HomeMy WebLinkAbout02/01/1994, C-2 - FINANCING FOR THE PERFORMING ARTS CENTER lllll�lglll�lllllll�Ip II`II MEETING GATE:
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COUNCIL AGENDA REPO
FROM: William C. Statler, Director of Financ
Prepared by: Linda Asprion, Revenue Manager ,
SUBJECT: FINANCING FOR THE PERFORMING ARTS CENTER
CAO RECOMMENDATION
Adopt a resolution preserving the City's ability to debt finance its $5,061,500 contribution
to the performing arts center.
DISCUSSION
Background
Based on Council approval on November 16, 1993 to go forward with construction of the
performing arts center, payments totaling $4,421,000 have been made to the State as of
December 21, 1993. This represents all of the City's $5,061,500 contribution towards the
project, with the exception of $390,500 for "group H equipment" purchases (which have not
yet gone out to bid), and $250,000 for projected interest earnings during construction. As
discussed on pages A-6 and A-7 of the 1993-95 Financial Plan, the City proposes to fund this
project primarily with pay-as-you go resources in order to reduce future debt service costs.
However, as also discussed in the Financial Plan, the City can generally invest funds at a
greater yield than it can borrow them, and accordingly, we will be preparing a cost/benefit
analysis of pay-as-you go versus debt financing based solely on these factors before finalizing
financing plans for this project. By adopting this resolution, Council is preserving the City's
ability to debt finance the funding for the performing arts center at a later date (up to two
years from the final payment date, or by December 21, 1995).
FISCAL IMPACT
There is no fiscal impact associated with adopting this resolution. This resolution merely
retains the City's option to debt finance the performing arts center at a later date if a future
fiscal analysis determines debt financing to be the best source of funding for the City. This
fiscal analysis should be completed by April of 1994.
CONCURRENCES
The City's bond counsel - Jones Hall Hill & White - drafted the proposed resolution and
concurs with its adoption by Council.
ATTACHMENT
Resolution preserving the City's ability to debt finance the performing arts center
RESOLUTION NO. (1994 SERIES)
RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
DECLARING INTENTION TO REIMBURSE EXPENDITURES
RELATING TO PERFORMING ARTS CENTER PROJECT
FROM THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS OF THE CITY
WHEREAS, the City has previously advanced funds, and expects to make future
advances, to finance a project consisting of a performing arts center (the 'Project"), and in
order to provide funds to finance the Project the Council intends to issue and sell its tax-
exempt bonds, certificates of participation or other obligations in the aggregate principal
amount of not to exceed $6,000,000 (the "Tax-Exempt Obligations"); and
WHEREAS, in order to use the proceeds of the Tax-Exempt Obligations to
reimburse advances made by the City for the Project before the date of issuance of the Tax-
Exempt Obligations, and not more than sixty (60) days before the date of adoption of this
Resolution, Section 1.150-2 of the United States Income Tax Regulations requires that
Council declare its intention to reimburse. such advances from the proceeds of the Tax-
Exempt Obligations; and
WHEREAS, it is in the public interest and for the public benefit that the City
declare its official intent to reimburse the expenditures referenced herein;
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION L Declaration of Intent. The Council hereby declares that it reasonably
expects to issue the Tax-Exempt Obligations and to use a portion of the proceeds thereof
to reimburse expenditures made by the City for the Project before the date of issuance of
the Obligations, and not more than sixty (60) days before the date of adoption of this
Resolution. The aggregate principal amount of the Tax-Exempt Obligations shall not exceed
$6,000,000.
SECTION 2. Effective Date, This Resolution shall take effect from and after the
date of its passage and adoption.
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Upon motion of , seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing Resolution was adopted this day of , 1994.
Mayor Peg Pinard
ATTEST:
City Clerk Diane GJadwell
APPROVED:
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