Memorandum

City of Lawrence

Finance Department

TO:	Diane Stoddard, Interim City Manager
FROM:	Bryan Kidney, Finance Director
DATE:	August 18, 2015
RE:	2015 General Obligation Bond and Temporary Note Sale: Review bids received and approve sale of $9,610,000* General Obligation Improvement Bonds, series 2015-A to the lowest responsible bidder. Consider declaring an emergency and adopt on first and second reading, Ordinance No. 9148 authorizing and providing for the issuance of General Obligation Improvement Bonds, series 2015-A; adopt Resolution No. 7136 prescribing the form and details and authorizing and directing the sale and delivery of such bonds. Review bids received and approve sale of $10,880,000* General Obligation Temporary Notes, Series 2015-I to the lowest responsible bidder. Consider adopting Resolution No. 7137 prescribing the forms and details of and authorizing and directing the sale and delivery of General Obligation bonds, series 2015-A.

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 design and construction. Many projects are complete and ready for permanent financing. There are also projects that have been previously financed that need additional funding.

All projects in the proposed financing have previously been approved by the governing body.

Proposed General Obligation Improvement Bonds, Series 2015-A

The City of Lawrence has two outstanding temporary notes (Series 2014-II and Series 2014-III) that are 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.

Project		Authorized Amount			Bond Financing Needed
2014 Fire Truck Purchase		654,885			$     611,525
31^st Street Improvements*		4,000,000			3,067,588
2014 Overlay & Concrete Rehabilitation		1,750,000			1,443,274
Bob Billings & G Williams Way Signal	275,000			275,000
2013 Carnegie Improvements	200,000			107,705
9^th, Emory to Michigan turn lane	100,000			45,632
2014 ITS Project, 6^th Street and 23^rd Street	400,000			400,000
9^th reconstruction, Delaware to Mass	350,000			317,098
City facility repairs	575,000			576,750
Bob Billings Pkwy & K10 Interchange	1,000,000			981,848
Public Safety radio replacement	3,095,000			1,022,083
Additional Amount for 2013 Klink	400,000		151,329
Additional Amount for Rock Chalk Park	25,000,000		346,356
Capitalized Int., Issuance Cost, Rounding, less cash on hand			263,812
Estimated Bond size, Series 2015-A			$9,610,000

*Final payment estimated at $800,000 to KDOT will be financed in future bond issue

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 this year. 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 construction financing.

Project	Authorized Amount	Temporary Financing Needed
Farmland Sanitary Sewer Improvements	1,725,000	$     710,662
Farmland Street Improvements	7,855,000	7,855,000
Yankee Tank Estates Phase 1 Street & Sewer	689,200	543,732
Bob Billings Parkway, Kasold to Wakarusa	600,000	600,000
707 Vermont Parking Garage	842,000	842,000
Mesa Way, Pioneer Ridge Center Subdivision	83,000	83,000
Mesa Way, Pioneer Ridge Subdivision	35,000	35,000
Capitalized Int., Issuance Cost, and Rounding		210,606
Estimated Note size, Series 2015-I		$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.

Bond and Temporary Note Sale

The City will conduct both a competitive bond sale and competitive temporary note sale at 11:00 AM on Tuesday, August 25. Staff will bring to the Commission at the August 25 Commission meeting a completed bond ordinance and resolution to accept the best bid and authorize issuance of the bonds and a temporary note resolution to accept the best bid and authorize issuance of the temporary notes.

As part of the bond sale process, the City requested a bond rating from Moody’s Investors service. The bond rating and rationale for the rating will be reviewed at the August 25 Commission meeting.

The sale is not complete until an ordinance is adopted naming the purchaser of the bonds. An ordinance does not go into effect until a second reading. Staff is requesting the Commission declare an emergency and adopt the ordinance on first and second readings on the night of the sale.

Action Requested

The City Commission is requested to take the following action:

• Review bids received and approve the issuance and delivery of $9,610,000* General Obligation Improvement Bonds, series 2015-A bonds to the best bidder.
• Consider declaring an emergency and adopt on first and second reading, Ordinance No. 9148 authorizing and providing for the issuance of General Obligation Improvement Bonds, Series 2015-A.
• Consider adopting Resolution No. 7136 prescribing the forms and details of and authorizing and directing the sale and delivery of General Obligation Improvement Bonds, Series 2015-A.
• Review bids received and approve the issuance and delivery of $10,880,000* General Obligation Temporary Notes, Series 2015-I to the best bidder.
• Consider adopting Resolution No. 7137 prescribing the forms and details of and authorizing and directing the sale and delivery of General Obligation Temporary Notes, Series 2015-I.

*Amounts subject to change based on bids received on day of sale.