HomeMy WebLinkAboutA002 - Council Action form dated February 14, 2017 ITEM # 14
DATE: 02-14-17
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARING AND NOTICE OF INTENT TO ISSUE $8,000,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION
BONDS, AND ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2017/18 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 2017/18 budget.
The G.O. Bonds and debt service levy for the FY 2017/18 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.
Please note that in addition to the amount to fund the $7,521 ,000 in G.O. Bond-funded
capital projects, the not-to-exceed amount for the issuance includes a $479,000
additional authorization to allow for issuance costs and the option to sell our bonds at a
premium over the face value of bonds. This will allow the City to accept the optimum bid
with face value of bonds greater than $7,521,000 needed to accomplish our projects. 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 2017/18 G.O. Bond issue includes the following:
Grand Avenue Extension 4,000,000
South Duff Improvements 276,000
Arterial Street Improvements 620,000
Collector Street Improvements 950,000
Asphalt Street Improvements 850,000
Downtown Street Improvements 250,000
Accessibility Enhancement Program 125,000
W Lincoln Way Intersection Improvements 450,000
Subtotal Tax Supported Bonds $ 7,521,000
Issuance Cost and Allowance for Premium 479,000
Grand Total—2016/17 G.O. Issue $8,000,000
ALTERNATIVES:
1 . Adopt a resolution setting March 7, 2017 as the date for a public hearing to authorize
the issuance of Essential Corporate Purpose General Obligation Bonds in an
amount not to exceed $8,000,000. After the public hearing and approval of the bond
issuance, a property tax pre-levy resolution to pay principal and interest on the
bonds is required.
2. Reject setting March 7, 2017 as the date of public hearing for issuance of Essential
Corporate Purpose General Obligation Bonds, reduce the FY 2017/18 property tax
levy, and delay the associated 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 debt, state law requires that a public hearing be held and that a
pre-levy resolution be adopted for bonds not yet issued to be repaid from the property
tax levy. 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 resolution setting March 7, 2017 as the date for a
public hearing to authorize the issuance of Essential Corporate Purpose General
Obligation Bonds and in an amount not to exceed $8,000,000.
2