HomeMy WebLinkAboutA005 - Old Council Action form dated February 10, 2015 }
OLD CAF
21
ITEM # 7
DATE: 02- 5
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARING AND NOTICE OF INTENT TO ISSUE $15,000,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION
BONDS, $5,950,000 GENERAL OBLIGATION REFUNDING BONDS
AND ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2015/16 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
2015/16 budget.
The G.O. Bonds and debt service levy for the FY 2015/16 budget were based on
projects listed in the table below. Council authorization will be required at a later date to
authorize the sale of the FY 2015/16 General Obligation Bonds. 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 for
bonds issued in 2006 and 2007 that may provide savings in debt service costs. Though
Council will be holding a public hearing and notice of intent on the sale of bonds,
the refunding sale will not go forward unless adequate savings are expected.
Planned final maturity for the new bonds is 12 years, with the exception of the abated
Airport Terminal bonds of$943,000, which will be for 20 years.
Please note that in addition to the amount to fund the $13,892,990 in G.O. Bond
funded capital projects, the not-to-exceed amount for the issuance includes
$1,107,010 additional authorization to allow for issuance costs and the option to
sell our bonds at a premium over the par or face value of bonds. 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 2015/16 G.O. Bond issue and planned refunding will
include the following projects:
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East Lincoln Way Sewer Extension $ 2,000,000
ISU Research Park Improvements 2,938,990
Airport Terminal 943,000
Debt to be Abated by Other Revenues $ 5,881,990
Flood Mitigation $ 144,000
West Lincoln Way Improvements 450,000
Asphalt Street Improvements 1,300,000
Grand Avenue Extension 280,000
Concrete Pavement Improvements 1,100,000
Arterial Street Pavement Improvements 400,000
Downtown Street Pavement Improvements 800,000
Seal Coat Pavement Improvements 350,000
Bridge Rehabilitation Program 2,320,000
Airport Terminal Building 867,000
Subtotal Tax Supported Bonds $8,011,000
Refunding Bonds 5,950,000
Issuance Cost and Allowance for Premium 1,107,010
Grand Total—2015116 G.O. Issue $20,950,000
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 $20,950,000 and the debt service property tax levy to pay principal and interest
on the bonds and set the date of public hearing for March 3, 2015.
2. Reject the pre-levy resolution authorizing the issuance of Essential Corporate Purpose
General Obligation Bonds, reduce the 2015/16 property tax levy, and delay the capital
projects. Rejection of the Essential Corporate Purpose Bonds will prevent the City from
completing the bond funded projects reflected in the 2015/16 Capital Improvements
Plan.
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 $20,950,000 and the debt service property tax levy to pay
principal and interest on the bonds, and setting the date of public hearing for March 3, 2015.
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