Consideration and Adoption of Ordinance No. 2013-03:  An ordinance of the Council of the City of Flagstaff, Coconino County, Arizona, approving and authorizing the sale and issuance of City of Flagstaff, Arizona General Obligation Bonds, Series 2013, in the total aggregate principal amount of not to exceed $13,000,000 and all matters related thereto; prescribing certain terms and conditions of such bonds including the delegation to the Management Services Director of the City to designate the final principal amount, maturities, interest rates and yields and other matters with respect to such bonds; awarding a contract for the purchase of such bonds; ratifying the distribution of a Preliminary Official Statement and approving a final Official Statement. ($3 million for Picture Canyon/2004; $6.5 Million for Street Utility Bonds/2010; $2 Million for Forest Health/2012)

This ordinance allows for the issuance of General Obligation debt as approved by voters in 2004, 2010, and 2012.

The General Obligation (GO) debt issuance has been budgeted for FY2013 and will be paid through secondary property taxes.  It is currently anticipated to issue a total of approximately $12 million dollars in GO bonds to include $3 million for Open Space to reimburse the City for the Picture Canyon purchase as authorized in 2004; $6.5 million for the remaining balance of Street Utility bonds as authorized in 2010; and $2 million for Forest Health work as authorized in 2012.

Repair Replace maintain infrastructure (streets & utilities)
Effective governance

Yes.  Council approved all bond questions that went to the voters. Council approved Reimbursement Resolution 2012-037 on 10/16/12 related to the  Open Space and Street/Utility projects.

Approve the Ordinance as written allowing the City to move forward expeditiously in issuing debt.
Approve the Ordinance with changes in authorized personnel and/or the amount of debt.
Reject the Ordinance and direct staff to find alternate funding sources.

On May 18, 2004, City voters approved ten capital projects, one of which was for $7.6 million dollars for Neighborhood Open Space and FUTS Land Acquisition.  In 2012, the City of Flagstaff successfully purchased Picture Canyon for approximately $5 million dollars of which $2.4 million dollars was recaptured through an Arizona State Parks Growing Smarter grant. This request is to issue $3 million dollars in general obligation debt to repay the City for expenditures incurred to date and in anticipation of the 2014 FUTS and Open Space work program.

On November 2, 2010, City voters approved two capital projects, one of which was for $16.5 million dollars for Street and Utilities Improvements.  The City has been completing numerous projects throughout the City and all work is anticipated to be complete in the fall of 2013.  Approximately $10 million dollars of this debt was previously issued and this action will issue the remaining authority.

On November 6, 2012, City voters approved two capital projects, one of which was for $10 million dollars for the Forest Health and Water Supply Protection Project.  This request is to issue $2 million of the total authorized.  Two million dollars is anticipated to fund these activities for two years.

The City has already advanced the funds for the Picture Canyon purchase and needs to reimburse itself as Council authorized in Reimbursement Resolution 2012-37 on October 16, 2012.

In addition, the Reimbursement Resolution also authorized the City to reimburse itself for expenditures incurred as related to the Street/Utility improvements.  A portion of the expenditures will likely exceed the bonds currently issued but the City is kept whole through the Reimbursement Resolution.  The entire project is anticipated to be complete by the fall of 2013.

The Forest Health initiative is still in the planning stages and the City is recommending to issue this debt approximately every two years as the work plan develops and appropriate contracts are put into place.

This debt is currently anticipated to be issued for 15 years at a rate at something less than 3%.  The City is timing this debt issuance to be in advance of numerous other offerings that could saturate the market.  Issuing the debt for 15 years will maximize the secondary property tax rate as currently set and will draw down a portion of the accumulated fund balance.  The fund balance can only be used for the payment of general obligation debt.  As directed by Council, staff is anticipating setting future rates to maintain a flat revenue and will bring forward alternate rate setting proposals if necessary to support future debt issues.

After the City issues the debt as requested through this ordinance, the remaining authorized projects as supported by General Obligation bonds are as follows:

1996 = Parks and Recreation - $1.1 million
2004 - Neighborhood Open Space and FUTS Land Acquisition - $2.2 million
2004 - Regional Open Space - Observatory Mesa - $5.5 million
2004 - Lake Mary Regional Park and Other Park Land Acquisitions - $2.8 million
2012 - Forest Health and Water Supply Protection Project - $8 million
2012 - Core Services Maintenance Facility - $14 million

Empower - The decision to authorize these projects and issue the debt was the public's.
 

The community was involved through the elections held in 2004, 2010, and 2012. 

In addition, the City formed a Bond Advisory Task Force for the 2004 and 2010 elections.  In advance of all three elections, the City provided numerous presentations to the public both on-site and off-site of City Hall, as well as regular updates at the regular Council work sessions and/or meetings.

Approve the Ordinance as written allowing the City to move forward expeditiously in issuing debt.
Approve the Ordinance with changes in authorized personnel and/or the amount of debt.
Reject the Ordinance and direct staff to find alternate funding sources.