07-22-1991 Council Minutes - Laserfiche WebLink

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ORONO CITY COUNCIL MEETING HELD JULY 22, 1991 HRA PUBLIC HEARING CONTINUED Bernhardson replied`, "The_.City is looking at this, among other things, as an option that the City could, if it wanted to establish, choose to undertake .a purchase agreement in accordance with the City facilities, to take care of dilapidated buildings in this area, and.hopefully improve the existing.site by removing the City buildings, and creating new buildings that are habitable." Ms. Jentilucci asked if establishing an HRA had anything to do with the construction of public housing. Bernhardson stated that there is no requirement that this property must be developed with public housing facilities. It could remain as a park, once the existing buildings are demolished, or sold to private developers. Ms. Jentilucci indicated that she would like to see the Post Office remain in its present location. Norm Paurus, 2500 Casco Point Road, stated that the City has the legal ability to set up an HRA, but believed that the issue of setting up an HRA is different than funding an HRA. He said, "It is my understanding that if a city sets up an HRA, and it is funded out of taxes of any kind, that a referendum is required. I may be wrong." Bernhardson stated that he and the City Attorney had researched that issue with the City's Bond Consultant, and are not aware of such a requirement. He said, . "Generally, the Housing and Redevelopment Authority have not had to go with a referendum, and a lease /purchase does not require a referendum. If the City were to do a lease /purchase, it is deemed as bonds from another governmental unit. Secondly, HRA's, offer ways of doing Tax Increment Financing projects, where the increased value of the property generates additional tax increment and' that is used to pay off the bonds. That also requires no referendum. The use of General Obligation bonds, which would be backed by the City, with no other funding source other than taxes, may have required a referendum." Paurus said, "The bonds would be General Obligation because there is no other source of income other than taxes." Carolyn Drude, Ehlers and Associates, Inc., financial consultant to the City, explained, "If the City. establishes an HRA, and the HRA issues a lease revenue bond, it.is payable from annual appropriations by the City, which could be taxes, or could be other kinds of appropriations. The bonds are not General Obligations." Paurus asked, "Since the revenues are to pay for a new City - 2 -