HomeMy WebLinkAboutA034 - Council Action Form dated February 22, 2011 a
L
OLD CAF
19 & 20
ITEM # --
DATE: O-6 /11
COUNCIL ACTION FORM p?j
` I
SUBJECT: SETTING DATE OF PUBLIC HEARING AND NOTICE OF INTENT TO ISSUE
$6,640,000 ESSENTIAL CORPORATE PURPOSE GENERAL
OBLIGATION BONDS AND $310,000 GENERAL CORPORATE PURPOSE
GENERAL OBLIGATION BONDS AND ASSOCIATED TAX LEVY FOR
DEBT SERVICE
BACKGROUND:
The budget for FY 2011/12 includes General Obligation (GO) Bond funded capital
improvements. A public hearing is required to authorize issuance of bonds and the levy of
property taxes for debt to be issued. The dollar amounts and corresponding property tax
levy for the planned GO bond issue are included as part of the FY 2011/12 budget.
Though the GO Bonds and debt service levy in the FY 2011/12 budget were based on a
total issuance amount of $6,800,000, Council is asked to authorize $6,950,000 in bonds to
allow for cost adjustments, issuance costs, and bids for bonds at a premium. Bonds will not
be issued in an amount that where debt service will exceed the approved debt service levy.
Council authorization will be required at a later date to authorize the sale of the FY 2011/12
General Obligation Bonds.
Separate resolutions are required for the Essential Corporate Purpose bonds in the amount
of $6,640,000 and General Corporate Purpose bonds in the amount of $310,000. The
General Corporate Purpose Bonds for improvements to City Hall are limited in annual
issuance amount and are subject to a reverse referendum, meaning voters can file a
petition and cause the General Corporate Purpose Bonds to be subject to a bond
referendum of the voters.
ALTERNATIVES:
1. a) Adopt a pre-levy resolution authorizing the issuance of Essential Corporate
Purpose General Obligation Bonds in an amount not to exceed $6,640,000 and the
debt service property tax levy to pay principal and interest on the bonds and set the
date of public hearing for February 22, 2011
b) Adopt a pre-levy resolution authorizing the issuance of General Corporate
Purpose General Obligation Bonds in an amount not to exceed $310,000 and the
debt service property tax levy to pay principal and interest on the bonds and set the
date for public hearing for February 22, 2011. However, the City Council will still
need to approve a pre-levy resolution for the Essential Corporate Purpose Bonds at
the March 1, 2011 certification date.
2. a) Reject the pre-levy resolution authorizing the issuance of Essential Corporate
Purpose General Obligation Bonds, reduce the 2011/12 property tax levy, and delay
the capital projects. However, rejection of the Essential Corporate Purpose Bonds
will prevent the City from completing the many street projects reflected in the CIP for
FY 2011-12.
b) Reject the pre-levy resolution authorizing the issuance of General Corporate
Purpose General Obligation Bonds, reduce the 2011/12 property tax levy, and delay
the capital projects. However, the rejection of the General Corporate Purpose Bonds
will prevent the City from completing the heat pump replacement project as
contemplated in the Capital Improvements Plan.
MANAGER'S RECOMMENDED ACTION:
Issuance of these bonds is necessary in order to accomplish the City's approved capital
improvements for the upcoming fiscal year.
Therefore, it is the City Manager's recommendation that the City Council adopt Alternative
No. 1, thereby adopting a pre-levy resolution authorizing the issuance of Essential
Corporate Purpose General Obligation Bonds in an amount not to exceed $6,640,000 and
the debt service property tax levy to pay principal and interest on the bonds and set the date
of public hearing for February 22, 2011. This recommended action will also adopt a pre-levy
resolution authorizing the issuance of General Corporate Purpose General Obligation
Bonds in an amount not to exceed $310,000 and the debt service property tax levy to pay
principal and interest on the bonds and set the date of public hearing for February 22, 2011.