2016-05-09-minutes-public-works-study-session

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process, it appears that assessments will significantly increase, then all property owners should be notified of the increase. While not a formal requirement, a 10 percent or more increase in the cost should trgger special informational meetings. Once the contractor has been selected and the contract documents executed, interim financing usually is required, by inter -fund loan or formal borrow'.ng (notes and warrants). Sometimes i; may be necessaryto obtain interim financing eariier, such as when. consulting engineers are used to perform preliminary design or facilitate informatiorai meetings, it may also be necessary to obtain interim financing fora special benefit study or right of -way acquisition. For these reasons, many cities will begin the interim financing process once the protestlappeal period has expired. Alternatives for the city to obtain interim financing for the project include internal financing, issuing warrants or issuing notes. There are other alternatives that can be utilized. Provisions for the method of interim financing may be incorporated into the ordinance creating the LID, or may be provided for by separate ordinance. Recommendations for financing alternatives are usually made by the finance department, often with the assistance of an investment banker and/or bond counsel. Factors such as interest cost, term, flexibility and Internal Revenue Service regulations (taxableftaxaxempt) are analyzed as part of the determination. If the city elects to seek outsidefinancing, a financial statement is prepared which describes the project, the cost, the security for repayment and other relevant factors important to a financial institution. Often the statement is prepared by the finance department, but it is sometimes prepared by the LID administrator or investment banker. During the warrant process, once the financial statement has been approved by the city's legal and financial officials, itis sentto the banks. Although the banks may be asked to respond within seven days and make a bid on the interestto be charged to loan the money for interim financing, it is better to allow two to four weeks. An alternative to warrants are bond anticipation notes (BANs), which are actually short-term notes, since all needed funds are obtained at the time the notes are issued, while warrants provide funds as project costs are incurred. Most BAN 9nanciai statements are prepared by the investment banker. BANS are different than warrants. The LID team should meet with an investment banker to discuss and become familiar with the advantages and disadvantages of both methods of financing. As stated earlier, it is both wise and prudent for a city to consult with an investment banker and bond counsel in the formative stages of the LID to assure that financing can be secured for the proposed project, because not all projects can be financed. An investment banker will be able to provide early information concerning interest a nd other costs for interim or long term financing. Financing costs need to be included and considered in the estimated project costs. Interim financing may be obtained through a negotiated sale or a public sale where a call for bids is used. Both methods are used extensively by municipalities in Washington. UD Closeout Process The LID closeout process begins when construction is completed and all the bills and costs are submitted. Atthis time, total projectcosts must be established, including contract administration, 32 Local and Road Improvement Districts Manual for Washington state Skh Edman