HomeMy WebLinkAboutA002 - Council Action Form dated August 24, 2021 ITEM # 16b
DATE: 08/24/21
COUNCIL ACTION FORM
SUBJECT: RESOLUTION SETTING THE DATE FOR PUBLIC HEARING ON
PROPOSAL TO ENTER INTO A GENERAL OBLIGATION URBAN
RENEWAL LOAN AGREEMENT AND TO BORROW MONEY
THEREUNDER
BACKGROUND:
The Downtown Reinvestment District Urban Renewal Plan includes a project to
construct an indoor Aquatics Center with other recreational amenities. Funding for the
project is expected to include donations and General Obligation bonds with repayment
of the bonds from a combination of property taxes and Reinvestment District Revenue
from the State of Iowa.
The plan includes a current total estimated cost of $31,200,000 for the Indoor Aquatics
Center. It is expected that the bond issuance amount needed will be $21 ,200,000. The
financing of this project currently is planned to be as follows:
$11 ,200,000 from unabated General Bond principal and interest payments
$10,000,000 from abated General Bond principal and interest payments
from Reinvestment District Revenue
$10,000,000 from donations (To date, $9,470,000 has been pledged)
$31,200,000 TOTAL
It is important to emphasize that the proposed bond issuance of $21 ,200,000 is
expected to be abated partially by the Reinvestment District revenue. However, it must
be emphasized that the bond issuance obligates the City to repay the bonds regardless
of whether the City's final Reinvestment District application is approved and regardless
of whether the state sales and hotel/motel taxes generated by the project accumulate to
at least $10,000,000 during the next 20 years.
To authorize proceeding with the bond issue, the City Council must establish the
Downtown Reinvestment District Urban Renewal and Urban Renewal Plan and
then hold a public hearing on issuance of the bonds. Assuming approval after
the public hearing and that no qualifying petition requesting a bond election is
received, the City Council will then have authority to issue bonds up to the
amount authorized by the City Council at any time in the future when the Indoor
Aquatics Center project proceeds.
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ALTERNATIVES:
1 . Set September 14, 2021 as the date of public hearing to authorize the issuance
of General Obligation Urban Renewal Bonds in an amount not to exceed
$21 ,200,000 for the Indoor Aquatics Center. After the hearing, the City Council
can authorize the sale of bonds and associated property tax levy to repay
the bonds.
2. Do not set a date of hearing to authorize the issuance of General Obligation
Bonds for the Indoor Aquatics Center at this time. Delaying the public hearing
will place the City's final application for Reinvestment District funding at
risk, possibly resulting in the loss of $10 million in state funding for the
Indoor Aquatics Center.
3. Set September 14, 2021 as the date of public hearing to authorize the issuance
of General Obligation Urban Renewal Bonds for the Indoor Aquatics Center in a
different amount.
CITY MANAGER'S RECOMMENDED ACTION:
Prior to the issuance of debt, state law requires that a public hearing be held. This is a
required step in order to accomplish the City Council's approved Downtown
Reinvestment District Urban Renewal Plan and for a successful final application for the
State of Iowa Reinvestment District Program.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative No. 1 , as described above.
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