Committee Minutes

MINUTES/FINANCE COMMITTEE
Monday, November 21, 1994 - 7:15 p.m.

Members present: Carpenter, Babinchak, Geller, McCabe.

1. Matter of charter ordinance for the issuance of CVB bonds.
The committee reviewed communication from Wally Dornfeld, Springsted, Inc., relative to the CVB building project, and stating that because the project cost has escalated to $1,200,00 (from $700,000) the 1% lodging tax would not provide adequate coverage to market a pure revenue bond issue; that the possibility of issuing reserve revenue bonds with a pledge of the 2% lodging tax in addition to the 1% tax had been considered, however. Mr. Verlane Endorf of Dorsey & Whitney, bond counsel to the City has reviewed the NDCC 40-57.3-03 and has given the opinion that such a pledge is prohibited. He stated that the solution is for the City to issue its general obligation bonds under a charter ordinance provision with a pledge of the 1% lodging tax as additional security.

The committee also reviewed proposed ordinance draft from Mr. Endorf.

Moved by McCabe and Babinchak that we introduce an ordinance authorizing the issuance of General Obligation Bonds payable from Hotel-Motel Tax proceeds to finance the costs of capital improvements and establishing procedures therefore and repeal ordinance that had been set up to issue reserve revenue bonds.
Motion carried.

Meeting adjourned.

John M. Schmisek/af
City Auditor

Dated: 11/22/94.