HomeMy WebLinkAbout1998-10-12 Special MinutesTUKWILA CITY COUNCIL
October 12, 1998 9:45 p.m.
Council Chambers City Hall
CITY COIUNCIL SPECIAL MEETING MINUTES
CALL TO ORDER: Mayor Rants called the special meeting to order at 9:45 p.m.
ROLL CALL: Council President Pamela Linder, Councilmembers Joe Duffie, Joan Hernandez,
Steve Mullet, Pam Carter, Jim Haggerton, and Dave Fenton.
NEW BUSINESS:
AUTHORIZE THE PURCHASE OF THE 6300 BUILDING
Mayor Rants stated the issue at hand and indicated Council had been provided with a description
of the proposed purchase and a copy of the purchase and sale agreement.
Director Doerschel provided an overview on the financing details. The 1999 budget includes
$190,000 for rent along with an additional $130,000 in the C.I.P. The $130,000 was the old
debt service for City Hall, which has been paid off in the 202 Fund. Staff is proposing a 1/4%
increase of real estate excise tax for a total of 1/2% total City real estate excise tax. The City can
afford about $7 '/2 to $8 million in debt to pay for this. In addition to the $4 million for the
building, (including $200,000 for major repairs and a half a million for a parking lot) $3 million
would be available for proposed projects relating to economic development or the refurbishing of
Pacific Highway.
Staff is recommending the City secure a bond anticipation note of $4.5 million immediately to
purchase the building in December. This would be a temporary bond until the City determines
what the plans are for a resource center and other projects that the City may need to fund. After
funding determinations are made, the City would then elect to secure a bond issue to fund the
projects. Only one half of the $4.5 million can be used to purchase the building since one half of
the building is rented space. The City cannot secure tax exempt bonds for parts of the building
which is being rented out, and there is no likelihood that the City could justify an exception to
the rule.
The funding proposal includes allocating $2 million from the General Fund and $2 million from
the bond, which will finance the purchase of the building. The remaining $2.5 million from the
bond will be allocated to the 104 Arterial Street Fund to pay for repair and overlay for the next
two years. Ultimately, funding in the financial planning model for the street overlay program
would not be paid for from a bond issue. The sales tax that would have funded the Street
Overlay Program will replenish General Fund money that will be used to purchase the building.
City of Tukwila
City Council Special Meeting Minutes
Page 2 of 2
October 12, 1998
By 1999, all funding allocations will be corrected. This saves the City approximately $400,000
in interest.
Director Doerschel said it would cost the City approximately $325,000 per year for the $4
million. Building rent has not been included in the revenue projections.
McFarland reviewed critical timelines pertaining to the sale and indicated the City has 45 days to
complete the feasibility study. The City has 60 days for financing contingency and staff needs
approval by the Council on the basic offer tonight to move forward on the feasibility and
financing contingency studies. This will start the clock on the 45 -day period.
The city will be hiring a professional firm to conduct a building assessment that includes a
structural, HVAC system, electrical, and roof analysis.
Administrator McFarland said after the removal of contingencies on the contract, the transaction
will take approximately 15 days to close with an anticipated closing date no later than December
31, 1998. The building assessment will cost approximately $10,000.
Mayor Rants noted the seller will pay $30,000 and the City will pay $15,000 towards the real
estate commission.
The city will hire a building management firm to administer the leases and maintenance.
Moved by Linder, seconded by Duffle, to approve the agreement. The motion carried (7 -0).
ADJOURNMENT:
Moved by Mullet, seconded by Fenton, to adjourn the meeting at 9:54 p.m. Motion carried
(7 -0).
John V Rants, Mayor
421.,,t
Piciaosi 139L_
Robert H. Baker, Deputy City Clerk, for
Valerie Gow, Recording Secretary
Date Minutes Approved: /98