Memorandum
City of Lawrence
Finance Department
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TO: |
Diane Stoddard, Interim City Manager |
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FROM: |
Bryan Kidney, Finance Director |
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Date: |
July 28, 2015 – Revised 08/04/15 |
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RE: |
Items related to the 2015 General Obligation Bond And Temporary Note Sale |
Background
The City typically issues general obligation debt in the fall of each year. Staff has reviewed all projects that are in various phases of authorizations and construction. Many projects are complete and ready for permanent financing. There are also projects that have been previously financed that need additional funding.
Before issuance of General Obligation debt, the City must first authorize issuance of the debt for each project. Also, per City Charter No. 27, the City must establish a maximum annual bonding amount for public improvements.
All projects in the proposed financing have previously been approved by resolution by the governing body. The 2014 Overlay and the East 9th Street reconstruction projects were previously authorized before the entire scope of the projects were known. Final costs are now known and the authorizing resolutions for these two projects need amended and are presented as Resolution No. 7131 and Resolution No. 7132 respectively.
Projects to Bond from Previously Issued Bonds
Two projects, 2013 Klink (KDOT Connecting Links Program) and the Rock Chalk Park infrastructure projects, were not 100% complete at the time of last year’s bond issue nor were rolled over into temporary notes. Instead, the projects were definitively financed with the fall 2014 bond issue. The final payments for the projects were not known at the time of the bond and the amount issued was less than the actual final payments. This allowed the City to ensure that the City did not over issue the amount of bonds needed and avoided the additional financing costs of rolling over a large amount of temporary notes.
The total amounts still to bond are included in the proposed General Obligation Improvement Bond, Series 2015-A
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Project |
Authorized Amount |
Amount Previously Issued |
Additional Bond Financing Needed |
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2013 Klink (KDOT Connecting Links Program) |
400,000 |
37,570 |
151,329 |
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Rock Chalk Park Infrastructure *Maximum Development Agreement $22,500,000 |
25,000,000* |
21,335,061 |
346,356 |
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Proposed General Obligation Improvement Bond, Series 2015-A
The City of Lawrence has two outstanding temporary notes (Series 2014-II and Series 2014-III) that will be due on October 1, 2015. The proceeds from these two temporary notes were used to finance multiple projects. Many of these projects are substantially complete and the City may now issue definitive debt in the form of general obligation bonds to pay off the temporary financing. The proposed bond structure also includes the final debt amount to reflect the final payments made earlier this year.
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Project |
Authorized Amount |
Bond Financing Needed |
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2014 Fire Truck Purchase |
654,885 |
$ 611,525 |
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31st Street Improvements* |
4,000,000 |
3,067,588 |
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2014 Overlay & Concrete Rehabilitation** |
1,030,000 |
1,443,274 |
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Bob Billings & G Williams Way Signal |
275,000 |
275,000 |
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2013 Carnegie Improvements |
200,000 |
107,705 |
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9th, Emory to Michigan turn lane |
100,000 |
45,632 |
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2014 ITS Project, 6th Street and 23rd Street |
400,000 |
400,000 |
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East 9th reconstruction, Delaware to Mass** |
200,000 |
317,098 |
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City facility repairs |
575,000 |
576,750 |
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Bob Billings Pkwy & K10 Interchange |
1,000,000 |
981,848 |
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Public Safety radio replacement |
3,095,000 |
1,022,083 |
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Additional Amount for 2013 Klink (KDOT Connecting Links Program) |
400,000 |
151,329 |
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Additional Amount for Rock Chalk Park |
25,000,000 |
346,356 |
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Capitalized Int., Issuance Cost, Rounding, less cash on hand |
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263,812 |
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Estimated Bond size, series 2015-A |
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$9,610,000 |
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*Final payment estimated at $800,000 to KDOT will be financed in future bond issue
**Additional Authorization needed
Proposed General Obligation Temporary Note, Series 2015-I
Some of the projects financed through the temporary notes were part of special assessment districts. The assessment process will not conclude for these projects in time to issue the permanent financing. In these cases, an additional temporary note needs to be issued effectively “rolling over” the financing until next year. In addition the Mesa Way projects are also ready for financing.
|
Project |
Authorized Amount |
Temporary Financing Needed |
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Farmland Sanitary Sewer Improvements |
1,725,000 |
$ 710,662 |
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Farmland Street Improvements |
7,855,000 |
7,855,000 |
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Yankee Tank Estates Phase 1 Street & Sewer |
689,200 |
543,732 |
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Bob Billings Parkway, Kasold to Wakarusa |
600,000 |
600,000 |
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707 Vermont Parking Garage |
842,000 |
842,000 |
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Mesa Way, Pioneer Ridge Center Subdivision |
83,000 |
83,000 |
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Mesa Way, Pioneer Ridge Subdivision |
35,000 |
35,000 |
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Capitalized Int., Issuance Cost, and Rounding |
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210,606 |
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Total |
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$10,880,000 |
Budget Impact
The debt service for all projects in the proposed financings is included in the proposed 2016 budget and within the long-term debt forecast.
Staff would like to offer the bonds and temporary notes at a competitive sale at 11:00 AM on August 25, 2015.
Action Requested
The City Commission is requested to:
1. Consider Resolution No. 7131 amending Section III of Resolution No. 7054.
2. Consider Resolution No. 7132 amending Section III of Resolution No. 7079.
3. Consider Resolution No. 7133 establishing the maximum annual bonding amount for public improvements pursuant to charter ordinance No. 27.
4. Consider Resolution No. 7134 authorizing the offering for sale of general obligation temporary notes, series 2015-I, and general obligation improvement bonds, series 2015-A, of the city of Lawrence, Kansas