HomeMy WebLinkAboutA006 - Council Action Form dated March 28, 2023 ITEM #: 14
DATE: 03-28-23
DEPT: FINANCE
COUNCIL ACTION FORM
SUBJECT: PUBLIC HEARINGS AND NOTICE OF INTENT TO ISSUE $11,750,000
ESSENTIAL CORPORATE PURPOSE GENERAL OBLIGATION BONDS,
$550,000 GENERAL CORPORATE PURPOSE GENERAL OBLIGATION
BONDS FOR MUNICIPAL PARK MAINTENANCE FACILITIES, AND
ASSOCIATED TAX LEVY FOR DEBT SERVICE
BACKGROUND:
The FY 2023/24 City Budget includes several General Obligation (G.O.) Bond-funded capital
improvements. A public hearing is required to authorize the 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 in the FY 2023/24 budget.
The G.O. Bonds and debt service levy for the FY 2023/24 budget are based on projects
listed in the table below. Council authorization will be required later to approve the sale of
the bonds.
Though the bonds will be combined in a single sale, the $550,000 to fund the Park
Maintenance Facility renovation is a general corporate purpose issuance subject to a
reverse referendum and requires a separate public hearing. The City is limited to $700,000
in general corporate purpose bonds by purpose of use and each use requires a separate
hearing. The remaining projects are qualified as essential corporate purposes, not subject
to reverse referendum, and can be combined in a single public hearing in amount not to
exceed $11 ,750,000.
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
aquatic center as part of reinvestment district urban renewal plan. In FY 2022/23, the
City issued the first $1,000,000 in support of the indoor aquatic facility project. The
second issue of bonds to fund the aquatic center, also in the amount of $1,000,000,
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 the 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 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
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included as part of the total debt service property tax levy and is $1 ,469,313 of the total
taxes levied for debt service at $11,143,151 .
The Capital Improvements Plan's 2022/23 G.O. Bond issue includes the following:
2023124 CIP G.O. ISSUE
Arterial Street Pavement Improvements $ 500,000
Asphalt Street Pavement Improvements 3,000,000
Concrete Pavement Improvements 950,000
Collector Street Pavement Improvements 1 ,200,000
Seal Coat Street Pavement Improvements 1 ,750,000
South 161" Street Road Widening 325,000
Campustown Public Improvements 1 ,200,000
Alley Pavement Improvements 400,000
Intelligent Transportation System 468,300
Traffic System Capacity Improvements 370,000
Total G.O. Essential Corporate Purpose $ 11,163,300
Issuance Costs/Rounding 586,700
GRAND TOTAL — 2023/24 G.O. ISSUANCE $ 11,750,000
Park System Facility Improvements $ 500,000
Issuance Costs for Park Facility Improvements 50,000
Bond Hearing Already Held For Indoor Aquatic Center $ 1,000,000
The total bond issue, excluding issuance costs, is $12,663,300, as indicated in the approved
FY 2023-2028 CIP.
ALTERNATIVES:
1 . Set April 11 , 2023, as the date of the public hearing to authorize the issuance of
Essential Corporate Purpose General Obligation Bonds in an amount not to exceed
$11 ,750,000 and a second hearing to authorize the issuance of General Corporate
Purpose General Obligation Bonds in an amount not to exceed $550,000.
After the hearings, the Council can authorize the sale and associated pre-levy
resolution.
2. Reject or delay the public hearings, reduce the FY 2023/24 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.
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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 , as
described above.
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