HomeMy WebLinkAboutCOW 2014-08-25 COMPLETE AGENDA PACKETTukwila City Council Agenda
• COMMITTEE OF THE WHOLE ❖
Op Jim Haggerton, Mayor Councilmembers + Joe Duffie + Dennis Robertson
-9 David Cline, CityAdministrator + Allan Ekberg + Verna Seal
De'Sean Quinn, Council President + Kathy Hougardy + Kate Kruller
Monday, August 25, 2014, 7:00 PM Tukwila City Hall Council Chambers
1. CALL TO ORDER / PLEDGE OF ALLEGIANCE
2. CITIZEN COMMENT
At this time, you are invited to comment on items not included on this agenda
is
(p /ease limit your comments to five minutes per citizen). To comment
on an item listed on this agenda, please save your comments until the issue
presented for discussion.
3. PUBLIC HEARINGS
a. Review and update of five of Tukwila's Comprehensive Plan Elements:
- Roles and Responsibilities
- Community Image
- Parks
- Economic Development
- Tukwila South
This periodic review is required by the Washington State Growth
Management Act.
P /ease bring your Comprehensive P /an binder, Q
b. Two ordinances relating to the rezone of two properties on the
south side of South 180th Street at Andover Park West. These
properties were not included in the Southcenter Plan boundary,
and a rezone is needed to re- designate the properties to match the
adjacent properties to the south. Quasi judicial
(1) Amending the Zoning Map for certain real property from Tukwila
Urban Center to Heavy Industrial with a Tukwila South Overlay.
(2) Amending the Comprehensive Land Use Map for certain real
property from Tukwila Urban Center to Heavy Industrial.
Pg.1
Pg.3
4. SPECIAL ISSUES
a. Review and update of five of Tukwila's Comprehensive Plan Elements:
- Roles and Responsibilities
- Community Image
- Parks
- Economic Development
- Tukwila South
b. Two ordinances relating to the rezone of two properties on the
south side of South 180th Street at Andover Park West. These
properties were not included in the Southcenter Plan boundary,
and a rezone is needed to re- designate the properties to match the
adjacent properties to the south. Quasi judicial
(1) Amending the Zoning Map for certain real property from Tukwila
Urban Center to Heavy Industrial with a Tukwila South Overlay.
(2) Amending the Comprehensive Land Use Map for certain real
property from Tukwila Urban Center to Heavy Industrial.
Pg.1
Pg.3
(continued...)
COMMITTEE OF THE WHOLE MEETING
Monday, August 25, 2014
Page 2
4. SPECIAL ISSUES
(cont.)
c. Financial policies:
(1) A resolution adopting revised financial policies.
(2) A resolution establishing a debt policy.
d. A resolution adopting a financing plan for the Urban Renewal Tukwila
International Boulevard (TIB) Redevelopment Project.
Pg.19
Pg.41
5. REPORTS
a. Mayor
b. City Council
c. Staff
d. City Attorney
e. Intergovernmental
6. MISCELLANEOUS
7. EXECUTIVE SESSION
8. ADJOURNMENT
Tukwila City Hall is wheelchair accessible.
Reasonable accommodations are available at public hearings with advance notice to the
City Clerk's Office (206- 433 -1800 or TukwilaCityClerk @TukwilaWA.gov). This notice is available at
www,tukwilawa,gov, and in alternate formats with advance notice for those with disabilities.
Tukwila Council meetings are audio /video taped.
HOW TO TESTIFY
If you would like to address the Council, please go to the podium and state your name and address clearly for
the record. Please observe the basic rules of courtesy when speaking and limit your comments to five
minutes. The Council appreciates hearing from citizens but may not be able to take immediate action on
comments received until they are referred to a Committee or discussed under New Business.
COUNCIL MEETINGS
No Council meetings are scheduled on the 5th Monday of the month unless prior public notification is given.
Regular Meetings - The Mayor, elected by the people to a four -year term, presides at all Regular Council
Meetings held on the 1st and 3rd Mondays of each month at 7:00 p.m. Official Council action in the
form of formal motions, adopting of resolutions and passing of ordinances can only be taken at Regular
Council meetings.
Committee of the Whole Meetings - Council members are elected for a four -year term. The Council
President is elected by the Council members to preside at all Committee of the Whole meetings for a
one -year term. Committee of the Whole meetings are held the 2nd and 4th Mondays at 7:00 p.m.
Issues discussed are forwarded to the Regular Council meeting for official action.
GENERAL INFORMATION
At each Council meeting citizens are given the opportunity to address the Council on items that are not
included on the agenda during CITIZENS COMMENTS. Please limit your comments to 5 minutes.
Special Meetings may be called at any time with proper public notice. Procedures followed are the same as
those used in Regular Council meetings.
Executive Sessions may be called to inform the Council of pending legal action, financial, or personnel
matters.
PUBLIC HEARINGS
Public Hearings are required by law before the Council can take action on matters affecting the public interest
such as land -use laws, annexations, rezone requests, public safety issues, etc. Section 2.04.150 of the
Tukwila Municipal Code states the following guidelines for Public Hearings:
1. The proponent shall speak first and is allowed 15 minutes for a presentation.
2. The opponent is then allowed 15 minutes to make a presentation.
3. Each side is then allowed 5 minutes for rebuttal.
4. Citizens who wish to address the Council may speak for 5 minutes each. No one may speak a second
time until everyone wishing to speak has spoken.
5. After each speaker has spoken, the Council may question the speaker. Each speaker can respond to the
question, but may not engage in further debate at this time.
6. After the Public Hearing is closed and during the Council meeting, the Council may choose to discuss
the issue among themselves, or defer the discussion to a future Council meeting, without further public
testimony. Council action may only be taken during Regular or Special Meetings.
COUNCIL AGENDA SYNOPSIS
A/leafing k)cde
Prepared
Mayor's review
0)100 repiew
08/11/14
NG
Motion
Alt,t; Date
E] Resolution
Altgl)ate
08/25/14
CO i
I ub/ic 1 1edri,i
jj Other
A ftp 1)ate
i'ill,g Date
ItI .1g Date 8/25/14
Si' ( )NA )R Counci/ fl Mayor / IR DCI) EJ Finance EJ I Ire , P&R Po/Ice P//
The City is conducting its periodic review and update of its Comprehensive Plan as required
Si Imm,\Ry by the Washington Growth Management Act. The Planning Commission has completed its
review of the elements to be considered in 2014, and has forwarded its recommendations
on the Roles and Responsibilities, Community Image, Parks, Economic Development and
Tukwila South Elements to the City Council for action. The Council is being asked to hold a
public hearing, review, revise and adopt the updated Elements.
