HomeMy WebLinkAboutA007 - Council Action Form dated March 1, 2016 22
ITEM #
DATE: 02-09-
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARING AND NOTICE OF INTENT TO ISSUE $9,890,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION
BONDS, $3,335,000 GENERAL OBLIGATION REFUNDING BONDS
AND ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2016/17 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
2016/17 budget.
The G.O. Bonds and debt service levy for the FY 2016/17 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 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, we have identified a potential refunding for bonds issued in 2008
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.
Please note that in addition to the amount to fund the $5,945,000 in G.O. Bond-funded
capital projects, the not-to-exceed amount for the issuance includes a $645,000
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 2016/17 G.O. Bond issue includes the following..
East Industrial Utility Extension $ 3,300,000
Debt Abated by other Revenues $ 3,300,000
Flood Mitigation 500,000
Storm Water Erosion Control 250,000
Asphalt Street Improvements 1,250,000
Grand Avenue Extension 1,300,000
Concrete Pavement Improvements 1,050,000
Arterial Street Pavement Improvements 345,000
Downtown Street Pavement Improvements 375,000
CyRide Route Improvements 525,000
Bridge Rehabilitation Program 350,000
Subtotal Tax Supported Bonds $ 5,945,000
Refunding Bonds 3,335,000
Issuance Cost and Allowance for Premium 645,000
Grand Total—2016/17 G.O. Issue $ 13,225,000
ALTERNATIVES:
1. Adopt a pre-levy resolution authorizing the issuance of Essential Corporate Purpose
General Obligation Bonds and General Obligation Refunding Bonds in an amount
not to exceed $13,225,000 and the debt service property tax levy to pay principal
and interest on the bonds and set the date of public hearing for March 1, 2016.
2. Reject the pre-levy resolution authorizing the issuance of Essential Corporate
Purpose General Obligation Bonds, reduce the FY 2016/17 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 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 $13,225,000 and the debt service property tax levy
to pay principal and interest on the bonds and set the date of public hearing for March 1,
2016.
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