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lUReTo Board of Urn mty Commissioners Date
COLORADO From Bond Revenue Committee
subject: Revenue Bond Proposal from Coughlin and Company
Our committee has reviewed the proposal submitted by Coughlin
and Company and the following are some of our concerns:
1. We did not find a lot of major problems with the proposal but
are concerned with the large percentage of administrative fees
the firm would receive for its service and the.armunt Of control
the firm would have over the bonds. They would decide how
much to put on the market at one time which could lead to a
liability for the county should the sale be too large and all
bond proceeds are not distributed within a year.
2. Our major concern is not with this proposal, but with the
general concept of revenue bonding for low interest hie loans.
In general, this type of proposal concerns the sale of
revenue bonds to be used in providing low interest hone loans
for low and moderate income families. One the surface, it
appears to be a laudable endeavor for the county, but there
are some drawbacks.
We have received a proliferation of proposals of this type
since the original one from Coughlin and Company, however,
there has been no real need demonstrated for this type of low
interest monies except as expounded by the bonding companies.
It must be remembered that these bonding companies are in
business to make money and not just to serve the citizens of
Weld County. There has boon no recorded concern expressed
by the public interest groups for this type of monies.
Two other entities in the State do provide low interest monies
for home loans and do operate in Weld County, the Colorado
Housing Finance Authority and the Farmers' Buie Administration.
There are also legal, financial and liability concerns with this
type of proposal. If we, as a county, did get into this type
of bonding, the following may occur: an increase in expenses,
staffing, and legal ramifications,plus more exposure as far
as financial liability. There are several governmental units
t.,, looking at this type of bonding action, namely, the Internal
' Revenue Service and the Security &change Cannission.
780531
Page 2
Mgrs on Coughlin & Company Revenue
Bond Proposal
For the reasons stated above, the committee believes that the
Board of County Commissioners should look very carefully at the
entire concept of this type of bonding mechanism. You have
recently established a Weld County Housing Authority which
should be a good "sounding board" for the housing needs of
Weld County. The Housing Authority will be conducting a housing
study of Weld County within the next six to eight months and
we suggest the Board not entertain any.smre_ proposals.of this
kind until that study is completed. If at that time a need
for low interest housing money is demonstrated, the Board can
then proceed in determining whether Weld County should get
into this type of bonded indebtedness. With the tight budgeting
constraints now occurring in Weld County, we feel this is the
best approach to this concept.
Mike kOstalet, County Treasurer
T David, County Attorney
�1 e�`0i� 1
Gary Fortn r, Planning & Zoning
Director
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UI I ILL Of FINANCE.
PHnnil ('303) 31,6 4000 EXT.218
P.O IlOX 750
IalEELEY,COLORADO 80631
111k•
COLORADO
November 21 , 1973
Mr. George F. Thompson, Jr.
Coughlin and Company
1200 First National Bank Building
Denver, Colorado
Dear Mr. Thompson:
We are in receipt of your November 14, 1978 letter requesting a work session
with the Commissioners and others to clarify your bond proposal and what
you believe are misconceptions surrounding it. Although there may be a '
need for some clarification on specific details of your proposal , we do
feel confident that the staff and the Board have an understanding of the
concept of housing development revenue bonds. I am sure you can appreciate
the fact that a brief memorandum and newspaper article do not represent
our total understanding on the subject as complex as housing development
revenue bonds.
The Board feels strongly that we have a responsibility to insure our future
financing abilities by issuing bonds only where there is a genuine need and
at the same time keeping interest and bond costs at a minimum. In order to
meet that responsibility, we have referred the matter to the Weld County
Housing Authority to determine if a genuine need exists for this type of
bond issuance. To date the people in Weld County who would ultimately
secure home loans via this mechanism have not articulated a need to this
Board or the Housing Authority. In absence of this articulated need, we
do feel an obligation to study the situation ourselves and reach our inde-
pendent conclusions as to whether or not the need exists. Specifically
we want to know how great of need exists , at what income levels do the needs
exist, and where in the County do the needs exist. If the needs , for example, `
exist in the small rural communities then perhaps FmHA is the appropriate
agency, or if the need is in the City of Greeley then perhaps the city should
issue the bonds. These are some of the reasons why we feel we need to have
the Housing Authority study the matter in depth.
If a need does exist, then the next step would be to determine the most
appropriate way to satisfy the need. At that time we would want to solicit
input from firms like yourself, independent municipal bond consultants , and
other agencies and individuals in the community that would serve as a resource
in enabling the Board to make the best decision for the citizen's of Weld
County concerning housing development revenue bonds.
Mr. George I . Iliompso9— Jr.
Coughlin & Co.
Page two
The position of the Board at this time is that until the Weld County Housing
Authority completes its studies , we will not be entertaining any proposals
for revenue bonds for low and moderate income housing loans. In fairness
to all other parties that have submitted proposals , we feel it inappropriate
to schedule any work sessions concerning this subject until we receive the
Housing Authority's report. If in fact a genuine need exists that calls
for housing development revenue bonds in Weld County, we would most certainly
want to discuss your proposal with you again, and at that time any miscon-
ception you feel we have can hopefully be clarified.
Ve truly yours, , . �
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/G7UL/ . ''a %:c'�lir_�av ee l
une Steinmark, Chairman pro tem
Board of County Commissioners
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