HomeMy WebLinkAboutminutes.council.19821103 Special Meet~n~ Aspen City Council November 3, 1982
Mayor Edel called the meeting to order at 12:10 p.m. with Councilmembers Collins, Parry,
Knecht and Michael present.
City Manager Chapman said, given the outcome of the election, the Council needs to decide
the size of the bond issue. The city has to repay a Central Bank note of $1,950,000
which consisted of $1,200,000 of improvements and the open space acquisition of the Oden
property and the lots west of the Wheeler. The election approved issuing sales tax
revenue bonds of $2,500,000 for the Wheeler. Chapman said the city will have to do a
refunding issue to restructure the debt in order to proceed with both issues at one time.
Chapman said Council needs to give an indication of the size of the bond issue they want
to staff and Joe Ba'rrows, the minimum amount being $1,950,000 to repay the bank note.
Chapman has given Council memoranda on open space acquisitions that could close this year,
the Zoline property and the Marolt property. Staff has been discussing purchasing the
Marolt property and is going to get an appraisal so they can proceed with a proposal.
The staff has a proposal from Zoline regarding the acquisition of the Zoline property.
Chapman said he used $2,500,000 as an estimate for open space acquisitions, which is in
the ballpark. The Zoline proposal is a $100,000 payment with the rest of the payments
beginning three years from now.
Mayor Edel said the Council should determine first how much money is needed for the
Wheeler Opera House. Chapman said $2,500,000 should finish the Wheeler plus the $1,950,00(
to repay the note to Central Bank. Chapman said with the favorable bond market, the
staff is recommending going with the open space acquisitions as a possibility. Mayor
Edel asked what happens if the property deals fall through. Joe Barrows told Council they
could sell the bonds and invest; the city can invest on the bond proceeds for a three
year period and to reasonably expect to expend the proceeds during that period. Chapman
said if Council wants to do $2,500,000 open space, $2,500,000 for the Wheeler, the
repayment of the note $1,950,000 this will be almost $7,000,000 in addition to the
$5,200,000 refunding issue for a total bond issue of $12,200,000. These are all revenue
bond issues.
Chapman presented a chart showing the land fund for fifteen years, spending $3,700,000
on the Wheeler from the land fund and $3,200,000 on open space acquisitions, and showing
the approximate debt service schedule for this bond issue and for repaying the 1972/1978
sales tax issue. Chapman pointed out that the land fund cannot support this debt all on
its own, assuming a 6 per cent growth rate in the sales tax. The city will have to count
on some real estate transfer tax funds to support the renovation of the Wheeler. The
years 1984, 1985, and 1986 will have very slim margins. This plan has consolidated all
the debt payments. Councilman Knecht asked what happens if the revenue projections are
not right and the sales tax and real estate transfer tax cannot cover the debt. Chapman
said the fourth and fifth pennies would be obligated to pay for it. Councilman Knecht
said he is all for getting open space, but this program is scary.
Joe Barrows told Council this is a better time to go to the bond market than in the last
eighteen months. Interest rates are still high, but they are better than they have been
in a long time. Councilman Collins said there is a commitment to the open space acquisiti(
and he would like to go with the whole program. Councilman Parry agreed. Councilwoman
Michael agreed, but shares Knecht's nervousness. Councilwoman Michael said the scenario
has too many moving parts and not as much margin for safety as she would like. Council-
woman Michael said the Zoline and Marolt properties are too valuable to pass up at this
point.
Chapman told Council the debt in the seventh penny was part of the 1972 and 1978 sales
tax refunding bond. The debt currently is pledging the revenues of the fourth, fifth,
sixth and seventh pennies towards the repayment of the transportation items. This has
to be separated. Barrows said when the city issued the 1978 bonds for the golf course
and refunding for savings purposes, all the sales tax was pledged for repayment of those
bonds. Barrows said if the city goes to market with a new sales tax issue, there is a
requirement in the bond ordinance if the city issues additional bonds, if they have the
.same lien on the sales tax revenues, it will have to be structured so that all four
pennies be pledged to that issue. If the city is looking at consolidation of transporta-
tion with the county and the city will no longer collect the seventh penny, the city is
obliged to continue to collect the seventh penny as long as there are bonds outstanding.
If the city wants the seventh penny out to be dedicated to transportation, it is cheaper
to separate it out now.
Chapman said this plan is to defease the 1978 refunding bond so that the city can clear
out the transportation penny obligations and not pay for open space out of the general
funds. The total amount of the bond issue will be $12,150,000. Barrows said the figures
are based on a BAA scale, not including the cost of insurance. If the city gets insurance
the figures will be better. Chapman said the city got the referendum authorization, and
this will come back in the form of an ordinance. The staff needed Council's sense of
the size of the bond issue.
Barrows said he would prepare a preliminary offering statement, get the bonds rated and/or
insurance, put the refunding numbers together and come back to Council. Chapman
acknowledg~ Kirchner/Moore for all their help in this.
Councilman Knecht moved to adjourn at 1:15 p.m.; seconded by Councilwoman Michael. All
in favor, motion carried.
Kathryn~ Koch, City Clerk