HomeMy WebLinkAboutA001 - Council Action Form dated September 10, 2002 ITEM # 13
DATE September 10, 2002
COUNCIL ACTION FORM
SUBJECT: SETTING DATE OF PUBLIC HEARING FOR AUTHORIZATION TO ISSUE
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION BONDS FOR STREET,
STORM SEWER, AND FIRE APPARATUS PROJECTS PER THE CITY CAPITAL
IMPROVEMENT PROGRAM ($5,885,000), GENERAL OBLIGATION REFUNDING
BONDS ($7,825,000), AND ELECTRIC REVENUE REFUNDING BONDS ($7,620,000).
BACKGROUND:
The budget for FY 2002/2003 included General Obligation Bond capital improvement
projects in the amount of $7,615,000. Delays in the Ames Quarry project and a review and
adjustment on other projects have resulted in a lowering of the issuance amount to
$5,885,000. Projects to be funded by this issue include the following:
Fire Apparatus/Equipment 900,000
U.S. 69 Improvements/13th and Grand 50,000
U.S. 69 Improvements/Lincoln Way and Grand 30,000
U.S. 69 Improvements/6th and Grand 180,000
South Duff Area Storm Sewer 510,000
Residential Low Point Drainage/Wilson 100,000
S.E. 5th Street Storm Sewer 120,000
Arterial Street Rehab. (Dayton) 1,276,901
Arterial Street Rehab. (13th St) 420,000
Cy-Ride Route Reconstruction/Clark 600,000
Collector Street Rehabilitation/Sheldon and Knapp 500,000
Arterial Street Rehab/N. Dakota Reconstruction 485,000
State Street Widening 100,000
6th Street Recon./Streetscape 150,000
Bridge Rehabilitation/Lincoln Way Over Squaw Creek 400,000
Issuance Cost 63,099
Total $5,885,000
The reduction in the issue amount and lower interest rates will result in a reduction in debt
service cost of approximately $240,000 for FY 02/03. This savings will be used to reduce
the debt service levy in future years.
Interest rates have fallen over the past several weeks and refunding of three of our
outstanding bond issues has now become favorable. The G.O. Bond Series 1994B,
1995A, and 1995B can now be refunded with an estimated net present value savings of
over 4.00%. The refunding will result in debt service savings of approximately $40,000 per
year from FY 02/03 through FY 08/09. The Series 1993 Electric Revenue Bonds can also
be refunded at a net present value savings of over 4.00%. We have structured the debt
service on the refunding bonds to shorten the term of the bond issue. This results in
approximately the same debt service cost to the Electric Fund for fiscal years 2002/2003
through 2006/2007 and a savings of approximately $500,000 in FY 2007/2008 when
compared to the current debt service cost.
ALTERNATIVES:
1. Establish September 24, 2002 as the date to take action to authorize the issuance of
Essential Corporate General Obligation bonds not to exceed $5,885,000, General
Obligation Refunding bonds not to exceed $7,825,000, and Electric Revenue Refunding
Bonds not to exceed $7,620,000.
2. Delay the hearing on the issuance of General Obligation bonds.
MANAGER'S RECOMMENDED ACTION:
It is the recommendation of the City Manager that the City Council adopt Alternative #1,
passing a resolution establishing September 24, 2002 as the date to take action to
authorize the issuance of Essential Corporate General Obligation bonds not to exceed
$5,885,000, General Obligation Refunding bonds not to exceed $7,825,000, and Electric
Revenue Refunding Bonds not to exceed $7,620,000.
COUNCIL ACTION: