Consent 1.N.
Regular City Council Meeting
- Meeting Date:
- 04/12/2010
- TITLE
- Airport Recovery Zone Facility Bond Application and Refinancing Airport Bond Resolution
- PRESENTED BY:
- Pat Weber, City Hall Administration
- Department:
- City Hall Administration
Presentation:
PROBLEM/ISSUE STATEMENT
Pursuant to Internal Revenue Service Notice 2009-50, the City was allocated $26,831,000 of Recovery Zone Facility Bond authority . Yellowstone County has allocated its $9,973,000 of Recovery Zone Facility Bond authority to the City for a total Recovery Zone Facility Bond authority of $36,804,000. Zootist Hospitality LLC received authority for $20,000,000 to renovate the Northern Hotel.
The Airport has requested $7,000,000 of Recovery Zone Facility Bonds for the construction of a new Car Rental Quick Turn Around Facility (QTA) for car rental companies, currently under contract with the City, to wash, detail, fuel and provide minor maintenance on their rental automobile fleets. The new QTA will replace the existing facility, which is in poor condition and does not meet the car rental companies needs to quickly turn a rental car around for the next customer rental. The application meets the requirements of the City’s Resolution 09-18890, establishing the criteria for financing as Recovery Zone Facility Bonds. Airport staff will be discussing the details of this project at the April 19th council work session.
Design and some construction costs may precede the issuance of bonds to finance the project. The attached resolution allows the City to reimburse those expenses from the bond proceeds.
In conjunction with the Recovery Zone Facility Bonds, the Airport will refinance the Series 2000 Airport Revenue Refunding Bonds. The City issued and sold its Airport Revenue Refunding Bonds, Series 2000, in the original aggregate principal amount of $11,965,000 for the purpose of refinancing the then outstanding principal amount of its $15,000,000 Airport Revenue Bonds, Series 1990, which were issued to pay a portion of the costs of construction of improvements to the Airport Terminal Building. The Series 2000 Bonds are currently outstanding in the aggregate principal amount of $7,570,000 Based on preliminary analysis, the City’s Financial Services Manager and Springsted Inc., the City’s financial advisor, are of the opinion that the City could achieve debt service savings through the refunding of the Series 2000 Bonds.
The attached resolution authorizes the Financial Services Manager to select the underwriter for the proposed bonding and refunding through a request for proposal process for both issues.
The Airport has requested $7,000,000 of Recovery Zone Facility Bonds for the construction of a new Car Rental Quick Turn Around Facility (QTA) for car rental companies, currently under contract with the City, to wash, detail, fuel and provide minor maintenance on their rental automobile fleets. The new QTA will replace the existing facility, which is in poor condition and does not meet the car rental companies needs to quickly turn a rental car around for the next customer rental. The application meets the requirements of the City’s Resolution 09-18890, establishing the criteria for financing as Recovery Zone Facility Bonds. Airport staff will be discussing the details of this project at the April 19th council work session.
Design and some construction costs may precede the issuance of bonds to finance the project. The attached resolution allows the City to reimburse those expenses from the bond proceeds.
In conjunction with the Recovery Zone Facility Bonds, the Airport will refinance the Series 2000 Airport Revenue Refunding Bonds. The City issued and sold its Airport Revenue Refunding Bonds, Series 2000, in the original aggregate principal amount of $11,965,000 for the purpose of refinancing the then outstanding principal amount of its $15,000,000 Airport Revenue Bonds, Series 1990, which were issued to pay a portion of the costs of construction of improvements to the Airport Terminal Building. The Series 2000 Bonds are currently outstanding in the aggregate principal amount of $7,570,000 Based on preliminary analysis, the City’s Financial Services Manager and Springsted Inc., the City’s financial advisor, are of the opinion that the City could achieve debt service savings through the refunding of the Series 2000 Bonds.
The attached resolution authorizes the Financial Services Manager to select the underwriter for the proposed bonding and refunding through a request for proposal process for both issues.
ALTERNATIVES ANALYZED
The Council may:
- Approve the application and the resolution; or
- Not approve the application and the resolution.
FINANCIAL IMPACT
The Refunding Bonds are being issued to reduce future interest costs. Once an underwriter is selected, they will determine the interest cost reductions from refunding based on the current market. The Recovery Zone Facility Bonds are being issued to fund the design, construction, furnishing and equipping of a new QTA.
RECOMMENDATION
Staff recommends approval of the application and resolution.