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HomeMy WebLinkAbout07/25/1995, C-3 - FINANCING FOR THE HEADQUARTERS FIRE STATION ���IpI�RIIIINIIIII�IIliOulll MEETING DATE: u In►��Iuu I city of san Luis OBISPO COUNCIL AGENDA REPORT ITE UMBER: FROM: William C. Statler, Director of Finance Prepared by: Linda Asprion, Revenue Manager*_44011_� SUBJECT: FINANCING FOR THE HEADQUARTERS FIRE STATION CAO RECOMMENDATION Adopt a resolution preserving the City's ability to debt finance $3,500,000 for the Headquarters Fire Station. DISCUSSION The original budget for the Headquarters Fire Station was developed in 1989-90 and called for $570,000 in design and study costs and $2,350,000 in construction, for a total of$2,920,000. This original capital improvement plan included a component for new recreation administration offices; these projects were subsequently separated into two distinct projects leaving a remaining budget of $2,706,800 for the Headquarters Fire Station. On February 28, 1995 a thorough overview of this project with its associated-Posts was presented to Council and an additional $455,000 was approved as part of the 1995-97 Financial Plan for a current budget of $3,161,700. As discussed on pages A-5 and F-2 of the 1995-97 Financial Plan, the City proposes to combine the aggregate of the Headquarters Fire Station and Performing Arts Center projects not funded through pay-as-you-go resources ($1.7 million) with the City Hall seismic safety/HVAC improvements ($900,000) and Mission Plaza expansion ($455,000) for a bond issue of$3,055,000. 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 costibenefit 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 Headquarters Fire Station at a later date (up to two years from the final payment date, or by Spring of 1998). FISCAL IMPACT There is no fiscal impact associated with adopting this resolution. This resolution merely retains the City's option to debt finance the Headquarters Fire Station 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 December of 1995. 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 Headquarters Fire Station. RESOLUTION NO. (1995 SERIES) • A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO DECLARING INTENTION TO REIMBURSE EXPENDITURES RELATING TO THE HEADQUARTERS FIRE STATION PROJECT FROM THE PROCEEDS OF OBLIGATIONS OF THE CITY AND DIRECTING CERTAIN ACTIONS WHEREAS, the City has previously advanced funds, and expects to make future advances, to finance a project consisting of the headquarters fire station (the "Project"), and in order to provide funds to finance the Project the Council intends to issue debt for such Project and to use a portion of the proceeds of such debt to reimburse expenditures made for the Project prior to the issuance of the debt; and WHEREAS, United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that (with certain exceptions), prior to the payment of any such expenditures, the issuer declare an intention to reimburse such expenditures; 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 1. The Council hereby declares that it reasonably expects to issue obligations (the "Obligations)) for the purpose of paying costs of (i) the acquisition and construction of a headquarters fire station, consisting of a 16,000 square foot main story building designed with administrative offices, crew's living quarters, and four drive-through apparatus bays; (ii) the rehabilitation of an existing on-site 1,600 square foot maintenance facility to meet current code and seismic standards; and (iii) construction of a three story block training center. SECTION 2. The Council hereby declares. that it reasonably expects (i) to pay certain costs of the Project prior to the date of issuance of the Obligations and (ii).to use a portion of the proceeds of the Obligation for reimbursement of expenditures for the Project that are paid before the date of issuance of the Obligations. SECTION 3. The maximum principal amount of the Obligations is $3,500,000. On motion of ,.and seconded by and on the followingroll call vote; AYES: NOTES: ABSENT: the foregoing Resolution was passed and.adopted.this day of July, 1995. Mayor Allen Settle ATTEST-. City Clerk -- — APPROVED: