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<br />e <br /> <br />reference the fact that bonds will be issued for the project nor does it reference the fact <br />that a portion of the principal and interest on the bonds must be paid by tax increment <br />revenues. The reason the amendment does not address these two issues is that the <br />information City staff received from its consultants when preparing for the financing was <br />that an up front cash contribution to write down the bond amount was all that was <br />necessary in order to qualify for the issuance of tax increment bonds. At that time it was <br />understood that the 20 percent debt service pledge would be offset by the cash <br />contribution. However, bond counsel has very recently decided that a cash contribution <br />for construction does not negate the requirement for a pledge of 20 percent of the <br />principal and interest. <br /> <br />In order to meet the 20 percent requirement, the TIF NO.1 and No.3 amendment adopted <br />August 2, 1993, needs to be amended. It is anticipated that the amendment will be <br />distributed to the County and School board by May 13. This would set the public hearing <br />date for June 20 and provide bond proceeds in late July. This would meet the cash flow <br />needs of the library expansion. Duplicate issuance costs would be eliminated by including <br />disclosure on the TIF bond in the Official Statement prepared for the other issues, <br />including a rating request for the TIF bond on the current rating application to Moody's <br />and negotiating with the low bidder on the other issues to also underwrite the library issue. <br />Alternately, the bonds could be sold through private placement to a local bank eliminating <br />the need for a rating, Official Statement, or separate placement. <br /> <br />e <br /> <br />Unfortunately, the change to the TIF bond requirement information received earlier will <br />cause additional work and delay receipt of bond funds. Fortunately it will not affect <br />construction on the expansion. <br /> <br />RECOMMENDATION <br /> <br />The Council is asked to approve the three bond resolutions as presented. <br /> <br />The Council is asked to adopt a motion authorizing an amendment correcting the earlier <br />Library Expansion Amendment to TIF NO.1 and No.3. Finally, the council is asked to <br />set a public hearing for June 20, 1994, on the amendment. <br /> <br />e <br />