Urban County Council Special Meeting

Summary

Meeting Overview

The Urban County Council met on September 16, 2014, at 3:00 p.m. in the Council Chambers at Lexington-Fayette Urban County Government, located at 200 E. Main St, Lexington, KY 40507. Mayor Gray presided over the meeting.

The council addressed one agenda item during the session: a discussion of issues related to CentrePointe Project Bonding, which was approved. The council took five motions and votes during the meeting and heard seven public comments from members of the community.

Attendance

The following individuals were present at the meeting on September 16, 2014:

• Mossotti
• Myers
• Scutchfield
• Stinnett
• Akers
• Beard
• Clarke
• Ellinger
• Farmer
• Ford
• Gorton
• Henson
• Kay
• Lane
• Lawless

No absences or late arrivals were recorded.

Votes and Decisions

Motion to Place Ordinance on Docket 5:43

A motion was made by Lawless and seconded by Farmer to place on the docket an ordinance pertaining to amendments relating to the Phoenix Park/Courthouse Development area and corresponding agreements to facilitate a request to the Kentucky Development Bond Corporation to issue bonds payable from Tax Increment Financing revenue for the parking structure at the CentrePointe Project. The motion passed by voice vote.

Motion to Place Resolution on Docket 36:08

A motion was made by Lawless and seconded by Farmer to place on the docket a resolution approving an interlocal cooperation agreement between the Lexington-Fayette Urban County Government and other parties regarding the Kentucky Bond Development Corporation and authorizing such corporation to issue bonds payable from TIF revenue to pay costs of the parking structure at the CentrePointe Project. The motion passed by voice vote.

Ordinance 0130-26 39:48

Ordinance 0130-26 was voted on by roll call, with a motion by Farmer and second by Beard. The ordinance amended the Phoenix Park/Courthouse Development Area boundary to eliminate overlap with the 21c Hotel Development Area; approved amended and restated Local Participation and Master Development Agreements; authorized the Department of Finance to apply for an amendment of the Tax Incentive Agreement; and authorized the Mayor and staff to execute related documents. The ordinance passed 15-0.

Voting in favor: Mossotti, Myers, Scutchfield, Stinnett, Akers, Beard, Clarke, Ellinger, Farmer, Ford, Gorton, Henson, Kay, Lane, and Lawless.

Resolution 0073-26 39:48

Resolution 0073-26 was voted on by roll call, with a motion by Gorton and second by Akers. The resolution approved an Interlocal Cooperation Agreement between the Lexington-Fayette Urban County Government and other parties regarding the Kentucky Bond Development Corporation and authorized the corporation to issue bonds payable from TIF revenue to pay costs of the parking structure at the CentrePointe Project. The resolution passed 15-0.

Voting in favor: Mossotti, Myers, Scutchfield, Stinnett, Akers, Beard, Clarke, Ellinger, Farmer, Ford, Gorton, Henson, Kay, Lane, and Lawless.

Motion to Adjourn 40:50

A motion was made by Gorton and seconded by Myers to adjourn the special council meeting. The motion passed by voice vote.

Budget and Financial Actions

The meeting included consideration of a bond financing amendment related to the CentrePointe Project.

Resolution 0073-26: Tax Increment Financing Bonds for Parking Structure

The body considered an amendment regarding bonds payable from Tax Increment Financing (TIF) revenue. These bonds are designated to pay costs associated with the parking structure component of the Phoenix Park/Courthouse (CentrePointe) Project. The bonds are to be issued through Kentucky Bond Development Corporation.

Public Comment

Several speakers addressed the board regarding a project bonding initiative and related financing matters.

Project Support and Urgency

Lawless thanked the administration, the Kentucky League of Cities, and developers for their work on the bonding effort, emphasizing its importance to the community 5:04. Lane expressed appreciation for the Kentucky League of Cities' leadership and highlighted the urgency of the project, noting that construction delays were impacting downtown tenants and users 16:00. Farmer thanked the Kentucky League of Cities and John Steiner for creating a new conduit for bond financing, calling it a leadership opportunity essential to the project's progress 24:17.

Interlocal Agreement and Participation

Myers asked about the second city involved in the interlocal agreement and confirmed that Midway was being approached, with a special meeting scheduled to consider participation 12:13.

Bond Financing Questions

Stinnett inquired about the creditworthiness of the bonds and the process for rating. Roger Peterman confirmed that each project would undergo a separate credit analysis 17:02.

Gorton asked about the underwriter's confidence in selling the bonds. Peterman confirmed the underwriter intended to underwrite rather than place the bonds, indicating strong market confidence 22:36.

Cash Management

Beard asked about the flow of TIF funds, including collection, timing, and management. Peterman explained the process and the role of the Department of Finance and bond trustee 28:40.

Contested Items

Responsibility for Bond Repayment

Council members expressed concerns about the city's potential financial liability in the event of project failure. The central question was whether the city would bear responsibility for repaying bonds if the project did not generate sufficient revenue.

Bond counsel clarified the city's position, explaining that the city would not be liable for bond repayment. Repayment would be secured exclusively through pledged Tax Increment Financing (TIF) revenues, and the bonds were structured as non-general obligation instruments. This distinction meant that the bonds would not draw on the city's general fund or other city resources if TIF revenues proved insufficient.

The matter resulted in a split vote among council members, indicating that despite the bond counsel's clarification, some members remained concerned about or opposed to the financing structure.

Discussion of Issues Related to CentrePointe Project Bonding

5:04

The council discussed a proposed interlocal agreement with the Kentucky League of Cities to establish the Kentucky Bond Development Corporation. This entity would enable the issuance of tax-exempt bonds using Tax Increment Financing (TIF) revenue to finance the CentrePointe parking structure.

Key Topics Addressed

The discussion covered several aspects of the bond program structure:

• The mechanics of establishing the Kentucky Bond Development Corporation through the interlocal agreement
• The role of Midway as a participating city in the bond program
• The credit analysis process for evaluating the bond issuance
• How revenue would flow through the program to support the project
• Considerations regarding investor confidence in the bond offering

Speakers

The discussion involved council members Lawless, Juett, Peterman, Farris, and Parsons, who examined the proposal and its implications for the CentrePointe project financing.

Outcome

The council approved the discussion item, moving forward with the proposed interlocal agreement and bond development framework for the CentrePointe parking structure project.