HomeMy WebLinkAbout07/25/1995, C-3 - FINANCING FOR THE HEADQUARTERS FIRE STATION ���IpI�RIIIINIIIII�IIliOulll MEETING DATE:
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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: