HomeMy WebLinkAboutFS 2012-11-06 Item 2D - Discussion - Metropolitan Park District BondCity of Tukwila_
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
FROM:
DATE:
SUBJECT
ISSUE
Mayor Haggerton
Finance and Safety Committee
Peggy McCarthy, Finance Director
November 1, 2012
Bond Issuance for Metropolitan Park District
Approve the proposed financing method and schedule for funding the Tukwila Metropolitan Park
District (MPD) capital improvements.
BACKGROUND
The MPD is beginning a major capital project to renovate the Tukwila pool, its primary asset.
Financing options have been researched and presented to the MPD Board of Commissioners
for consideration over the past months. At the October 15, 2012 MPD meeting, approval was
received from the Board to move forward with a bond issuance by the MPD with a City
guarantee.
Subsequent to the October 15 meeting, the City guarantee was discussed with Alice Ostdiek of
Foster Pepper PLLC, the bond counsel for the City and the MPD. A recent ruling by the
Washington Supreme Court concerning a debt guarantee by the City of Wenatchee concluded
in part that, "public guarantee of debt is legally equivalent to a public debt." Ms. Ostdiek pointed
out that, should the bonds be issued by the City on behalf of the MPD, the issuance would have
the advantage of the City's credit rating.
DISCUSSION
The City has two options for assisting the MPD with the capital improvement financing. The first
option, the option that has been discussed previously, is for the MPD to issue bonds with a City
guarantee; the terms of the guarantee would be documented in an interlocal agreement
between the City and the MPD. The other option is to have the City issue the bonds, loan the
bond proceeds to the MPD, then have the MPD pay back the loan in amounts equal to the debt
service on the bonds. This essentially would be a pass through of the debt to the MPD by the
City. The terms of the loan and repayment would be documented in an interlocal agreement
between the MPD and the City.
The second option is recommended because it is more straight forward, and it ensures the
City's credit rating will be fully considered in pricing the bonds. If the bonds are to be issued in
2012, the following schedule must be met:
39
INFORMATIONAL MEMO
Page 2
Council C.O.W. Meeting, November 13th
Council Regular Meeting November 19
MPD Meeting November 19
Council C.O.W. Meeting, November 26
Council Meeting December 3rd Regular
December 18 or 19
December 31
FINANCIAL IMPACT
No net financial impact to the City.
RECOMMENDATION
Consider the financing interlocal agreement
Approve the financing interlocal agreement
Approve the financing interlocal agreement
Consider the bond ordinance
Approve the bond ordinance
Bond pricing
Bond closing
The Finance and Safety Committee is being asked to approve the proposed financing structure
and schedule for funding the Metropolitan Park District capital improvements.
40 W.12012 Info Memos- CouncillMPD debt Am