HomeMy WebLinkAboutCOW 2010-02-08 Item 3E - Ordinance - Refunding Bonds Issued by ValleyCom (Valley Communications Center Development Authority)Fund Source:
Comments:
Meeting Date
02/08/10
02/16/10
COUNCIL AGENDA SYNOPSIS
Prepared by May eviezv Council
SH
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Initials
ITEM INFORMATION
CAS NUMBER: 10-015
ORIGINAL AGENDA DATE: FEBRUARY 8, 2010
MTG. DATE RECORD OF COUNCIL. ACTION
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2/16/10
MTG. DATE ATTACHMENTS
2/8/10 Informational Memorandum dated 1/28/10
Ordinance in Draft Form
Projected Summary of Refunding Results
Minutes from the Finance and Safety Committee meeting of 2/2/10
ITEM No.
AGENDA ITEM TITLE An ordinance pledging the City's full faith and credit toward the payment of its share
of debt service on refunding bonds to be issued by the Valley Communications Center
Development Authority.
CATEGORY Discussion Motion Resolution Ordinance Bid Award Public Hearing Other
Mtg Date 2/8/10 Mtg Date Mtg Date Mtg Date 2/16/10 Mtg Date Mtg Date Mtg Date
1SPONSOR Council Mayor Adm Svcs DCD Finance Fire Legal 1 1 P&R 1 1 Police PWI
SPONSOR'S The Valley Communications (ValleyCom) Board of Directors (Admin Board) has authoirzed
SUMMARY the refunding of its series 2000 bonds. As a member City of ValleyCom, the City Council
must approve the refunding by adoption of an ordinance prior to the bond sale.
The Council is being asked to approve the ordinance providing for repayment of the new
refunding bonds, and authorize the Mayor to execute a continuing disclosure agreement.
REVIEWED BY COW Mtg. CA &P Cmte F &S Cmte Transportation Cmte
Utilities Cmte Arts Comm. 1 1 Parks Comm. Planning Comm.
DA'L'E: 2/2/10
RECOMMENDATIONS:
SPONSOR /ADMIN. Finance Department
COMMITTEE Unanimous approval; Forward to Committee of the Whole
COST IMPACT FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED
APPROPRIATION REQUIRED
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City of Tukwila
INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
Finance and Safety Committee
FROM: Shawn Hunstock, Finance Director
DATE: January 28, 2010
SUBJECT: Valley Communications Refunding Bond Ordinance
ISSUE
BACKGROUND
DISCUSSION
RECOMMENDATION
Jim Haggerton, Mayor
The Valley Communications (ValleyCom) Board of Directors (Admin Board) has
authorized the refunding of its series 2000 bonds. As a member City of ValleyCom, the
City Council must approve the refunding by adoption of an ordinance prior to the bond
sale.
The City of Tukwila and other ValleyCom members created the Valley Communications
Center Development Authority (Authority) in April of 2000 with the explicit intent to issue
bonds for the construction of an emergency dispatch center. The Authority issued
$12,758,000 in bonds and began construction soon thereafter with completion in 2002.
Debt service on the bonds is shared equally among the five ValleyCom cities. The
portion attributable to the City of Tukwila when the bonds were originally sold was
$2,551,600.
The purpose of the bond refunding is to capitalize on the relatively low interest rates
available in the bond market at this time. When originally sold, the bonds had an
average interest rate of 5.30 The average interest rate on the bond refunding is
projected to be 2.77
The refunding will result in a savings, net of bond issuance costs, of $389,613. The City
of Tukwila's share of that savings is 20 or $77,923. This savings will be realized
between now and 2015.
The Council is being asked to approve the ordinance providing for repayment of the
new refunding bonds, and authorize the Mayor to execute a continuing disclosure
agreement.
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INFORMATIONAL MEMO
Page 2
This item is scheduled to be discussed at the February 2, 2010 Finance and Safety
Committee meeting, the February 8 Committee of the Whole meeting, and the
February 16 Regular meeting.