Riwinyvv1) BY E COW Mtg. E CA&P Cmte E 1 &S Crnte 11 Transportation Cmte
E Utilities Cmte Arts Comm. [I] Parks Comm, 0 Planning Comm.
DATE: : MNIITTEE CI {AIR:
RECOMMENDATIONS:
Si ( )NS( >It /Aimt
0 )mmtyrkr
I N. Department of Community Development
No Committee Review
ITEM INFORMATION
ITEM No.
3.A. &
4.A.
STAN," Si' )N( )R: NORA GIERLOFF
ORI(ANAI, AGNNt),\ Dxiv,: 8/11/14
AG1,1\11.),1 ITEM TITLE 2014 Comprehensive Plan Amendments
c.vilv,( )1(y Discussion
8/11/14
Motion
Alt,t; Date
E] Resolution
Altgl)ate
LI OrIincme
Aft g Date
B,d A ard
Alt 1)atr,
I ub/ic 1 1edri,i
jj Other
A ftp 1)ate
i'ill,g Date
ItI .1g Date 8/25/14
Si' ( )NA )R Counci/ fl Mayor / IR DCI) EJ Finance EJ I Ire , P&R Po/Ice P//
The City is conducting its periodic review and update of its Comprehensive Plan as required
Si Imm,\Ry by the Washington Growth Management Act. The Planning Commission has completed its
review of the elements to be considered in 2014, and has forwarded its recommendations
on the Roles and Responsibilities, Community Image, Parks, Economic Development and
Tukwila South Elements to the City Council for action. The Council is being asked to hold a
public hearing, review, revise and adopt the updated Elements.
Riwinyvv1) BY E COW Mtg. E CA&P Cmte E 1 &S Crnte 11 Transportation Cmte
E Utilities Cmte Arts Comm. [I] Parks Comm, 0 Planning Comm.
DATE: : MNIITTEE CI {AIR:
RECOMMENDATIONS:
Si ( )NS( >It /Aimt
0 )mmtyrkr
I N. Department of Community Development
No Committee Review
COST IMPACT / FUND SOURCE
Exi)I,NDITI IRE RI,;(),(JIRE1) AMOUNT B . . ;ETE APPROF'RIATION REQUIRED
$ $
Fund Source:
Comments:
MTG. DATE
RECORD OF COUNCIL ACTION
8/11/14
Forward to 8/25/14 Public Hearing
MTG. DATE
ATTACHMENTS
8/11/14
Informational Memorandum dated 8/4/14
*Please bring your Comprehensive Plan Binder*
8/25/14
*Please bring your Comprehensive Plan Binder*
2
COUNCIL AGENDA SYNOPSIS
Meekg1.1)ate
Prepared 125
Mayor's revpdr'"
C'(ilin17/ -epiew
08/25/14
NG
o n
i‘ IA 1)ale
()rdznant'
,iward
\ 1i 1 )aI
Publi c I leanq
ilicr
Alil),iie
ALN1)rile 8/25/14
Aht Dale 8/25/14
Si' ( r \N )R ( offlhil 11/1,0 or 1 IR OCO l'Iname El 1 lie E IT 111 1-V7R. E l'oli,c E i>i
:[)()\,m)ie, The intent of this rezone is to fix an inconsistency created by the adoption of a new
St \IM \M. subarea plan and zoning for the Southcenter area. The two subject properties are zoned
TUC but were not included in the Southcenter Plan boundary at the property owner's
request. The Council is asked to approve a map amendment to re-designate the properties
as Heavy Industrial to match the zoning of the adjacent properties to the south.
1 \ II \xi I liY COW Mtg. :A&I) Cmte El l'ekS Cinte EI Transportation Cmte
Utilities Cnite 0 Arts Comm. E l'arl;',, Comm. E planning ( omm.
1).11 l'..: COMMUTE:I CI LAIR: NONE - QUASI-JUDICIAL
RECOMMENDATIONS:
Si ( r\s( dt/Amiry
(()\1\111-111
Department of Community Development
COST IMPACT / FUND SOURCE
ITEM INFORMATION
ITEM No.
3.B. &
4.B.
3
S i \l 1 SP( )N,( )R- NORA GIERLOFF
1 61\, \J. z d ND 1 ) \ I 1 : 8/2 / 4
Acd N1) \ 111 \I T I Rezone at S. 180th Street and Andover Park West
c: \ 1 1 u ( )R 1111 0/1(i/rim/
A //r; 1),ile
Moho)/
AN / >ate
o n
i‘ IA 1)ale
()rdznant'
,iward
\ 1i 1 )aI
Publi c I leanq
ilicr
Alil),iie
ALN1)rile 8/25/14
Aht Dale 8/25/14
Si' ( r \N )R ( offlhil 11/1,0 or 1 IR OCO l'Iname El 1 lie E IT 111 1-V7R. E l'oli,c E i>i
:[)()\,m)ie, The intent of this rezone is to fix an inconsistency created by the adoption of a new
St \IM \M. subarea plan and zoning for the Southcenter area. The two subject properties are zoned
TUC but were not included in the Southcenter Plan boundary at the property owner's
request. The Council is asked to approve a map amendment to re-designate the properties
as Heavy Industrial to match the zoning of the adjacent properties to the south.
1 \ II \xi I liY COW Mtg. :A&I) Cmte El l'ekS Cinte EI Transportation Cmte
Utilities Cnite 0 Arts Comm. E l'arl;',, Comm. E planning ( omm.
1).11 l'..: COMMUTE:I CI LAIR: NONE - QUASI-JUDICIAL
RECOMMENDATIONS:
Si ( r\s( dt/Amiry
(()\1\111-111
Department of Community Development
COST IMPACT / FUND SOURCE
F\pf \ DI I I 'RI RI (.21'ilti D AMOUNT BUDGETED APPROPRIATION REV TIRED
Fund Source:
CommetiLs:
MTG. DATE
RECORD OF COUNCIL ACTION
8/25/14
MTG. DATE
ATTACHMENTS
8/25/14
Informational Memorandum dated 8/12/14
Ordinance in Draft Form Amending the Zoning Map
Ordinance in Draft Form Amending the Comprehensive P an Map
3
4
11111.111111011,11
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Tukwila City Council
FROM: Jack Pace, DCD Director
BY: Nora Gierloff, Deputy DCD Director
DATE: August 12, 2014
SUBJECT: Rezone at S. 180th Street and Andover Park West
ISSUE
Should two properties zoned Tukwila Urban Center (TUC) but not included in the Southcenter
Plan be rezoned to Heavy Industrial (HI)?
BACKGROUND
The intent of this rezone is to fix an inconsistency created by the adoption of a new subarea
plan and zoning for the Southcenter area. In June of 2014 the City Council adopted the
Southcenter Plan (formerly known as the Tukwila Urban Center Plan). Two properties just south
of 180th Street owned by Sega le Properties, LLC are zoned Tukwila Urban Center. However,
these properties were not included in the Southcenter Plan boundary at the property owner's
request.
The parcels are developed as an internet data center and an office building and the new zoning
would not create any Zoning non-conformities. The TUC zoning classification is not applicable
now and a map amendment is needed to re-designate the properties as Heavy Industrial to match
the zoning of the adjacent properties to the south under the same ownership. The existing Tukwila
South Overlay would remain as the parcels are included in the Tukwila South Master Plan.
DISCUSSION
The proposed change requires a quasi-judicial Type 5 rezone process. This means that it has not
gone to a Council Committee. DCD is processing this as a city-initiated change and has
scheduled the hearing on August 25th, to coincide with the other 2014 Comprehensive Plan
updates.
FINANCIAL FINANCIAL IMPACT
None
RECOMMENDATION
The Council is being asked to hold a public hearing on the ordinances amending the Zoning and
Comprehensive Plan maps and approve this item at the October 6, 2014 Regular Meeting.
ATTACHMENTS
A. Draft Ordinance Amending the Zoning Code Map
B. Draft Ordinance Amending the Comprehensive Plan Map
5
6
Attachment A
Amending Zoning Map
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AMENDING THE ZONING MAP FOR
CERTAIN REAL PROPERTY LOCATED AT 6101 S. 180TH STREET
AND AT 18000 ANDOVER PARK WEST, TUKWILA, WASHINGTON,
FROM TUKWILA URBAN CENTER (TUC) TO HEAVY INDUSTRIAL
(HI) WITH A TUKWILA SOUTH OVERLAY (TSO); PROVIDING FOR
SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, in 1995 the City of Tukwila adopted the Zoning Code and Map based
on consideration of existing conditions and Tong -term community goals and since these
documents may be reviewed and updated as appropriate; and
WHEREAS, at the request of the property owner the subject properties were not
included in the Southcenter Plan and therefore do not fall under the new Tukwila Urban
Center (TUC) zoning regulations; and
WHEREAS, the existing development on the subject properties is consistent with
the purposes and regulations of the adjacent Heavy Industrial Zone and Tukwila South
Overlay; and
WHEREAS, on August 11, 2014, Tukwila held a public meeting regarding proposed
changes to the Comprehensive Land Use Map and Zoning Map; and
WHEREAS, the City of Tukwila has complied with the requirements of the State
Environmental Policy Act; and
WHEREAS, on August 25, 2014, the City Council held a public hearing and, after
receiving and studying staff analysis and comments from the public, has determined the
public interest will be best served by amending the Zoning Map designation; and
WHEREAS, on August 26, 2014, the Zoning Map change was determined to have
no significant environmental impact; and
WHEREAS, notices of public meetings and public hearings were published in The
Seattle Times, posted on site and mailed to surrounding properties;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
W: Word Processing \Ordinances\Zoning Map amended for property on S 180th & on APW 8 -8 -14
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Page 1 of 2
7
Section 1. Findings and Conclusions Adopted. The City Council hereby adopts
the Findings and Conclusions attached hereto as Exhibit 1.
Section 2. Re- designation Approved. The properties located at 6101 S. 180th
Street (tax parcel 352304 -9120) and at 18000 Andover Park West (tax parcel 352304-
9055) are hereby approved to be re- designated from Tukwila Urban Center (TUC) to
Heavy Industrial (HI), with the Tukwila South Overlay (TSO) to remain, as shown on
Exhibit 2.
Section 3. Map Amendment Authorized. The Community Development Director
or his designee is hereby authorized to amend the City's official Zoning Map to show
this change in designation.
Section 4. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section /subsection numbering.
Section 5. 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 6. 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 thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel Turpin, Assistant City Attorney
Attachments:
Exhibit 1 — Findings and Conclusions
Exhibit 2 — Revised Zoning Map
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
W: Word Processing \Ordinances\Zoning Map amended for property on S 180th & on APW 8 -8 -14
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8
Page 2 of 2
Exhibit 1
Findings and Conclusions — File L14 -0049
ZONING AMENDMENT CRITERIA (TMC SECTION 18.84.030)
I
Each determination granting a rezone shall be supported by written findings and conclusions
showing specifically wherein all of the following conditions exist:
(1) That the propoed amendment to the Zoning Map is consistent with the goals, objectives,
and policies of the Comprehensive Plan;
The proposed change to HI with a TSO would match the zoning and Comprehensive
Plan designations of the adjacent properties to the south. While no immediate change
is proposed, or expected to the existing development on site, the parcels could be part
of future redevelopment envisioned under the Tukwila South Master Plan. The Tukwila
South Element of the Comprehensive Plan is currently under review to bring it up to
date with the Tukwila South annexation, Development Agreement, Tukwila South
Master Plan and Sensitive Area Master Plan.
(2) That the proposed amendment to the Zoning Map is consistent with the scope and
purpose of this title and the description and purpose of the zone classification applied for;
The two affected properties would shift to the adjacent HI district and remain covered
by the Tukwila South Overlay. The existing uses on site would continue to be permitted
under the proposed zoning and no non - conformities would be created. Per TMC
Section 18.41.010, "As an overlay district the Tukwila South Overlay (TSO) may be
applied by the City Council to any property lying within the Comprehensive Plan's
Tukwila South Master Plan Area." The parcels are included in the Master Plan Area
per Ordinance No. 2233.
