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MINUTES OF THE FINANCE COMMITTEE January 23, 2023 AUDITORIUM Present: Councilmembers Shachner(Chair), Bullock & Kepple Others Present: Councilmembers Marx, Rader &Baker; Finance Director Rancatore, Assistant Finance Director Schuster, Law Director Vargo, Planning Director Leininger, Assistant Planning Director David Baas, Jeff Rink of Key Bank and Catherine Swartz of Bricker& Eckler Call to Order: 7:13 p.m. Approval of the minutes of the December 19,2022 meeting of the Finance Committee. A motion was made and seconded to approve the minutes of the Finance Committee meeting held December 19, 2022. All members voted in favor. Motion passed. Minutes approved. Debt Legislation Discussion Mr. Rink from Key Bank introduced himself and his colleague Catherine Swartz and explained their role in the process of the city issuing debt. Mr. Rink remarked on the city's past practices of issuing debt. The city typically borrows short- term notes on an annual basis to fund capital projects. Mr. Rink explained that the City of Lakewood is well positioned to do so because it uses enterprise funds, or funds dedicated by statute or charter. It does not use its General Fund to finance capital projects. Mr. Rink directed the committee to his presentation which summarizes all of the city's current outstanding debt going back to 2012. The 2012 debt is scheduled to be paid off in December 2023. The city's current note issue coming due in March will be refinanced with the proposed new note for the purposes of retiring the note coming due and adding new projects to it. Mr. Rink reminded the committee of the costs to take out debt and refinance. He explained that the city has historically taken out short-term notes and then refinanced those notes into longer- term bonds every three to four years. When doing so, the city looks for opportunities to save money and consolidate debts. He anticipated that the city's next bond issue may be considered next year, and no later than 2025. Mr. Rink clarified that while there is one note issue, there are several ordinances which represent separate capital projects. The amount to be financed and sold is $37,695,000, including $16,410,000 in new debt. The debt will be secured through general obligation and the city's ability to levy property taxes. Mr. Rink and Ms. Swartz discussed the pros and cons of securing the debt with general obligation verses income tax. In this case, the debt will be secured with general obligation. Mr. Rink and Ms. Swartz provided the rationale for that decision, explaining that the city's debt limit has significantly increased based on the most recent property valuations. I