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Item No. 4 (continued) Discussion followed concerning the earlier Council committee which had met with potential developers and attempted to determine what the City might be able to offer to attract good development to the City, and it was noted that assessment district financing was considered to be a useful tool for such a purpose. In response to question regarding whether any funds might be available to the City as reimbursement for the increased staff workload in connection with the establishment of the assessment district, Assistant City Attorney Case said that with regard to the engineer's report there is provision for a reasonable amount to be paid to the City. Discussion followed and Mr. Smith commented and replied to questions regarding anticipated staff time to be required; whether any precedent might be set; the value of the district to the community; the lack of any liability to general taxpapers; the benefits to City taxpayers and residents through new construction and jobs; whether the developer could be required to make a substantial contribution to the City in exchange for use of the assessment district financing; and whether there is any real saving to the developer. Phil Assaf, Wilson, Morton, Assaf & McElligott, San Mateo, bond Counsel, said that marketing will be easier if the purchaser can assume the assessment at a low known interest rate and would be able to make a lower down payment. Mr. Assaf commented concerning the difference between the bond rate and the market rate, noting there is a real rate between the two. In response to question, he said that cost for legal work, engineering, etc., may be reimbursed to the City. He stated that the result is that the developer is able to use his "up front" money for building and knows what the interest rate will be. In response to question, he added that with required bond registration, banks usually handle bond payment rather than cities. In further response to question, Mr. Assaf said that no charge may be made in an assessment district as a fee for community facilities, such fees being the kind of item which may be negotiated as subdivision fees earlier in the process. Dan Levin, Lincoln Property Company, Foster City, said that his firm does not expect to save money, but prefers to trade the uncertainty of floating interest rates for the sure thing of a long term fixed rate, although the cost may be more in the long run, stating the rate would be about 12.3 %. Scott Olson, Birr Wilson Co., San Francisco, municipal bond underwriters, added that costs run 15 -25% extra including reserve, so part of the funds will come back. In response to questions, Mr. Levin said that his competition in the area has assessment district financing; that the assessment district interest rate should make leasing move more quickly since rates can be competitive; that faster build -out will be possible making tax revenue available to the City sooner; and that some 3500 -4500 jobs would be created in a variety of businesses. Reg. Min. 2/25/85 Page 4 MINUTE BOOK NO. 45 Page No. 278