligation (LTGO). It is for small specific projects such as building a city hall. It does not require voter approval.
Task force member Steve Clark said the Road Bond task force members are uninformed about the Parks Bond Task force needs. Would voters approve a Road Bond and a Parks Bond?
Mark Padgett recommend the assessment per $1000 be the same as the current road bond (the one that expired this June) so residents not notice the change. Pat Clancy, the investment broker, recommended an escalating assessment rate to account for growth. The maximum rate must be disclosed within the ballot. Mr. Clancy described "voter arbitrage" the practice of investing and earning interest on unspent bond proceeds. Washington County earned over $24M from this practice.
Gus Duenas said the City should not expect much revenue from the State gas tax.
Duenas distributed a project matrix that showed his ranking of road projects. The next meeting would discuss his project priorities.
Front Page