HomeMy WebLinkAbout04-03-2000sp SPECIAL CITY COUNCIL MEETING
April 3, 2000 6:15 PM
COUNCIL WORK AREA
GENERAL OBLIGATION BOND FINANCING
MINUTES
I. Introduction
Mayor Charles A. Booth called the special meeting of the Auburn City Council to
order at 6:15 PM in the Council work area located in he Mayor's office.
Councilmembers present included: Fred Poe, Jeanne Barber, Pete Lewis,
Stacey Brothers, Sue Singer, and Trish Borden. Councilmember Rich Wagner
was excused. Staff members present included: Personnel Director Brenda
Heineman, Public Works Director Christine Engler, Water Utility Engineer Lara
McKinnon, Parks and Recreation Director Dick Deal, Finance Director Diane L.
Supler, Finanacial Operations Manager Sherri Crawford, Police Chief Jim Kelly,
Assistant Police Chief Marion Dukes, Fire Chief Bob Johnson, Planning and
Community Development Director Paul Krauss, City Attorney Michael J.
Reynolds, and City Clerk Danielle Daskam.
II. General Obligation Bond Financing
Mayor Booth .introduced Mr. Alan Granberg and Ms. Lindsay Sovde of Seattle-
Northwest Securities Corporation who presented updated information on bond
financing including impacts of Initiative 695, trends based on past bond issues,
and voter attitudes. The information presented is based on Seattle-Northwest
Securities Corporation's tracking of all voted bond issues in the state of
Washington since 1992 and a biennial state-wide study to determine voter
attitudes.
Mr. Granberg presented the Council with a handout entitled "City of Auburn -
Bond Financing Study" dated April 3, 2000. He reviewed the City's debt capacity
for both voted and non-voted debt capacities.
Special City Council Meeting Minutes
April 3, 2000
Page 2
He noted that King County Superior Court Judge Robert Alsdorf found Initiative
695 unconstitutional on March 14, 2000, and the Judge placed an injunction
against the voter approval requirement of the Initiative. Since appeals are
expected before the State Supreme Court, Mr. Granberg recommended the City
not increase any rates, fees, charges or taxes without public approval until after
the Supreme Court has ruled. A Supreme Court decision is expected some time
after the November 2000 general election.
Mr. Granberg presented an overview of Washington bond issues since 1992. He
noted that until 1998, there appeared to be a downward turn toward bond issue
approval. The bond approval ratio increased noticeably in 1998 and 1999,
probably due to the strong economy in the state. Mr. Granberg displayed a
graph illustrating the number of issues not validated by year. He pointed out that
in 1993, 27% of the issues were not validated. In 1999, all bond issues met the
validation requirements. He noted that it is more difficult to validate in the year
following a presidential election year; although the use of ongoing absentee
ballots has made validation easier recently. He then displayed graphs (pages 7
and 10 of the handout) illustrating the optimum election dates to go to the voters
for a bond issue. Statistically, the spring is the best time to go to the voters. Mr.
Granberg also displayed a graph illustrating the percent of issues passed by
purpose. Fire and library issues were popular with the voters while park and
street issues had a very low voter approval rating. Other categories listed
included hospitals, jails, police, schools, water and sewer, and general purpose
items. Mr. Granberg recommended a strategy for putting forward issues for
public vote in February. If the issue is not passed, the Council could then
redesign the proposal and present it to the voters again in May. The City can
present a project for voter approval up to two times during a calendar year.
Mr. Granberg reported on Seattle-Northwest Securities' most recent (September
1999) statewide survey on voter attitudes towards capital projects and bonds.
The survey found that 48% of the voters receive their information through the
newspaper. Newsletters proved to be a valuable source as well. The study also
found that 33% percent of the participants favor all bond measures and 45%
favor most bond measures. Approximately 59% of the voters feel that the state
is generally headed in the right direction.
The survey participants were asked to identify the most important problem of the
following six issues: fighting crime, protecting the environment, improving health
care, controlling growth, keeping taxes from increasing and increasing funding for
education. The number one issue statewide is increasing funding for education
(30%). The second most important issue statewide is keeping taxes from
increasing (23%). In King County, the issue of controlling growth is the third
most important issue, while fighting crime rates third statewide. The issue of
Special City Council Meeting Minutes
April 3, 2000
Page 3
fighting crime is rated the least important issue overall in King County. The study
also determined that statewide 42% agree with the statement that they can't pay
for any additional property taxes regardless of what they're used for, while 52%
disagreed with the statement.
The survey also concluded that 80% of those surveyed would more likely support
a bond issue if matching funds were available. The survey found that
homeowners are more likely to vote for a bond issue if they know that the
property taxes resulting from a bond issue are deductible expenses on their
federal income taxes. Mr. Granberg also pointed out that qualified senior citizens
within the income threshold are exempt from additional property taxes resulting
from a voted bond issue. A survey question regarding whether to renovate or
build new found that the participants were evenly split on the issue when the
construction costs are the same.
The survey also asked whether voters would favor or oppose switching from the
required super-majority to a simple majority for voted bond issues. Statewide
53% favor a simple majority for bonds and 44% oppose the simple majority.
Approximately 47% of those surveyed favored a 20-year bond term, while 42%
preferred a shorter term.
Mr. Granberg closed by recommending that the City utilize newspapers for the
main information source, highlight the tax deductibility of property taxes, inform
the senior citizen population of the tax exemption for qualified seniors, and
advise the voters of any matching funds. He also noted that King County has a
more sympathetic voter base than other counties throughout the state and the
voters appear to prefer a 20-year term bond as opposed to a 1 O-year term bond.
III. Adjournment
There being no further discussion, the meeting adjourned at 7:00 PM.
Approved on the
day of ,2000.
Charles A. Booth, Mayor Danielle Daskam, City Clerk