(3)
That there are changed conditions since the previous zoning became effective to warrant
the proposed amendment to the Zoning Map; and
The Southcenter Plan and revised TUC zoning districts were adopted by the City
Council in February of 2014. At the property owner's request the two subject properties
had not been included in the Southcenter Plan; therefore the parcels are not within the
new zoning district and are not subject to the revised TUC subdistrict zoning
regulations. The existing TSO supersedes the underlying zoning district, but an
underlying zone is still needed in case the overlay was ever removed.
(4) That the proposed amendment to the Zoning Map will be in the interest of furtherance of
the public health, safety, comfort, convenience and general welfare, and will not adversely
affect the surrounding neighborhood, nor be injurious to other properties in the vicinity in
which the subject property is located.
The proposed change to HI with a TSO would resolve an inconsistency in the Zoning
Map for two properties that have TUC zoning but are not regulated under the
Southcenter Plan and TUC subdistrict regulations. No change of use, additional
construction or intensification is proposed as part of this rezone.
Zoning Map Page 1 of 2
9
Findings and Conclusions — File L14 -0049 (continued)
CONCLUSIONS
(1) That the proposed amendment to the Zoning Map is consistent with the goals, objectives,
and policies of the Comprehensive Plan;
7Jhe proposed change to HI with a TSO would facilitate redevelopment consistent with
that envisioned under the Tukwila South Element of the Comprehensive Plan. The
parcels are included in the Tukwila South Master Plan Area per Ordinance No. 2233.
I I
(2) That the proposed amendment to the Zoning Map is consistent with the scope and
purpose of this title and the description and purpose of the zone classification applied for;
The two affected properties would shift to the adjacent HI district and remain covered
by the Tukwila South Overlay. The existing uses on site would continue to be permitted
under the proposed zoning and no non - conformities would be created.
(3) That there are changed conditions since the previous zoning became effective to warrant
the proposed amendment to the Zoning Map; and
When the Southcenter Plan and revised TUC zoning districts were adopted, the two
subject properties were left without underlying zoning. While the existing TSO
supersedes the underlying zoning district, an underlying zone is still needed in case the
overlay was ever removed.
(4) That the proposed amendment to the Zoning Map will be in the interest of furtherance of
the public health, safety, comfort, convenience and general welfare, and will not adversely
affect the surrounding neighborhood, nor be injurious to other properties in the vicinity in
which the subject property is located.
No change of use, additional construction or intensification is proposed as part of this
rezone. There should be no external indications of a change and so no adverse
effects.
Zoning Map Page 2 of 2
10
Revised Zoning Map
Exhibit 2
n an nve
5 180th Street
3523 4 126
City of Tukwila
Rezone/Comp Plan Amendment
L14-0049
Southcenter Plan Boundary
Subject Properties - TUC to HI
11
12
Attachment B
Amending Comprehensive Land Use Map
i
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, AMENDING THE COMPREHENSIVE
LAND USE MAP FOR CERTAIN REAL PROPERTY LOCATED
AT 6101 S. 180TH STREET AND AT 18000 ANDOVER PARK
WEST, TUKWILA, WASHINGTON, FROM TUKWILA URBAN
CENTER (TUC) TO' HEAVY INDUSTRIAL (HI); PROVIDING FOR
SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, in 1995 the City of Tukwila adopted the Comprehensive Land Use
Plan and Map based on consideration of existing conditions and long -term community
goals and since these documents may be reviewed and updated as appropriate
pursuant to RCW 36.70; and
WHEREAS, at the request of the property owner the subject properties were not
included in the Southcenter Plan and therefore do not fall under the new Tukwila Urban
Center (TUC) zoning regulations; and
WHEREAS, the existing development on the subject properties is consistent with
the purposes and regulations of the adjacent Heavy Industrial District; and
WHEREAS, on August 11, 2014, Tukwila held a public meeting regarding proposed
changes to the Comprehensive Land Use Map and Zoning Map; and
WHEREAS, the City of Tukwila has complied with the requirements of the State
Environmental Policy Act; and
WHEREAS, on August 25, 2014, the City Council held a public hearing and, after
receiving and studying staff analysis and comments from the public, has determined the
public interest will be best served by amending the Comprehensive Land Use Map
designation; and
WHEREAS, on August 26, 2014, the Comprehensive Land Use Map change was
determined to have no significant environmental impact; and
WHEREAS, notices of public meetings and public hearings were published in The
Seattle Times, posted on site and mailed to surrounding properties;
W: Word Processing \Ordinances \Comp Land Use Map amended for property on S 180th & on APW 8 -8 -14
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13
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
Section 1. Findings and Conclusions Adopted. The City Council hereby adopts
the Findings and Conclusions attached hereto as Exhibit 1.
Section 2. Re- designatidn Approved. The properties located at 6101 S. 1 180th
Street (tax parcel 352304 -9120) and at 18000 Andover Park West (tax parcel 352304-
9055) are hereby approved to be re- designated from Tukwila Urban Center (TUC) to
Hbavy Industrial (HI), as shown on Exhibit 2.
Section 3. Map Amendment Authorized. The Community Development Director
or his designee is hereby authorized to amend the iCity's official Comprehensive Land
Use Map to show this change in designation.
Section 4. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section /subsection numbering.
Section 5. 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 6. 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 thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Rachel Turpin, Assistant City Attorney
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
Attachments:
Exhibit 1 — Findings and Conclusions
Exhibit 2 — Revised Comprehensive Land Use Map
W: Word Processing \Ordinances \Comp Land Use Map amended for property on S 180th & on APW 8 -8 -14
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14
Exhibit 1
Findings and Conclusions — File L14 -0049
COMPREHENSIVE PLAN CRITERIA
(1) Is the issue already adequately addressed in the Comprehensive Plan? If the issue is not
addressed in the Comprehensive Plan, is there a public need for the proposed change?
The need for the proposed change was created when the Southcenter Plan and revised
TUC zoning districts were adopted by the City Council in February of 2014. At the
property owner's request the two subject properties had not been included in the
Southcenter Plan; therefore the parcels are not within the new zoning district and are
not subject to the revised TUC subdistrict zoning regulations.
While the existing TSO supersedes the underlying zoning district, an underlying zone is
still needed in case the overlay was ever removed. The proposed change to HI would
match the zoning and Comprehensive Plan designations of the adjacent properties to
the south. The proposed change to the Comprehensive Plan designation is needed to
retain consistency with the Zoning Map.
