HomeMy WebLinkAboutA002 - Council Action Form dated February 25, 2020 ITEM # 25d
DATE: 02-25-20
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARING AND NOTICE OF INTENT TO ISSUE $13,865,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION
BONDS, $9,635,000 GENERAL OBLIGATION REFUNDING BONDS
AND ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2020/21 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
2020/21 budget.
The G.O. Bonds and debt service levy for the FY 2020/21 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, staff has identified a potential refunding for bonds issued in 2010, 2011 , and
2012 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 $13,181,900 in G.O. bond-funded
capital projects, the not-to-exceed amount for the issuance includes a $1,018,100
additional authorization to allow for issuance costs and the option to sell 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 public hearing and pre-levy authorization is required at the time of the budget
approval to levy property taxes for the bonds not yet issued. The pre-levy amount is
included as part of the total debt service property tax levy and is $1 ,073,126 of the total
taxes levied for debt service at $10,043,500.
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The Capital Improvements Plan's 2020/21 G.O. Bond issue includes the following:
Fire Apparatus Replacement $ 1,375,000
Cherry Avenue Extension 510,000
Arterial Street Pavement Improvements 900,000
Collector Street Pavement Improvements 1,400,000
Concrete Pavement Improvements 2,300,000
Asphalt Street Pavement Improvements 1,400,000
CyRide Route Pavement Improvements 600,000
Seal Coat Pavement Improvements 750,000
U.S. Highway 69 Improvements 230,000
South Dayton Improvements 700,000
Intelligent Transportation System 141,900
Bridge Rehabilitation Program 375,000
Subtotal Tax Supported Bonds $ 10,681,900
East 13'h Street Sanitary Sewer Extension (TIF Abated) 2,500,000
Subtotal TIF Abated Bonds 2,500,000
Total Bond Funded Projects 13,181,900
Refunding Bonds 9,300,000
Issuance Cost and Allowance for Premium 1,018,100
Grand Total—2020/21 G.O. Issue $23,500,000
ALTERNATIVES:
1. Adopt a resolution authorizing the issuance of Essential Corporate Purpose
General Obligation Bonds and General Obligation Refunding Bonds in an
amount not to exceed $23,500,000 and the Debt Service levy to pay principal
and interest on the bonds as well as setting the date of public hearing for March
10, 2020.
It should be noted that the $2,500,000 in TIF abated bonds for extending the
sanitary sewer line along 13th Street from Dayton across Highway 35 is included
in the public hearing notice. However, the City Council will not be obligated to
issue bonds for this project unless we are able finalize an acceptable agreement
with the developer and complete the TIF process.
2. Modify the pre-levy resolution authorizing the issuance of Essential Corporate
Purpose General Obligation Bonds, reduce the FY 2020/21 property tax levy,
and delay one, or more, of the recommended capital projects. Under this
alternative, the City Council will require setting a date of public hearing for March
10, 2020.
CITY 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 resolution authorizing the issuance of Essential
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Corporate Purpose General Obligation Bonds and General Obligation Refunding Bonds
in an amount not to exceed $23,500,000 and the Debt Service levy to pay principal and
interest on the bonds as well as setting the date of public hearing for March 10, 2020.
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