November 16, 2011 City Commission Meeting

Announcements

• The City Council is preparing for a voter election on 📅 February 14th (or potentially February 7th) to approve proposed bond issues and a sales tax proposition.
• The deadline for filing necessary documents with the County Election Board is approximately 📅 December 14th (60 days prior to the election).
• A future meeting, likely 📅 December 5th, will be held to formally call for the election and approve the final bond documents.
• A subsequent meeting will be scheduled for final approval of the private placement note and refinancing, which will require a super majority (six "yes" votes) from the Council.

Key Decisions & Votes

Funding Capital Improvement Projects (Voter Election)

The Council discussed and provided direction to Bond Council and financial advisors regarding a package of Capital Improvement Projects (CIPs) proposed for a voter election in February. This action authorizes the advisors to finalize the legal documents for these propositions.

• Proposition 1 (Sales Tax): A half-penny sales tax for 10 years (starting 📅 July 1, 2012, ending 📅 June 30, 2022) to fund:
  • $2.5 million for an Expo Center.
  • $19 million for a Family Activity Park.
• Proposition 2 (General Obligation Bond): $3 million for a pool.
• Proposition 3 (General Obligation Bond): $3 million for Public Safety Communication Systems, including upgrades, remodeling and equipping a dispatch and Emergency Management Area, and radio tower improvements.
• Proposition 4 (General Obligation Bond): $13 million for Street Improvements, with specific projects (e.g., 45th Street, Kiapo) to be detailed further. At least 70% of the proceeds will be designated for specific projects.
• Proposition 5 (General Obligation Bond): $7 million for Economic and Community Development, including $5 million for economic development, $1 million for sidewalks, and $1 million for neighborhood redevelopment programs. This bond would have a maximum millage of 5 mills and an estimated term of 15 years (not to exceed 20 years on the ballot).
• Financial Impact: The total GO bond propositions amount to $26 million. Property tax projections indicate an increase for a $50,000 home from $513 (2010) to $536 (2013), peaking at $594 in 2017. The overall millage rate for GO bonds is projected to peak at 16.28 mills in 2017.
• Outcome: The Council ✅ Approved the motion to instruct Bond Council and financial advisors to continue finalizing documents for these proposed bond issues and sales tax proposition, based on the presented framework.

Issuance of Private Placement Note and Refinancing

The Council authorized staff and financial advisors to negotiate terms for a private placement note to fund existing capital projects and to refinance an existing debt.

• New Projects (💰 $3.25 million borrowing): Funded from the existing 1-cent sales tax, these projects include:
  • Expo parking lot and other improvements (partially funded by the County and Pottawatomie County Home Finance, which contributed $59,000).
  • RV electrical upgrades.
  • Comfort stations.
  • Library roof.
  • Airport track.
  • Cemetery building.
  • The Squad One apparatus, previously on the list, is already budgeted and will not require new borrowing.
• Refinancing Opportunity: The Council also approved refinancing an existing 1997 North Sewer System Improvement note, which has approximately five years remaining at an interest rate over 5%.
  • Refinancing this debt at current lower interest rates (estimated ~2.25% for the tax-exempt portion) is projected to generate Net Present Value Savings of approximately $38,000 over the remaining five-year term.
  • This refinancing will be combined with the new private placement note to optimize transaction costs.
• Debt Structure: The Expo Center improvements will be financed on a taxable basis (estimated ~3.5% interest) to allow for flexibility in private use agreements. The remaining new projects and the refinancing will be on a tax-exempt basis (estimated ~2.25% interest).
• Outcome: The Council ✅ Approved the motion to move forward with the $3.25 million private placement note for existing projects and the refinancing of the 1997 sewer system debt. Staff and financial advisors are authorized to negotiate terms and seek bids, with final approval requiring a subsequent Council vote.

Agenda Summary Table