(2) Is the proposed change the best means for meeting the identified public need?
The Tukwila South Element of the Comprehensive Plan is currently under review to
bring it up to date with the Tukwila South annexation, Development Agreement, Tukwila
South Master Plan and Sensitive Area Master Plan. The parcels are included in the
Master Plan Area per Ordinance No. 2233. The proposed change of these parcels to
HI would match the zoning and Comprehensive Plan designations of the adjacent
properties to the south. The existing uses on site would continue to be permitted under
the proposed zoning and no non - conformities would be created.
(3) Will the proposed change result in a net benefit to the community?
The two affected properties would shift to the adjacent HI designation. The proposed
change would resolve an inconsistency in the Zoning and Comprehensive Land Use
Maps for two properties that have TUC designations but are not regulated under the
Southcenter Plan and TUC subdistrict regulations. While no immediate change is
proposed or expected to the existing development on site, the parcels could be part of
future redevelopment envisioned under the Tukwila South Master Plan.
Comprehensive Land Use Map Page 1 of 2
15
Findings and Conclusions — File L14 -0049 (continued)
CONCLUSIONS
I I
(1) Is the issue already adequately addressed in the Comprehensive Plan? If the issue is not
addressed in the Comprehensive Plan, is there a public need for the proposed change?
The proposed change to the Comprehensive Plan designation is needed to retain
consistency with the Zoning Map. The need for the proposed change was created
when the Southcenter Plan and revised TUC zoning districts were adopted by the City
Council in February of 2014. The parcels are not within the new TUC zoning district
and are not subject to the revised TUC subdistrict zoning regulations. The proposed
change to HI would match the zoning and Comprehensive Plan designations of the
adjacent properties to the south.
(2) Is the proposed change the best means for meeting the identified public need?
The rezone and re- designation of these parcels is being done in concert with the
update of the Tukwila South Element of the Comprehensive Plan, which is currently
under review to bring it up to date with the Tukwila South annexation, Development
Agreement, Tukwila South Master Plan and Sensitive Area Master Plan. The proposed
change of these parcels to HI would match the zoning and Comprehensive Plan
designations of the adjacent properties to the south. The existing uses on site would
continue to be permitted under the proposed zoning and no non - conformities would be
created.
(3) Will the proposed change result in a net benefit to the community?
The proposed change to the adjacent HI district would resolve an inconsistency in the
Zoning and Comprehensive Land Use Maps for two properties that have TUC
designations but are not regulated under the Southcenter Plan and TUC subdistrict
regulations. While no immediate change is proposed or expected to the existing
development on site, the parcels could be part of future redevelopment envisioned
under the Tukwila South Master Plan.
Comprehensive Land Use Map Page 2 of 2
16
Revised Comprehensive Land Use Map
Exhibit 2
TUG
1/44.117kive '
-
vTUC
Oth Street
352:304,612
/
3523049055
HI
City of Tukwila
Rezone/Comp Plan Amendment
1_14-0049
Southcenter Plan Boundary
/77/4 Subject Properties - TUC to HI
17
18
COUNCIL AGENDA SYNOPSIS
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ITEM INFORMATION
ITEM No.
4.C.
19
',1 \I i ,`,1,c)\,,,()R PEGGY MCCARTHY
to restate financial
adopting debt policy
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08/25/14
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resolution
planning model and general financial policies
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Sr( 0\ ,,( /10, Approve resolution restating financial planning model and general financial policies and
Sti\t\t \io removing policies related to debt and fund balance. A new fund balance policy was
approved in October 2012. Approve resolution adopting a new debt policy.
RI \ !I \\ 1 1)111 (()\\ \J fl (.\&I' ( lnh H I'Luk OM( 1 nin,portation Crntc
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1 )X11 08/19/14 ComNit rill , (,I1Allt SEAL
RECOMMENDATIONS:
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Finance
1 Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
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MTG. DATE
RECORD OF COUNCIL ACTION
8/25/14
.
MTG. DATE
ATTACHMENTS
08/25/14
Informational Memorandum dated 08/13/14 (Updated after FS meeting)
Resolution in Draft Form restating fin planning model & general financial policies
Attachment to resolution in strike-through underline format
Draft esolution adopting debt policy
Draft debt policy
Minutes from the Finance and Safety Committee Meeting of 08 9 4
09/02/14
19
20
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
BY: Vicky Carlsen, Deputy Finance Director
DATE: August 13, 2014
SUBJECT: Resolutions adopting policies related to the debt, the financial planning
model, and general financial policies
(Modified after FS meeting, see new paragraph on page 2)
ISSUE
Approve Resolution adopting policies related to the financial planning model and other general
financial policies. Approve Resolution adopting debt policies.
BACKGROUND
In September 2005, the City Council approved Resolution No. 1586 adopting policies related to
debt, the financial planning model, and policies of a general financial nature.
The policies in the resolution are incorporated in the City's budget document and the financial
planning model and capital improvement document.
In October 2012, the City Council approved Resolution No. 1774 adopting a reserve policy to
maintain an adequate fund balance allowing mitigation of risks to revenues,
DISCUSSION
There are two resolutions the City Council is being asked to approve.
Resolution #1
This resolution restates Resolution No. 1586 by removing the policies related to debt and the
policy related to fund balances. The debt policies have been rewritten as a stand-alone debt
policy and will be approved in the resolution that follows this one. The fund balance policy that is
being removed from this resolution was already approved in a new reserve policy adopted by the
Council in October 2012 by Resolution No, 1774.
Until the remaining financial planning model and general financial policies can be reviewed and
updated as needed, they are being restated in this resolution with minor adjustments that update
the names of schedules and statements currently utilized by the City for financial planning
purposes. The attachment for the resolution is shown in strike-out underline format to easily see
the original attachment and the changes that are being recommended.
Resolution #2
This resolution will adopt a new debt policy. The policy outlines the purpose, type, and use of
debt, responsibilities of certain City officials, methods of bond sales including when refundings
could occur, structural elements of debt, and the use of professionals and other service providers
for debt related matters.