ATTACHMENTS
Draft Ordinance
Summary of Refunding Results (Projected)
7 2 W:12010 InfoMemos \ValleyCommBondRefunding.docx
DRAFT
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, PLEDGING THE CITY'S FULL FAITH AND CREDIT TOWARD
THE PAYMENT OF ITS SHARE OF DEBT SERVICE ON REFUNDING BONDS TO
BE ISSUED BY THE VALLEY COMMUNICATIONS CENTER DEVELOPMENT
AUTHORITY AND APPROVING CERTAIN MATTERS RELATED THERETO;
PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, pursuant to Ordinance No. 1912, adopted by the City of Tukwila (the "City
on April 3, 2000, and Chapter 39.34 RCW, the Interlocal Cooperation Act, the City entered into
the Valley Communications Center Interlocal Agreement effective April 17, 2000 (the "Interlocal
Agreement with the City of Federal Way, the City of Renton, the City of Auburn, and the City
of Kent, Washington (together, the "Member Cities to reorganize a governmental
administrative agency known as the Valley Communications Center ("ValleyCom"); and
WHEREAS, the purpose of ValleyCom is to provide improved police, fire and medical aid
service communications within the boundaries of the existing, established consolidated service
area at a minimum cost to the Member Cities, together with such other governmental agencies
that have contracted with ValleyCom for communication services; and
WHEREAS, in order to address increased growth and to provide necessary services for the
Member Cities and other governmental agencies that contract with ValleyCom for
communication services, ValleyCom constructed a new dispatch facility known as the Valley
Communications Center (the "Facility"); and
WHEREAS, financing for the construction, equipping and improvement of the Facility was
provided by bonds issued by the Valley Communications Center Development Authority (the
"Authority"), a public development authority chartered by the City of Kent, pursuant to RCW
35.21.730 through 35.21.755; and
WHEREAS, pursuant to the Interlocal Agreement, each Member City has agreed to
contribute to the financing of the costs of the Facility, each Member City paying 20% of the total
cost of development, less contributions from grants, other agencies or other sources; and
WHEREAS, the Authority issued its Valley Communications Center Development
Authority Bonds, 2000 (Valley Communications Center Project in King County, Washington)
(the "2000 Bonds dated September 15, 2000, in the original aggregate principal amount of
$12,758,000; and
WHEREAS, it appears that the 2000 Bonds may now be refunded at lower interest rates
through the issuance of refunding bonds of the Authority, thereby yielding savings to the
Authority and the Member Cities;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. City Contributions to Bonds. Pursuant to the terms of the Interlocal Agreement,
the City hereby irrevocably commits to pay its share, which shall be equal to 20 of the debt
service on bonds (the "Bonds issued by the Authority for the purpose of defeasing and
refunding all or a portion of the 2000 Bonds. The City recognizes that it is not obligated to pay
the share of any other Member City; the City's obligation shall be limited to its 20% allocable
share of debt service on such Bonds; all such payments shall be made by the City without
regard to the payment or lack thereof by any other jurisdiction; and the City shall be obligated
to budget for and pay its 20% allocable share. All payments with respect to the Bonds shall be
made to ValleyCom in its capacity as administrator and servicer of the Bonds to be issued by
the Authority. The City's obligation to pay its 20% allocable share shall be an irrevocable full
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Page 1 of 2
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faith and credit obligation of the City, payable from property taxes levied within the
constitutional and statutory authority provided without a vote of the electors of the City on all
of the taxable property within the City and other sources of revenues available therefor. The
City hereby obligates itself and commits to budget for and pay its 20% allocable share and to set
aside and include in its calculation of outstanding non -voted general obligation indebtedness an
amount equal to the principal component of its 20% allocable share for so long as any Bonds
remain outstanding.
Section 2. Compliance with Continuing Disclosure Requirements and Official
Statement. To the extent necessary to meet the conditions of paragraph (d)(2) of United States
Securities and Exchange Commission Rule 15c2 -12 (the "Rule the Mayor is hereby authorized
to execute and deliver a continuing disclosure agreement or certificate in order to assist the
underwriter for the Bonds in complying with the Rule. The Mayor is further authorized to ratify
and approve the information pertaining to the City and contained in the preliminary and final
official statements delivered in connection with the Bonds for purposes of the Rule.
Section 3. Allocation for Purposes of Bank Qualification. For purposes of
Section 265(b)(3)(C)(iii) of the Internal Revenue Code of 1986, as amended (the "Code the
City hereby agrees that the amount of each issue of obligations of the Authority shall be
allocated in equal shares among each of the Member Cities.
Section 4. Tax Covenant. The City hereby agrees that it shall not:
1. Make any use of the proceeds from the sale of Bonds or any other money or
obligations of the Authority or the Member Cities that may be deemed to be proceeds of the
Bonds pursuant to Section 148(a) of the Code that will cause the Bonds to be "arbitrage bonds"
within the meaning of said Section and said regulations, or
2. Act or fail to act in a manner that will cause the Bonds to be considered obligations
not described in Section 103(a) of the Code.
Section 5. General Authorization; Prior Acts.
A. The Mayor and Finance Director of the City and each of the other appropriate officers,
agents and representatives of the City are each hereby authorized and directed to take such
steps, to do such other acts and things, and to execute such letters, certificates, agreements,
papers, financing statements, assignments or instruments as in their judgment may be
necessary, appropriate or desirable to carry out the terms and provisions of, and complete the
transactions contemplated by, this ordinance.
