Consideration and Adoption of Ordinance No. 2018-15:  An ordinance of the Council of City of Flagstaff, Coconino County, Arizona, approving the sale and execution and delivery of not to exceed $10,000,000 aggregate principal amount of pledged revenue obligations, evidencing proportionate interests of the owners thereof in a third purchase agreement to acquire and construct street improvements and ongoing preservation of street conditions in and for the City; approving the form and authorizing the execution and delivery of such purchase agreement, a third trust agreement, a continuing disclosure undertaking, an obligation purchase contract and other necessary agreements, instruments and documents; delegating authority to the Management Services Director of the City to determine certain matters and terms with respect to the foregoing; authorizing a contract for the purchase of the obligations and ratifying preparation of a preliminary official statement and approving the use and distribution thereof and approving preparation of a final official statement and the execution, use and distribution thereof  (Revenue Bond Debt Authorization-Road Repair and Street Safety)

This ordinance allows for the issuance of Revenue Pledged indebtedness as approved by voters in 2014. The debt will be issued for the Road Repair and Street Safety projects (RR&SS). 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 2018 Revenue Obligations will be issued as new money obligations in an amount not to exceed $10,000,000 of the $20,000,000 2014 voter authorization related to the RR&SS projects. The debt service payments will be made from the revenues received from a 2014 voter-approved transaction privilege tax (sales tax) dedicated to RR&SS projects. Debt service expenditures are budgeted.  The life of the obligations will not extend beyond the current expiration date of the sales tax, December 31, 2034.

None.

COUNCIL GOALS:
TRANSPORTATION AND OTHER PUBLIC INFRASTRUCTURE: Deliver quality infrastructure and continue to advocate for and implement a highly performing multi-modal transportation system.

REGIONAL PLAN:
Goal T.4. Promote transportation infrastructure and services that enhance the quality of life of the communities within the region.

Yes. Council authorized the 2014 election which voters approved the issuance of indebtedness for the specific projects. Issuing indebtedness was provided for when the voters approved the question on the ballot. Council approved Ordinance No. 2014-34 levying the tax rate of 0.330% effective January 1, 2015 as approved by the voters. On June 7, 2016 Council approved Ordinance No. 2016-29 to authorized $10,000,000 of the authorized debt.  On July 6, 2017 Council approved Resolution No. 2017-25, a reimbursement resolution related to the Road Repair and Street Safety projects for the remaining $10,000,000 authorized debt.

• Approve the Ordinance as written allowing the City to move forward with the issuance of New Money Obligations as Pledged Revenue indebtedness. Pros-Allows for cash flow necessary to complete voter-approved projects.  Cons-Increases City indebtedness.
• Recommend changes to the Ordinance modifying the issuance of either the New Money Obligations. Pros and Cons are dependent on changes.
• Do not approve the issuance of Pledged Revenue indebtedness. 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 4, 2014, voters authorized the City to levy an additional transaction privilege tax (sales tax) rate of 0.33% ($0.0033) excluding the sales tax on food as exempted by State law. Such additional tax to be in effect for a period of 20 years commencing January 1, 2015. The proceeds of additional tax is to be used exclusively to pay for street improvements and ongoing preservation of street conditions inside the City limits and related costs and pay for these improvements and preservation through borrowing in a principal amount not to exceed $20,000,000 that would be paid back with interest from the tax in a period not to exceed 20 years from the date the debt is issued. The City intends to only issue indebtedness secured by the additional privilege tax (sales tax) for the period of the authorized tax. The allowance to issue debt for the improvements allows the City to accelerate the improvements.

The City has issued $10,000,000 of the authorized amount in August 2016.  After the execution and delivery of this authorization, no authorization would remain available.
 
While the purpose of this agenda items is to approve an ordinance to allow the City to issue debt, we have included a draft Preliminary Official Statement, Obligation Purchase Agreement, Third Trust Agreement, and Third Purchase Agreement as informational documents you may review. These documents have been reviewed by our Financial Advisors and Bond Counsel.  These are materially 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 community benefits by having the City complete the projects as promised to the voters in 2014.

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 indebtedness is to INFORM the public.