21
INFORMATIONAL MEMO
Page 2
f"t e r inanOe a d ftt; a testys,„ En ittee me et nt„.1„„„„„. tvvo rev s ts, vve re tit, Et, E.! to the. De' bit Polio y
draft to clarify ciect.i.sistrt - riteria for is.s, Li ta X a ble or tax exte„Er!.,sel debt ,..3nd to clarify
cond (.„..)rt, S. LI ride: r lchsh rittter En de yt„be ISS . e e (tit, a rstEtutt,,,,,,,„ a re (Jot:, erlted 11 St r ke-
t rottah t„Ind Ettriine to r rr, at onpgg..ps and 2 t he Ft 0 iftty draft..
RECOMMENDATION
Council is being asked to approve both resolutions and consider these items at the
August 25, 2014 Committee of the Whole meeting and subsequent September 2, 2014 Regular
Meeting.
ATTACHMENTS
Draft Resolution restating financial planning model and other general financial policies
Attachment to resolution restating financial planning model and other general financial policies in
strike-through underline format
Draft Resolution adopting debt policy
Draft Debt Policy
22
RAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF TUKWILA, WASHINGTON, ADOPTING UPDATED
POLICIES RELATED TO THE FINANCIAL PLANNING
MODEL AND OTHER GENERAL FINANCIAL POLICIES;
AND REPEALING RESOLUTION NO. 1586.
WHEREAS, the City Council and Mayor are committed to high standards of
financial management; and
WHEREAS, adopting and periodically updating and revising financial policies are
important steps toward ensuring consistent and rational financial management; and
WHEREAS, policies related to the Financial Planning Model and other general
financial policies are essential components of an overall financial management policy;
and
WHEREAS, it is the responsibility of the City Council of the City of Tukwila to
provide policy direction through the passage of motions and ordinances, adoption of
resolutions, and final approval of the budget; and
WHEREAS, the City desires to enact the City's Debt Policy as a stand-alone policy;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Financial policies related to the Financial Planning Model and policies
of a general nature, as evidenced in Exhibit A, are adopted.
Section 2. The financial policies related to the Financial Planning Model and other
general financial policies shall be reviewed on a regular basis and updated as
necessary.
Section 3. Repealer. Resolution No. 1586 is hereby repealed.
VVAVVord Processing \Financial Planning Model policies and other general financial policies 8-8-14
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Page 1 of 2
23
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of , 2014.
ATTEST/AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Rachel Turpin, Assistant City Attorney
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Attachment:
Exhibit A — Financial Planning Model Policies and Other General Financial Policies
VV:\Word Proce ng\Financial Planning Model policies and other general financial policies 8-8-14
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Page 2 of 2
Debt- Ro4-i-oies
City of Tukwila
-
EXHIBIT A
&fling toh--,(-R-GIN--3&,a6-)-establishes-the
legal •- -oitie& Spec- ifical-ly,---t-his---R-CW----p-rovides--that----debt--ca-nhot-be
ihouFred--44--exoess-of-the-fo-liowing--p-eroentages. of -the value-of-the-taxab-le-property
of--th-e---C-ity4,5-9,45---w-ithout---a--v-ote--of--the-pe-optei--2,-5%--with- a- vote of-the--peoplei
OSVe, with---a--vote---of-the--peopteriacov-ided--the--ihd ebtedhe-s-s--i e-x-oess-of -2,5%
of-the-people-,---pfovided---the---i-hdebted-hess-1-h-e-xoess
e---deve-lotarne.ht,
As-am . ptHetan-ojections-would--
Pfief-4-0- issuing—any---1-ong-trm-bends, the----Admihistration---- -must
a-piar-oved--b -th-e-Gity--Go-u- -noit:-
p-raotioa-[-oc-fiscai-limitations-, .e. abt -to---repay--b-orrowed--funds,
t
potent4at-bonthssues-shatt-be--con-sidefeci,
Policy. DP-3 --F-i-soal-Poli-oy-for 4a-rg-e-llevelopmeras. To-be--determine-d--,
G-.---Ge hef-a.1--Debt-
Poky-DP 4 The-Gity-iNiti be-cognizant- of the
us -by-r-atihg-age.hoi-es--to
ASSeSSCRe-Fit-Debt-(Lflay-shall-be-considefed-as-an----altemative-to
GeheFat-Debt
consequences,
Page 1 of 4
25
Financial Planning Model Policies
The six-year "Financial Planning Model and Capital Improvement Program" is the primary
financial policy document. It represents the culmination of all financial policies.
Revenues
Policy FP-1: Revenues will be estimated on a conservative basis. Increases
greater than inflation in the schedule known as "Attachment A," tota4-Revenues and
Expenditures Governmental Funds, will require additional documentation.
Policy FP-2: Major revenue sources will require explanation in the document known
as_"Attachment A-1," Notes to Revenues, Expenditures and Fund Balance.
Operating ons & Maintenance Expenditures
Policy FP-3: Expenditures for the General Fund operations (schedule known as
"Attachment B," General Fund Operating_ons & Maintenance-Expenditures) will only
include basic inflationary increases at the beginning of the budget preparation
process. Proposed increases in programs or personnel will require an issues and
options paper and Council approval before being added to the operating ons-A
maintenance-expend itures estimate.
Capital Expenditures
Policy FP-4: Project capital grants with local matching requirements can only be
applied for with express approval by the City Council. Grant applications shall be
made only for projects listed in the six-year Capital Improvement Program.
Policy FP-5: If the proposed grants or mitigation are either not funded or are
reduced, the respective project will be reevaluated on the basis of its value and
priority level placement in the Capital Improvement Program.
Policy FP-6: The financing of limited benefit capital improvements (i.e. private
development) should be borne by the primary beneficiaries of the improvement.
The principle underlying limited benefit is that the property is peculiarly benefited
and therefore the owners do not in fact pay anything in excess of what they receive
by reason of such improvement.
Page 2 of 4
26
Financial Planning Model Policies (continued)
F-ti 4-Balances
Tile -General. Fund. 441- maintain- a -designated.-$4,1-00,0G0--tRa4-n-y--Day
.F-uncr-bata.nce-that-is-no-t-i-n-cf.uded-in-Attac4ment-AT-Totat-R-eve-n-u- -es-&--Expenciiture-s,
•••••••••,••••••••••••assure-a-mum-eash
flow-scenano--the-Aceurnutated--Totais--within-the-Si-x--Year--Pianning--Model--may--not
reeede-below-the-$3,090-,-0-G0--in-Attaehment-AT-Total-Revenues Expnd-itures-,
-Pelt • •-E-P 8- if -G.-amp-liar-ice- with- F-P-7- is--at- ris-k; th-e
p-r-oyide-a-list-of-revenue-optionsseryiee-leyettp-rograni-redtletions-er--eapital-pcojeet
defec-rais--fo-r-city--Couneit consideration,
Enterprise Funds
Policy FP-9 7: Each Enterprise Fund shall be reviewed annually and it must have a
rate structure adequate to meet its operations and maintenance and long-term
capital requirements.
