HomeMy WebLinkAboutA003 - Council Action Form dated February 22, 2022 (also used for March 8 meeting) ITEM # 11
DATE: 2/22/2022
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARINGS AND NOTICE OF INTENT TO ISSUE $11,225,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION
BONDS, $700,000 GENERAL CORPORATE PURPOSE GENERAL
OBLIGATION BONDS FOR DOWNTOWN PLAZA, $350,000 GENERAL
PURPOSE GENERAL OBLIGATION BONDS FOR FIRE STATION
IMPROVEMENTS, AND ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2022/23 City Budget includes several 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 is included as part of the FY 2022/23
budget.
The G.O. Bonds and debt service levy for the FY 2022/23 budget are based on projects
listed in the table below. Council authorization will be required later to approve the sale
of the bonds. Bonds are expected to be issued shortly after the start of the new fiscal
year.
Though the bonds will be combined in a single sale, the $700,000 to fund the downtown
plaza and $350,000 (rounded) for fire station concrete rehabilitation are general
corporate purpose issues subject to a reverse referendum and separate public hearings
are required. The City is limited to $700,000 in general corporate purpose bonds by
purpose of use and each use requires a separate hearing. The remainder bond issue is
qualified as essential corporate purpose, not subject to reverse referendum and can be
combined in a single public hearing in amount not to exceed $11,225,000.
On September 14, 2021, the City Council held a public hearing to issue general
obligation bonds not to exceed $21,200,000 to fund the construction of an indoor
aquatics center as part of reinvestment district urban renewal plan. The first
issue of bonds to fund the aquatic center will be included in the upcoming sale of
bonds, but no additional public hearing is needed.
Please note that in addition to the amount to fund the G.O. Bond-funded capital
projects, the amount not-to-exceed includes 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.
1
The public hearings and pre-levy resolution will be required at the time of the budget
certification 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 $1,511,628 of the total
taxes levied for debt service at $10,627,021 .
The Capital Improvements Plan's 2022/23 G.O. Bond issue includes the following:
Fire Apparatus Replacement $747,000
CyRide Route Pavement Improvements (Lincoln Way) 1,225,000
Concrete Pavement Improvements 3,600,000
Asphalt Street Pavement Improvements 3,000,000
Seal Coat Pavement Improvements 750,000
Alley Pavement Improvements 400,000
Downtown Pavement Improvements 250,000
Intelligent Transportation System 452,560
Bridge Rehabilitation (South Fourth St/loway Creek) 700,000
Total G.O. Essential Corporate Purpose $11,124,560
Issuance Costs/Rounding 100,440
Grand Total—2022123 G.O. Issue $11,225,000
Fire Station 3 Concrete Rehabilitation $350,000
Downtown Plaza $700,000
Bond Hearing Already Held For:
Indoor Aquatic Center $6,192,512
ERNA ALT TIVES:
1 . Set March 8, 2022 as the date of public hearing to authorize the issuance of
Essential Corporate Purpose General Obligation Bonds in an amount not to
exceed $11,225,000, a second hearing to authorize the issuance of General
Corporate Purpose General Obligation Bonds in an amount not to exceed
700 000 and a third hearing to authorize issuance of General Purpose General
$ d ea g p
Obligation bonds for fire station improvements in an amount not to exceed
$350,000. After the hearings the Council can authorize the sale and associated
pre-levy resolution.
2. Reject or delay the public hearings, reduce the FY 2022/23 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. Rejection of the General Corporate Purpose bonds will delay the Downtown
Plaza project.
2
CITY MANAGER'S RECOMMENDED ACTION:
Prior to the issuance of debt, state law requires that a public hearing be held and
associated 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 setting March 8, 2022 as the date of public hearing to
authorize the issuance of Essential Corporate Purpose General Obligation Bonds and
General Obligation Refunding Bonds in an amount not to exceed $11,225,000, a
second hearing to authorize the issuance of General Corporate Purpose General
Obligation Bonds in an amount not to exceed $700,000, and a third hearing to authorize
issuance of General Purpose General Obligation bonds for fire station improvements in
an amount not to exceed $350,000.
3