B. All acts taken pursuant to the authority of this ordinance but prior to its effective date
are hereby ratified and confirmed.
Section 6. Severability. If any section, subsection, paragraph, sentence, clause or phrase of
this ordinance or its application to any person or situation should be held to be invalid or
unconstitutional for any reason by a court of competent jurisdiction, such invalidity or
unconstitutionality shall not affect the validity or constitutionality of the remaining portions of
this ordinance or its application to any other person or situation.
Section 7. Effective Date. This ordinance or a summary thereof shall be published in the
official newspaper of the City, and shall take effect and be in full force five days after passage
and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a
Regular Meeting there of this day of 2010.
ATTEST/ AUTHENTICATED:
Christy O'Flaherty, CMC, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
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Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
Page 2 of 2
SUMMARY OF REFUNDING RESULTS
Valley Communications Center Development Authority
Refunding of 2000 General Obligation Bonds
Assumes Insured BQ Interest Rates
Dated Date 03/01/2010
Delivery Date 03/01/2010
Arbitrage yield 2.116664%
Escrow yield 0.239190%
Bond Par Amount 5,585,000.00
True Interest Cost 2.340253%
Net Interest Cost 2.189691%
Average Coupon 2.766841%
Average Life 3.718
Par amount of refunded bonds 5,345,000.00
Average coupon of refunded bonds 5.511594%
Average life of refunded bonds 3.843
PV of prior debt to 03/01/2010 2.116664% 6,078,976.59
Net PV Savings 371,314.25
Percentage savings of refunded bonds 6.946946%
Percentage savings of refunding bonds 6.648420%
Dec 14, 2009 12:37 pm Prepared by Seattle- Northwest Securities Corp.
(k: \Valley Conununications :VALLCOM- REFOO,REF00) Page 1
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Date
Prior Refunding
Debt Service Debt Service
06/01/2010 144,200.00 36,300.00 107,900.00 107,333.52
12/01/2010 144,200.00 202,600.00 58,400.00 49,500.00 57,485.02
06/01/2011 144,200.00 71,300.00 72,900.00 71,006.35
12/01/2011 1,109,200.00 1,116,300.00 7,100.00 65,800.00 6,843.15
06/01/2012 120,075.00 60,850.00 59,225.00 56,484.66
12/01/2012 1,130,075.00 1,120,850.00 9,225.00 68,450.00 8,706.02
06/01/2013 94,825.00 50,250.00 44,575.00 41,626.75
12/01/2013 1,194,825.00 1,170,250.00 24,575.00 69,150.00 22,709.24
06/01/2014 65,262.50 33,450.00 31,812.50 29,089.40
12/01/2014 1,170,262.50 1,133,450.00 36,812.50 68,625.00 33,308.89
06/01/2015 33,493.75 16,950.00 16,543.75 14,812.44
12/01/2015 1,198,493.75 1,146,950.00 51,543.75 68,087.50 45,666.38
Net PV Savings
Dec 14, 2009 12:37 pin Prepared by Seattle- Northwest Securities Corp.
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SAVINGS
Valley Communications Center Development Authority
Refunding of 2000 General Obligation Bonds
Assumes Insured BQ Interest Rates
Savings
Present Value
Annual to 03/01/2010
Savings 2.1166639%
6,549,112.50 6,159,500.00 389,612.50 389,612.50 366,415.49
Savings Summary
PV of savings from cash flow
Plus: Refunding funds on hand
366,415.49
4,898.76
371,314.25
(k: \Valley Conununications :VALLCOM- REFOO,REF00) Page 2
Sources:
Refunding Escrow Deposits:
Cash Deposit
SLGS Purchases
Uses:
Dated Date 03/01/2010
Delivery Date 03/01/2010
Bond Proceeds:
Par Amount 5,585,000.00
Premium 164, 518.10
Delivery Date Expenses:
Cost of Issuance
Underwriter's Discount
Bond Insurance (Est. 0.60
Other Uses of Funds:
Additional Proceeds 4,898.76
Dec 14, 2009 12:37 pm Prepared by Seattle Northwest Securities Corp.
SOURCES AND USES OF FUNDS
Valley Communications Center Development Authority
Refunding of 2000 General Obligation Bonds
Assumes Insured BQ Interest Rates
5,749,518.10
1.34
5,623,481.00
5,623,482.34
39,500.00
44,680.00
36,957.00
121,137.00
5,749,518.10
(k: \Valley Counnunications :VALLCOM- REFOO,REF00) Page 3
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Bond Component
Serial Bonds:
Production
Underwriter's Discount
Purchase Price
Accrued Interest
Dec 14, 2009 12:37 pm Prepared by Seattle- Northwest Securities Corp.