Policy FP-10 8: Rate increases shall be small, applied frequently, and staggered to
avoid an overly burdensome increase and undue impact in any given year.
Policy FP-11 9: Rate increases of external agencies (i.e. King County secondary
wastewater treatment fees) will be passed through to the users of the utility.
Other General Financial Policies
Policy GF-1: The City's various user charges and fees shall be reviewed at least every
three years for proposed adjustments based on services provided and comparisons with
other jurisdictions.
Policy GF-2: The Finance Director shall provide a financial status update at least
quarterly.
Policy GF-3: Budget amendments during the year may be approved by budget motion
until the end of the budget year, at which time a formal comprehensive budget
amendment is submitted.
Page 3 of 4
27
Policy:-GF4 ----IRteffun-d-loaas--wilf-be-permissi,be if pfa-ctical, Inteiest-rafes-will-be
computed based-on the annual aveage of the State Investment Pool earnings rate
Policy GF-5 4: The City shall, whenever practical and advantageous, take advantage of
grants, loans, or other external financial sources. With the exception of capital
improvement program grants requiring a local match, staff shall report to and seek the
approval of the appropriate Council Committee before finalizing the grant.
Page 4 of 4
28
Ft
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ADOPTING A DEBT POLICY
AND PROVIDING FOR APPROPRIATE MANAGEMENT OF
DEBT ISSUED BY THE CITY OF TUKWILA.
WHEREAS, a debt policy and appropriate management of debt issued by the City
is an important factor in measuring the City's financial performance and condition; and
WHEREAS, proper use and management of borrowing can yield significant
advantages; and
WHEREAS, the use of debt is a mechanism to equalize costs of needed
improvements to both present and future citizens; and
WHEREAS, it is the responsibility of the City Council of the City of Tukwila to
provide policy direction through the passage of motions and ordinances, adoption of
resolutions, and final approval of the budget; and
WHEREAS, a debt policy establishes the purpose, type, and use of debt;
responsibilities of various City officials; method of sale of bonds; refundings (bonds or
notes); structural elements; credit objective; and the use of professional and other
service providers;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. The debt policy dated August 2014, attached hereto as "Exhibit A," is
hereby adopted by this reference as if set forth in full.
Section 2. The debt policy shall be reviewed on a regular basis and updated as
necessary.
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PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Rachel Turpin, Assistant City Attorney
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Attachment: Exhibit A, City of Tukwila Debt Policy dated August 2014
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Page 2 of 2
EXHIBIT A
CITY OF TUKWILA DEBT POLICY
A debt policy and appropriate management of debt issued by the City of Tukwila (the "City ") is an
important factor in measuring its financial performance and condition. Proper use and management of
borrowing can yield significant advantages. From a policy perspective, the City uses debt as a
mechanism to equalize the costs of needed improvements to both present and future citizens.
SECTION 1. PURPOSE, TYPE AND USE OF DEBT
In the issuance and management of debt, the City shall comply with the Washington State
constitution and with all other applicable legal requirements imposed by federal, state and local
laws, rules and regulations. Approval from the City Council (the "Council ") is required prior to the
issuance of all debt. Long -term debt will only be used for improvements that cannot be financed
from current revenues or to fulfill the purposes set forth in the first paragraph of this Debt Policy
(the "Policy ").
Long -term debt will not be issued prior to reviewing the impact on the Six Year Financial
Planning Model and its policy guidelines. When both tax exempt and taxable debt is under
consideration, priority will be given to issuing the tax exempt debt, unless °the 'vise justified.
Limited Tax General Obligation (LTGO) Bonds. The City is authorized to sell LTGO bonds
under RCW 39.36.020, subject to the approval of the Council. LTGO bonds will be issued only if:
(1) a project requires funding not available from alternative sources; (2) the project has a useful life
longer than five years, and the Council determines it is appropriate to spread the cost over that useful
life, to achieve intergenerational equity, so those benefiting will also be the ones paying; (3) matching
money is available which may be lost if not applied for in a timely manner; or (4) emergency
conditions exist as determined by the Council. LTGO (non- voted) debt of the City shall not
exceed an aggregate total of 1.5 percent of the City's assessed value of taxable property within
the City.
Unlimited Tax General Obligation (UTGO) Bonds. The City is authorized to sell UTGO
bonds under RCW 39.36.020, subject to the approval of the Council, and subject to voter approval.
UTGO debt will be used for capital purposes when the use of an excess tax levy is necessary for
debt service payments. No combination of UTGO (voter approved) debt and LTGO debt of the
City shall exceed an aggregate total of: (a) 2.5 percent of the City's assessed value of the taxable
property within the City for general purposes; (b) 2.5 percent of the City's assessed value of the
taxable property within the City for parks, open spaces and capital facilities associated with
economic development; and (c) 2.5 percent of the City's assessed value of the taxable property
within the City for utility purposes.
Revenue Bonds. The City is authorized to sell revenue bonds under RCW 35.41.030, subject to
the approval of the Council. Revenue bonds will be issued to finance the acquisition, construction
or improvements to facilities of enterprise systems operated by the City, in accordance with a
system and plan of improvements. The enterprise system must be legally authorized for operation
by the City. There are no legal limits to the amount of revenue bonds the City can issue, but the
City will not incur revenue obligations without first ensuring the ability of an enterprise system
to meet all pledges and covenants customarily required by investors in such obligations during the
term of the obligation.
1
31
Local Improvement District Bonds. The City is authorized to sell local improvement district
(special assessment) bonds ( "LID bonds ") under RCW 35.45.010, subject to the approval of the
Council. LID bonds are issued to finance projects that will provide special benefit to certain
property owners. The specially benefiting property owners are levied an assessment, based upon a
formula developed to fairly reflect the benefit received by each property owner in the local
improvement district. After consideration and review, the City may form local improvement
districts upon petition of benefiting property owner(s), unless the Council determines to establish
such districts by resolution, pursuant to statutory authority. LIDs for utility improvements may be
authorized as ULIDs, which may be financed through issuance of Revenue Bonds.
