CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the ordinance authorizing the issuance of General Obligation (GO) Bonds for an amount not to exceed $25,000,000
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Finance Director
BOARD/COMMISSION REVIEW:
The Financial Advisory Board (FAB) reviews debt issuance plans as part of the annual budget process. The proposed bond issuance was discussed at the January 29, 2024, board meeting. FAB is supportive of using bonds as a strategic financing mechanism for capital improvement projects.
BACKGROUND:
In December 2022, the City Council approved the 2023 Annual Budget and Capital Improvement Program (CIP). The 2023 CIP included $34,460,000 in capital projects without an identifiable funding source. By adopting the budget, the City Council tentatively authorized staff to pursue issuing bonds for the payment of all unfunded capital projects, with the City Council having final approval on any bond sale.
Since 2018, the City has issued bonds using a project reimbursement methodology. This allows staff to analyze capital project spending and make any adjustments to the required borrowing amounts. This practice also allows staff to manage cash flow better and reduce the amount of interest costs incurred.
To use this methodology, the City is required to pass an Official Intent for Reimbursement Resolution regarding capital projects. This allows projects approved through the annual budget to be included in any future bond sale. The resolution itself does not provide the authorization to borrow, it only reserves the ability to fund current projects with a future bond sale.
On January 17, 2023, the City Council adopted Resolution 23-001, making any capital expenditure included in the resolution eligible for reimbursement over the following 18 months.
Staff has analyzed capital project spending and is ready to proceed with a bond issuance for the reimbursement of 2023 capital projects. Staff also worked...
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