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BOND PRICING
Valley Communications Center Development Authority
Refunding of 2000 General Obligation Bonds
Assumes Insured BQ Interest Rates
Maturity Premium
Date Amount Rate Yield Price Discount)
12/01/2010 130,000 2.000% 0.880% 100.834 1,084.20
12/01/2011 1,045,000 2.000% 1.160% 101.450 15,152.50
12/01/2012 1,060,000 2.000% 1.390% 101.639 17,373.40
12/01/2013 1,120,000 3.000% 1.660% 104.850 54,320.00
12/01/2014 1,100,000 3.000% 2.060% 104.230 46,530.00
12/01/2015 1,130,000 3.000% 2.500% 102.660 30,058.00
5,585,000 164,518.10
Dated Date 03/01/2010
Delivery Date 03/01/2010
First Coupon 06/01/2010
Par Amount 5,585,000.00
Premium 164,518.10
Net Proceeds 5,704,838.10
5,749,518.10 102.945714%
44,680.00 0.800000%
5,704,838.10 102.145714%
(k: \Valley Communications :VALLCOM- REFOO,REF00) Page 4
Period
Ending
BOND DEBT SERVICE
Valley Communications Center Development Authority
Refunding of 2000 General Obligation Bonds
Assumes Insured BQ Interest Rates
Principal
Dated Date 03/01/2010
Delivery Date 03/01/2010
06/01/2010 36,300 36,300
12/01/2010 130,000 2.000% 72,600 202,600 238,900
06/01/2011 71,300 71,300
12/01/2011 1,045,000 2.000% 71,300 1,116,300 1,187,600
06/01/2012 60,850 60,850
12/01/2012 1,060,000 2.000% 60,850 1,120,850 1,181,700
06/01/2013 50,250 50,250
12/01/2013 1,120,000 3.000% 50,250 1,170,250 1,220,500
06/01/2014 33,450 33,450
12/01/2014 1,100,000 3.000% 33,450 1,133,450 1,166,900
06/01/2015 16,950 16,950
12/01/2015 1,130,000 3.000% 16,950 1,146,950 1,163,900
Dec 14, 2009 12:37 pm Prepared by Seattle- Northwest Securities Corp.
Annual
Debt Debt
Coupon Interest Service Service
5,585,000 574,500 6,159,500 6,159,500
(k: \Valley Conununications :VALLCOM- REFOO,REF00) Page 5
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I. PRESENTATIONS
No presentations.
FINANCE AND SAFETY COMMITTEE
Meeting Minutes
February 2, 2010 5:00 p.m.; Conference Room #3
City of Tukwila
Finance and Safety Committee
PRESENT
Councilmembers: De' Sean Quinn, Chair; Allan Ekberg and Kathy Hougardy
Staff: Dave Haynes, Mary Miotke, Jack Pace, Brandon Miles, Nick Olivas, Shawn Hunstock, Peggy
McCarthy, Jennifer Ferrer- Santalnes, Steve Lancaster and Kimberly Matej
CALL TO ORDER: Chair Quinn called the meeting to order at 5:06 p.m.
II. BUSINESS AGENDA
A. Grant Award: Energy Undates to City Facilities
Staff is seeking full Council acceptance of a grant award from the Washington State Department of
Commerce for energy upgrades to City facilities.
The grant award amount is $129,000, and requires a $10,000 match which can be a mixture of cash and
labor. The City match will be funded through the green initiatives budget line item in the Mayor's Office.
Grant funding will only cover a portion of the energy upgrades at the City facilities listed below.
Additional funding is anticipated to be secured via rebates through providers such as Puget Sound Energy
and Seattle City Light. Projects listed below are listed in order of priority.
City Hall and 6300 Building
o Retrofit Fixtures
o Install Occupancy Sensors
Fort Dent Park
o Parking Lot Light Fixtures
Tukwila Community Center
o Parking Lot Light Fixtures
UNANIMOUS APPROVAL. FORWARD TO FEBRUARY 8 COW FOR DISCUSSION.
B. Valley Communications Center Bond Ordinance
Staff is seeking full Council adoption of an ordinance that provides for the repayment of new refunding
bonds as a member city of Valley Communications (ValleyCom), and for authorization for the Mayor to
execute a continuing disclosure statement.
In 2000, bonds were issued to construct the ValleyCom Emergency Dispatch Center. In order to capitalize
on low interest rates currently available, the bonds can be refunded. This action will save the City of
Tukwila an estimated $77,923 between now and 2015. There is a bond issuance cost associated with the
refunding, but still results in a savings. UNANIMOUS APPROVAL. FORWARD TO FEBRUARY 8
COW FOR DISCUSSION.
C. Utility Billing Refunds and Back Bill Policy
As an information only item, staff reported on a new policy that will be implemented regarding utility
service billing refunds and back bills.
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