FIN 2017-11-07 Item 2H - Public Safety Plan - Financing for Public Works Shops Facility

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City of Tukwila INFORMATIONAL MEMORANDUM TO: Finance Committee FROM: Peggy McCarthy, Finance Director CC: Mayor Ekberg DATE: November 1, 2017 SUBJECT: Financing for Public Safety Plan Public Works Shops Allan Ekberg, Mayor ISSUE Discuss the financing plan and timeline for acquisition of property for the Public Works shops. BACKGROUND At the July 25, 2016 Committee of the Whole meeting, the Public Works Shops financing was discussed in conjunction with the Public Safety Plan. As presented, the shops financing would be accomplished through the issuance of limited general obligation bonds (LTGO) with 50% of the debt service paid by the General Fund and 50% paid by the utility funds — consistent with anticipated usage. DISCUSSION The Public Safety Plan timeline, prepared by the Project Manager SOJ and based on the Berk financing model, has shown site acquisition for the shops occurring in the first quarter of 2018 at an estimated cost of $6 million. In recent weeks, a proposed site for the Public Works shops was selected and the estimated acquisition cost greatly exceeds the $6 million budget. Depending on several factors, up to $15 million may be needed as early as January 2018 to finance this acquisition. Options for accomplishing this financing on a short-term basis include interfund loans or a short-term bank loan and on a long term basis, issuance of 20 year LTGO bonds. To provide the most flexibility in selecting the optimal financing plan given the uncertainties, the City's bond counsel, Pacifica Law Group, will be drafting a bond ordinance that incorporates each of these financing options. The timeline for review and possible adoption follows: November 21 November 27 December 4 RECOMMENDATION For information only. Finance Committee Committee of the Whole Regular meeting Consider and discuss draft financing ordinance Review, consider and approve draft ordinance Adopt ordinance 159