Public Hearing on Issuance of General Obligation (GO) Capital Improvement Plan (CIP) Bonds & on Capital Improvement Plan & Adopt Resolution #15-03-062 Giving Preliminary Approval to the Issuance of GO Capital Improvement Plan Bonds in an Amount not to Exceed $4.2M and Adopting the City of Ramsey's Capital Improvement Plan (for GO CIP Bonding Projects only) for the Years 2015 through 2019.

Purpose:  To provide the funding mechanism for the construction of Fire Station #2 whose final plans and designs and bid letting were authorized at the regular City Council meeting of January 27, 2015. Background:  In 2003, the Minnesota State Legislature adopted a statute known as the "CIP Act" that allows cities to issue municipal bonds under a capital improvement plan without the usual referendum requirement (CIP bonds are subject to a reverse referendum.  Whereby, if a petition (filed with the City Clerk) is signed by voters equal to at least five percent of the votes cast in the City in the last general election within 30 days after the public hearing regarding the bonds (March 10, 2015), the bonds may not be issued unless approved by the voters.  The "CIP Act" applies to capital improvements consisting of city halls, public works and public safety facilities.  The City used the CIP bonding method when it refinanced its Fire Station #1 bonds in 2004. The fire station #2 project has been included in the city's regular Capital Improvement Plan (CIP) since 2010 with its funding source listed as the issuance of CIP debt (General Obligation debt).  If the CIP calls for funding of the project to be provided by the issuance of General Obligation bonds, additional procedures must be followed:  Council must hold a public hearing regarding the issuance of the bonds and the CIP bonded project -Fire Station #2.   When a city issues GO CIP debt, they are required to have what is termed a five-year CIP adopted as part of this process that outlines the project to be funded.  The CIP Plan for Years 2015 through 2019 that is deemed to be adopted tonight is different from the City's entire 2015-2019 CIP document that was recently adopted.  The City's entire CIP includes all projects within the city:  Buildings, Water, Sewer, Streets, that are proposed to be constructed over the 5-year time frame whereas the Five-Year CIP related to the GO CIP bonding has to include a special narration outlining only those projects that are to be funded via CIP debt.  If authorized, the GO Capital Improvement Plan Bonds are scheduled to be sold the morning of May 26, 2015, with the approval of the sale and terms brought forward to the City Council for their approval that same evening (May 26, 2015).  The authorization of bids and awarding of contract for Fire Station #2 is scheduled to be brought forward to the City Council on March 24, 2015.

The City Council authorized the calling of the public hearing for the intention to issue Capital Equipment Plan Bonds and the Capital Improvement Plan for Fire Station #2 at its regular meeting of February 10, 2015.  This meeting was posted in the Anoka County Union as required.

Ehlers and Associates, the city's financial consultant, has prepared a Five-Year Capital Improvement Plan  (for GO CIP Bonding Projects only) for the years 2015-2019 which outlines the CIP planning process that is a requirement of the "CIP Act".  Stacie Kvilvang of Ehlers, will be present at the meeting to answer any questions related to the Five-Year Capital Improvement Plan, Capital Equipment Plan Bonds and the process forward.

It should be noted that the amount of the fire station project listed in the CIP document is higher-$4.2M than the bonded request amount of $3.97M.  The CIP amount is at a higher amount to account for any unforeseen costs, such as the bonds being sold at a premium.  You cannot bond for an amount higher than what is listed in the CIP document, so the higher amount included in the CIP is just a precautionary factor.

Alternative #1:  Motion to Adopt Resolution #15-03-062 authorizing approval of the issuance of GO Capital Improvement Plan Bonds in an amount not to exceed $4,200,000 and adopting the City of Ramsey Capital Improvement Plan  (for GO CIP Bonding Projects only) for the years 2015 through 2019.

Alternative #2:  Motion to not adopt Resolution #15-03-062 at this time

The issuance of Capital Improvement Debt will finance the construction of Fire Station #2.

Staff recommends alternative #1 as this is the authorization to issue debt with final approval of the acceptance of the bond sale terms at the regular City Council meeting of May 26, 2015.

Motion to approve Resolution #15-03-062 giving preliminary approval to the issuance of GO Capital Improvement Plan Bonds in an amount not to exceed $4.2M and adopting the City of Ramsey's Capital Improvement Plan (for GO CIP bonding projects only) for the Years 2015 through 2019.