Public Hearing and Adopt Resolution Approving the Issuance of General Obligation Capital Improvement Plan Bonds, Series 2012A

In 2005, bonds were issued in the amount of $19,200,000 for the construction of the municipal center and that portion of the municipal parking ramp that pertained to employee parking.  Lease Revenue Bonds, via the EDA, were issued.  As part of the 2003 legislative session, Governmental units are allowed to issue what is termed "Capital Improvement Plan (CIP) Bonds" to fund municipal projects such as city halls, fire stations, police stations, etc.  The issuance of CIP bonds allows the City to retain a lower interest rate.

For the City to take advantage of the CIP bond, the current Capital Improvement Plan (2012-2016) needs to be amended to include the municipal center refinancing as a 2012 project.  Copies of the amended pages to the 2012-2016 CIP are attached.

As part of the 2013 budget discussions, the refinancing of the Municipal Center Debt has been addressed.  The current debt has an interest rate of 4.44% with an annual debt payment of $1.5M.  The current debt schedule has the earliest call date of December 2014.  Due to the lowest interst rates in recent history, debt schedules were prepared that presented a positive present value benefit to the city if the debt was extended to 2031 and thus reducing the annual debt payment to approximately $1.1M (based on current numbers).

At its regular meeting of February 14, 2012, city council authorized the calling for a public hearing on the intention to issue General Obligation Capital Improvement Plan Refunding Bonds and to adopt the amended 2012-2016 Capital Improvement Plan (CIP).

Per the proposed bond schedule, if council gives preliminary approval for the issuance of the debt, the bonds will be priced on March 20, 2012 and brought back to the City Council at its regular meeting of March 27, 2012 for final approval of the sale of the bonds.

Staff recommends that Council adopt Resolution #12-03-XXX approving the issuance of General Obligation Capital Improvement Plan Bonds, Series 2012A and amending the 2012-2016 Capital Improvement Plan.

Motion to authorize adoption of Resolution #12-03-XXX approving the issance of General Obligation Capital Improvemet Plan Bonds and amending the 2012-2016 Capital Improvement Program (CIP).