Staff recommends that City Council approve the resolution authorizing the issuance and private negotiated sale of Expanded North 27th Street tax increment bonds.

This resolution has been submitted to authorize the issuance of tax increment bonds, and to set the limits for the principal amount, the interest rate, underwriter's discount, and the maturity of the bonds. Bond proceeds would finance the conversion of one-way to two-way streets in the downtown area and related costs of debt issuance. The project will also include upgrading traffic and pedestrian signals, improvements to off-street parking, and landscaping. The purpose of the project is to facilitate pedestrian safety, improve traffic flow, improve public parking, and enhance access to local businesses within the district.   The annual debt payments for these improvements will be paid from the tax increment funds from the District.  This project has not yet been bid, final bond sale amounts will correspond with construction bid amounts, if approved.

City Council may:

• Approve; or,
• Not Approve the resolution. If not approved, sufficient funding for the two-way conversion project will not be available and the project will not occur.

During the negotiations, the interest rate will be determined, which will drive the total cost of borrowing. The parameters authorized by this resolution limits the maximum aggregate principal amount, exclusive of premium or discount, not to exceed $5,750,000, with a maximum interest rate of 6.50%. The underwriter's discount shall not exceed 1.30% of the principal amount of the bonds, exclusive of premium or discount.  The final maturity will be later than July 1, 2044.

The project is included in the FY24 budget to be funded with $3.8M from Tax Increment Funds. Staff is requesting authority to issue up to $5.7M to cover estimated bond issuance costs of $144,000, a deposit for the debt service reserve requirement of $415,000, reimbursement for the construction design contract $674,374 (awarded 11/14/22) and $4,466,626 available for construction. Because bids for the project will not be opened until early February, staff is recommending a parameter that will allow for the construction capacity beyond the original budget, pending final bids. Final bonds issued will be consistent with construction bids, and will not occur until after Council approves the construction contract.