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HomeMy WebLinkAboutSpecial City Council Minutes 09.22.2009 (2)MINUTES OF THE CITY COUNCIL OF LAUREL September 22, 2009 A special meeting of the City Council of the City of Laurel, Montana, was held in the Council Chambers and called to order by Mayor Ken Olson at 5:41 p.m. on September 22, 2009. COUNCIL MEMBERS PRESENT: Emelie Eaton Kate Hart Chuck Rodgers COUNCIL MEMBERS ABSENT: Alex Wilkins OTHER STAFF PRESENT: Mary Embleton Sam Painter Doug Poehls Mark Mace Chuck Dickerson Norm Stamper Kurt Markegard Chad Hanson 1 PUBLIC INPUT: None. SCHEDULED MATTER: • Yellowstone County's proposed bonding capacity through stimulus funding. Mayor Olson asked Mary Embleton to present some background information regarding this issue. Mary stated that, at last week's joint dinner with the County Commissioners, Finance Officer Scott Turner gave a brief explanation of what was offered to the city. She was confused by his presentation and got clarification after the meeting. Mary stated that the information reminded her of a seminar she had attended in June. This is part of the ARRA, American Recovery and Reinvestment Act, and tax credit bonds and other new financing opportunities for public and private projects. Mary stated that copies of the information from the seminar were available if requested. Mary stated that a brief overview is that it is really complicated and there are a lot of steps to do with it. The city received an e-mail from the Department of Administration on September 2nd about this. Part of the process would be to choose which types of bonds the city would like to support. The bottom line is that Yellowstone County is offering debt capacity, which the city already has some debt capacity that it does not utilize presently. Debt capacity means repayment of debt. Mary's question to Scott the following day via e-mail was how the city would pay it back. She did not receive a response. From what she can gather, the city would have to issue bonds, which would be sold as a special type of bonds and a recovery zone would have to be declared. A shovel-ready project is what they are looking at, and she does not see where it is applicable here. Mary stated that not much time was given. If the County does not use its full bonding capacity or get someone else to utilize it for them, it reverts back to the State so they can give it to some other county. This bonding capacity was only given to the counties and the City of Billings, not cities and towns except through a county. If the entity does not designate their project or what they were going to bond and have their plan to the state by October 1St, they lost it. Mary stated that was a brief overview, but there is a lot more to it. She offered to answer any questions or find out the answers to questions. Council Member Poehls stated that the issue is debt service. Essentially, the city's debt load would increase and the city would have to service that debt at some point. He is not sure he wants the city to go more into debt, especially for a project that is not really needed. He questioned if the city wants the debt service and if there is an immediate need. He could not think of a project that is shovel ready for which the city needs to go into debt and has not already been addressed. Council Member Dickerson asked if the bonding could have been used for the fire hall. Mary stated that it could have worked if the city had a better understanding of it. She stated that she does not know a lot about bonding, but she knows that it takes time, costs money, and an expert like Dorsey & Whitney or D.A. Davidson usually has to be involved. From what she could gather, the city would still have to issue only the bonds it is already authorized to issue. That includes municipal bonds in the form of general obligation bonds and revenue bonds for water and sewer. The city already has the water and sewer projects bonded and borrowed and debt serviced or is in the process of doing so. The voters did not want to issue debt the last time for the fire hall, but another ,I?-- Council Minutes of September 22, 2009 ballot issue would require at least 75 days. There was no time to try to plan or do anything with this. Mary stated that there are additional stipulations whenever a federal program is tagged to a project. Declaring a recovery zone would have been an additional step. At this point in time, Mary is not sure how beneficial this would be for the city. Mayor Olson asked the council to come to some conclusion to advise staff how to proceed with this offer from the County Commissioners. He stated that, as of today, staff would be exceedingly active in one particular area to even try to qualify. He does not know if there are enough days to do it, even though he initially thought there might be an opportunity. Upon further investigation, he does not know just how staff could accomplish a lot of it. Council Member Poehls stated that from Scott Turner's presentation, he understood that the project would have to be started in 2010 and he does not think the city has a project that could even start that soon. Council Member Dickerson agreed with Council Member Poehl's previous comment regarding going into debt for a project that is not currently needed or ready. Motion b Council Member Poehls recommending that a letter be sent to Yellowstone County to thank them for the opportunity and to decline the funding opportunity, seconded by Council Member Dickerson. There was no public comment or council discussion. A vote was taken on the motion. All six council members present voted aye. Motion carried 6-0. ADJOURNMENT: Motion by Council Member Dickerson to adjourn the council meeting, seconded by Council Member Poehls. There was no public comment or council discussion. A vote was taken on the motion. All six council members present voted aye. Motion carried 6-0. There being no further business to come before the council at this time, the meeting was adjourned at 5:52 p.m. Cindy Allen, ouncil Secretary Approved by the Mayor and passed by the City Council of the City of Laurel, Montana, this 6t' day of October, 2009. K nneth E. Olson, Jr., Ma Attest: Mary K. mbleton, Clerk-Treasurer 1