Consideration and Adoption of Ordinance No. 2019-35:  An ordinance of the City Council of the City of Flagstaff, (1) providing for the sale and issuance of City of Flagstaff, Arizona General Obligation Bonds, Series 2019 and for the annual levy of a tax for the payment of the bond; (2) approving the form and authorizing the execution and delivery of necessary agreements, instruments and documents related to the sale and issuance of the bonds; (3) delegating authority to the Management Services Director of the City to determine certain matters and terms with the respect to the foregoing; (4) adopting continuing disclosure procedures in connection with issuance of obligations of the City; and (5) authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by this ordinance and ratifying all actions taken to further this; providing for severability, authority for clerical corrections, and establishing an effective date (General Obligation Debt Authorization - Public Safety Communication Equipment and Municipal Court Facilities)

This ordinance allows for the issuance of General Obligation debt as approved by voters in 2010 and 2016.  Debt will be issued for the Public Safety Communication project and the Municipal Court Facilities.  An ordinance for this action is required by City Charter ARTICLE VI - FINANCE AND TAXATION, Section 5 - WHEN ACTIONS ARE TO BE TAKEN BY ORDINANCE.

Series 2019 General Obligation Bonds will be issued as New Money Bonds in an amount not to exceed $12,362,713 to include all or a portion of the following:

• 2010 authorization - $4,720,000 for Public Safety Communication System.  Anticipate issuing the remaining $362,713 of the authorization.
• 2016 authorization - $12,000,000 for Municipal Court Facilities Project.  Anticipate issuing the entire authorization

These bonds will be issued as General Obligation Bonds and will be repaid through secondary property tax collections within the current rate of $0.8366 per $100 of assessed valuation.

Council Goals:
Transportation and Other Public Infrastructure-Deliver quality community assets and continue to advocate and implement a highly performing multi-modal transportation system.
 
Regional Plan:
Goal PF.2. Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics.

Yes.  Council authorized the 2010 and 2016 elections which voters approved the issuance of debt for the specific projects.  Issuing debt was anticipated when the voters approved the questions on the ballots.  On April 3, 2018, Council adopted Reimbursement Resolution 2018-18 for the Public Safety Communication equipment.  On September 3, 2019, Council adopted Reimbursement Resolution 2019-42 for the Municipal Court Facilities. 

• Approve the Ordinance as written allowing the City to move forward with the issuance of New Money Bonds as General Obligation debt. Pros-Allows for cash flow necessary to complete voter-approved projects while maintaining the current secondary property tax rate.  Cons-Increases City debt.
• Recommend changes to the Ordinance modifying the issuance of either the New Money Bonds. Pros and Cons are dependent on changes.
• Do not approve the issuance of General Obligation Debt. Pros-Delays level of debt for the City.  Cons-Projects may need to stop and the City will need to find the cash flow for work completed to date.

On November 6, 2010, the City of Flagstaff voters approved $4,720,000 in General Obligation debt to be issued and used for the Public Safety/City Operations Communication Systems.  The City has substantially completed the replacement of the communication system and issued $4,357,287 in debt.  The remaining $362,713 is available for this debt authorization.  The City's intended use for this remaining about is to replace and upgrade radios for police and fire.  

On November 8, 2016, the City voters approved $12,000,000 in General Obligation bonds to be issued and used for the construction of Municipal Court Facilities. The City has not issued any bonds to date.  The Municipal Court Construction began this summer.  The total project estimate is $19.5 million and is funded with $3.5 million court fees and general funds transfers as well as $4.0 million in financing with a Certificate of Purchase, lease-purchase finance. The City will not be selling the existing court property at this time.  The property will initially be used for temporary surface parking while the City teams with the Downtown Business Association to develop a downtown master plan which may help determine best uses in the future for that property, which may include a permanent parking facility. The new City Court Facility will provide a safe and efficient Municipal building that will greatly improve the Court's operations now and into the future, enhance the staff and user experience and provide an attractive amenity to downtown Flagstaff.

The proposed ordinance includes the maximums contemplated to be issued to provide the greatest flexibility in both amount and timing.  This authorization allows us to go into the market with the most favorable factors in play including market saturation, rates, and ratings.

While the purpose of this agenda item is to approve an ordinance to allow the City to issue debt, we have included a draft Preliminary Official Statement and Purchase Agreement as informational documents for your review.  These documents have been reviewed by our Financial Advisors and Bond Counsel.  These are substantially complete however may have some changes prior to completion of the debt transactions.  Final documents will be available upon request to the Management Services Director.

The New Money Bonds will be paid through the assessment of secondary property taxes. To meet the promise made to the public to hold the secondary property rate flat, the City will use strategies including using the secondary property tax reserves and issuing debt that is layered in so that the City can maintain the existing secondary property tax rate of $0.8366 per $100 of assessed valuation.

The community benefits by having the City complete the projects as promised to the voters in the 2010 and 2016 elections.

The process to select the projects that were voted on by the public involved: Consult, Involve, Collaborate and Empower.
The process to authorize the issuance of debt is to INFORM the public.