HomeMy WebLinkAbout08/15/2012 8D AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
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SUBJECT: Ordinance No 5 providing Study Session Date August 8, 2012
for the issuance of LTGO Refunding Bonds COUNCIL MEETING Date August 15, 2012
for the Bremerton Government Center (Norm Department Finance Services
Dicks Budding) and delegating authority to Presenter Becky Hasart
the Director of Financial Services to approve Phone 360 -473 -5722
final terms of the bonds
SUMMARY: In 2003, the City was a partner with Kitsap County and Housing Kitsap in issuing bonds
for the purchase and development of the Bremerton Government Center, more commonly known as
the Nona Dicks Government Budding These bonds can begin to be redeemed on July 1, 2013
Based on the current favorable interest rates for municipal bonds, the City can choose to issue bonds
this year to be held in escrow for redemption beginning July 1, 2013
In addition to the favorable bond market for interest rates, it is in the City's best interest to be a small
issuer under the IRS code and designate the bonds as "Bank- Qualfed° To do so, we may issue no
more than $10 million in bonds in any given year This issue should be a little below $6 million The
City anticipates having to refinance its line of credit for its parking debt during 2013, which will be
approximately $9 million As such, the City would not be in a position to refund the government
center bonds in 2013, and retain the small issuer "Bank - Qualified" designation
The attached ordinance delegates to the Director of Financial Services the ability to set the date and
rates for the final sale of the government center bonds The ordinance sets the parameters under
which this can occur By doing this, the City can watch the market for any signs that the interest
rates are starting to climb If that were to happen, we can move quickly without being tied to a date
certain based on Council meeting schedules
ATTACHMENTS: Proposed Ordinance No S 111 providing for the issuance of LTGO Refunding
Bonds and delegating authority to the Director of Financial Services to approve final terms of the
bonds
Appendix A from the July 24, 2012 DA Davidson report to the Finance Committee
FISCAL IMPACTS (Include Budgeted Amount) The following numbers are estimates Final
amounts will be determined based on the interest rates set at time of sale and based on the bond
rating issued by Moody's (rating call is scheduled for August 17"') Estimates anticipate a total debt
savings of $1,320,706 over the life of the refunded bonds The present value of these savings (net of
Kitsap Housing's contribution of allocated City Reserve Fund) in today's dollars would be
approximately $741,718 (PV factor of 2 913 %) The refunded bonds would not extend the life of the
existing debt service, so debt service payments are within current budget authority
APPROVALS:
DEPARTMENT DIRECTOR
CITY ATTORNEY
FINANCE DIRECTOR
MAYOR
COh�iV1�� - r
RECOMMENDED MOTION:
Move to approve Ordinance No 5 of the City of Bremerton, Washington, relating to
contracting indebtedness, providing for the issuance of not to exceed $6,200,000 par value of Limited
Tax General Obligation Refunding Bonds, 2012, to refund the City's portion of the Kitsap County
Consolidated Housing Authority Revenue Bonds, 2003 (Bremerton Government Center), and
delegating authority to the Mayor or Director of Financial Services to approve the final terms of the
bonds
STUDY SESSION ACTION: ❑ Consent Agenda XG ral Business ❑ Public Hearing
COUNCIL PRESIDENT C(,
COUNCIL ACTION: [Approve ❑ Deny ❑ Table ❑ Continue ❑ No Action
Form Updated 4/18 /2011