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was, by a unanimous vote, recommending that the new Town Hall project be postponed until the general economy improves and the State's fiscal conditions stabilizes. Stark . explained that the State's fiscal crisis puts local revenues, such as motor vehicle license fees, property taxes, and possibly sales tax at risk and could jeopardize funding for current operating and capital expenditures. She reviewed the potential fiscal impact to the Town. Stark noted that if the City Council chose to proceed with the project, five of the seven members voted to recommend funding from Town reserves. Two of the seven members voted for complete or partial funding from the issuance of Certificates of Participation (COPS). Council discussed financing options and the advantages and disadvantages of borrowing the full cost of the project. It was noted that the cost analysis in the Committee's report represented borrowing the full amount of the project cost. Stark noted that financing costs for issuance of COPs were about the same for 2.5 million or 4 million and it would most likely be more difficult to find a lender that would be willing to lend the smaller amount. Mayor Pro Tem O'Malley explained for Council the reserve fund options that would be available if cash reserves were used to fund the Town Hall project, including: the street capital improvement funds that have not been appropriated; emergency reserves; and contingency reserves. • Frank Lloyd, Finance and Investment Committee Vice Chair, reviewed the spreadsheets attached to the report with Council. Craig Jones, Finance and Investment Committee member, addressed Council. He explained that his opinion differs from the majority opinion of the Committee on the financing of the new Town Hall. Jones believes that the Town's finances are in "good shape" and that the revenue reserves are adequate. He explained his reasons for supporting partial financing of the project with the remainder being financed from the Town's reserves. Jones reiterated the Committee's recommendation stated in the report that if the Council decided.to.move forward with the project, they should consider the adoption of a comprehensive budget process that could help to eliminate the "piecemeal" deficit spending that is occurring at this time. Mayor Pro Tem O'Malley requested an opinion from the City Attorney on the use of enterprise funds, not as a financing vehicle, but for emergency spending. Mattas will review the options that would be available to Council and report back. Mayor Cheng explained that she would like to entertain a motion on moving forward or postponing the Town Hall project and continue the financing discussion to another meeting. Councilmember Kerr noted that there were several factors that make this an opportune time for this municipal project, including: the favorable costs of construction, the near • completion of the building plans and the very evident need for a new facility. 3 City Council Meeting Minutes January 15,2004