HomeMy WebLinkAboutA028 - Council Action Form dated February 11, 2014 and March 4, 2014 - refunding bonds and tax levy OLD CAF
ITEM # 19
3-4-14
I 7
DATE: OZM14
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARING AND NOTICE OF INTENT TO ISSUE $10,750,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION BONDS,
$2,500,000 GENERAL OBLIGATION REFUNDING BONDS AND
ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2014/15 budget includes a number of General Obligation (G.O.) 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 G.O. bond issue are included as part of the FY 2014/15 budget.
The G.O. Bonds and debt service levy for the FY 2014/15 budget were based on projects
listed in the table below. Council authorization will be required at a later date to authorize
the actual sale of these bonds. The bonds are expected to be issued shortly after the start
of the new fiscal year. In addition to the G.O. Bonds to fund capital improvement
projects, staff has identified a potential bond refunding that may provide savings in
debt service costs. Though Council will be holding a public hearing and notice of
intent on the sale of those bonds, the refunding sale will not go forward unless
adequate savings are expected.
Please note that, in addition to the amount to fund the $9,840,000 in G.O. Bond funded
capital projects, the not-to-exceed amount for the issuance includes $910,000 additional
authorization to allow for issuance costs and the option to sell our bonds at a premium over
the par amount. In any case, debt will not be issued in an amount where debt service
exceeds the property tax levy included in the proposed budget.
The Capital Improvements Plan's 2014/15 G.O. Bond issue and planned refunding will
include the following projects:
Resource Recovery Improvements $ 300,000
Grant Avenue Paving Assessments 2,175,250
Debt to be Abated by Other Revenues $ 2,475,250
Grant Avenue Paving 649,750
Collector Street Pavement Improvements 1,205,000
CyRide Route Pavement Improvements 525,000
Downtown Street Improvements 900,000
Concrete pavement Improvements 1,655,000
Asphalt/Seal Coat Street Rehabilitation 1,250,000
Arterial Street Pavement Improvements 700,000
Flood Mitigation 300,000
Bridge Rehabilitation Program 180,000
FY 14/15 CIP Tax Supported G.O. Debt 7,364,750
Refunding Bonds 2,500,000
Issuance Costs and Allowance for Premium 910,000
Grand Total—2014/15 G.O. Issue $13,250,000
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ALTERNATIVES:
1. Adopt a pre-levy resolution authorizing the issuance of Essential Corporate Purpose
General Obligation and General Obligation Refunding Bonds in an amount not to
exceed $13,250,000 and the debt service property tax levy to pay principal and interest
on the bonds and set the date of public hearing for March 4, 2014.
2. Reject the pre-levy resolution authorizing the issuance of Essential Corporate Purpose
General Obligation Bonds, reduce the 2014/15 property tax levy, and delay the capital
projects. Delaying the Essential Corporate Purpose Bonds may prevent the City from
completing the bond funded projects reflected in the 2014/15 CIP.
MANAGER'S RECOMMENDED ACTION:
Prior to the issuance of this debt, state law requires that this pre-levy resolution be adopted.
This is a required step in order to accomplish the Council's approved capital improvements
for the upcoming fiscal year.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative No. 1, thereby adopting a pre-levy resolution authorizing the issuance of
Essential Corporate Purpose General Obligation and General Obligation Refunding Bonds
in an amount not to exceed $13,250,000 and the debt service property tax levy to pay
principal and interest on the bonds and set the date of public hearing for March 4, 2014.
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