Lease Purchase Financing. Lease purchase financing may be used when the cost of borrowing or
other factors make it in the City's best interest.
Short -Term Debt. The City is authorized to incur short-term debt under chapter 39.50 RCW,
subject to the approval of the Council. Short -term debt may be issued to meet: (1) the immediate
financing needs of a project for which long -term financing has been identified and is likely
; t1fe€l-or secured but not yet received; or (2) cash flow needs within authorized budgets and
anticipated receipts for the budget year.
The Finance Director is authorized to make loans from one City fund to another City fund for periods
not exceeding twelve months. The Finance Director or designee is required to assure that the loaning
fund will have adequate cash balances to continue to meet current expenses after the loan is made and
until repayment from the receiving fund. All interfund short-term borrowing will bear interest based
upon prevailing Local Government Investment Pool rates.
SECTION 2. RESPONSIBILITIES
The primary responsibility for debt management rests with the City's Finance Director.
The Finance Director shall (or shall cause the following to occur):
• Provide for the issuance of debt at the lowest cost and risk;
• Determine the available debt capacity;
• Provide for the issuance of debt at appropriate intervals and in reasonable amounts as
required to fund approved projects;
• Recommend to the Council the manner of sale of debt;
• Monitor opportunities to refund debt and recommend such refunding as appropriate;
• Comply with all Internal Revenue Service (IRS), Securities and Exchange Commission (SEC)
and Municipal Securities Rulemaking Board (MSRB) rules and regulations governing the
issuance of debt pursuant to the City's Post Issuance Compliance Policy;
• Provide information for and participate in the preparation and review of bond offering or
disclosure documents;
• Comply with all terns, conditions and disclosures required by Ordinances governing the
debt issued;
• Submit to the Council all recommendations to issue debt;
• Distribute to appropriate repositories, such as the EMMA repository managed by the Municipal
Securities Rulemaking Board, information regarding financial condition and affairs at such
times and in the form required by contract, regulation and general practice, including Rule
2
32
15c2 -12 regarding continuing disclosure;
• Provide for the distribution of pertinent information to rating agencies;
• Coordinate and lead presentations to rating agencies, when appropriate;
• Maintain a database with all outstanding debt;
• Apply and promote prudent fiscal practices;
• Select a qualified financial advisor with experience in municipal finance in Washington, and
registered with the SEC and MSRB as a "municipal advisor," and
• Account for and pay all bonded indebtedness for the City , by specifically providing for the
timely payment of principal of and interest on all debt; and ensuring that the fiscal agent
receives funds for payment of debt service on or before the payment date.
The Council shall:
• Approve the Debt Policy;
• Approve indebtedness;
• Approve budgets sufficient to provide for the timely payment of principal and interest on debt;
• Determine the most appropriate financing plan for proposed debt, based on recommendation
from the Finance Director, upon advice of the City's financial advisor; and
• By Ordinance, delegate broad or limited authority to the Finance Director relative to execution
of a financing plan approved by the Council.
SECTION 3: METHOD OF SALE OF BONDS
Competitive Sale. The Finance Director may, upon the advice of the City's financial advisor,
submit to the Council a recommendation to sell debt on a competitive bid basis. City debt issued
on a competitive bid basis will be sold to the bidder proposing the lowest true interest cost to the
City. Such bid may take the form of electronically transmitted offers to purchase the bonds.
Negotiated Sale. The Finance Director may, upon the advice of the City's financial advisor,
submit to the Council a recommendation to sell debt on a negotiated basis. If debt is sold on a
negotiated basis, the negotiations of terms and conditions shall include, but not be limited to,
prices, interest rates, redemption provisions and underwriting compensation. The Finance Director,
with the assistance of its financial advisor, shall evaluate the terms offered by the underwriter
including comparison of terms with prevailing terms and conditions in the marketplace for
comparable issues. If more than one underwriter is included in the negotiated sale of debt, the
Finance Director shall establish appropriate levels of liability, participation and priority of orders
and, with the assistance of its financial advisor, oversee the bond allocation process.
Private or Direct Placement. When deemed appropriate to minimize the direct or indirect costs
and risks of a debt issue, the Finance Director will, upon the advice of the City's financial advisor,
submit to the Council a request to incur debt issue through a private placement or direct bank
placement.
SECTION 4. REFUNDING BONDS OR NOTES
Refundings will be conducted in accordance with chapter 39.53 RCW. Unless otherwise justified,
the City will refinance debt to either achieve debt service savings as market opportunities arise, or to
3
33
eliminate restrictive covenants.
Unless otherwise justified, an "advance refunding" transaction will require a present value savings
of five percent of the principal amount of the debt being refunded. In addition to the savings, any
determination to refund debt should take into consideration all costs and negative arbitrage in the
refunding escrow.
A "current refunding" transaction will require present value savings in an amount or percentage to
be determined by the Finance Director based upon the advice of the City's financial advisor.
SECTION 5. STRUCTURAL ELEMENTS
Maturity Term. The City shall issue debt with an average life less than or equal to the average
life of the assets being financed. Unless otherwise stated in law, the final maturity of the debt shall
be no longer than 40 years (RCW 39.46.1 10).
Debt Service Structure. Unless otherwise justified and deemed necessary, debt service should be
structured on a level annual basis. Refunding bonds should be structured to produce debt service
savings as determined by the Finance Director, based upon the advice of the City's financial
advisor, to be in the best interest of the City. Unless specifically justified and deemed necessary,
debt shall not have capitalized interest. If appropriate, debt service reserve funds may be used for
revenue bonds.
Maturity Structure. The City's long -term debt may include serial and term bonds. Unless
otherwise justified, term bonds should be sold with mandatory sinking fund requirements.
Price Structure. The City's long -term debt may include par, discount and premium bonds.
Discount and premium bonds must be demonstrated to be advantageous relative to par bond
structures, given applicable market conditions and the City's financing goals.
Interest Payments. Unless otherwise justified and deemed necessary, long -term debt will bear
interest payable semiannually.
Redemption Features. For each transaction, the City shall evaluate the costs and benefits of
call provisions.
Capitalization. Debt service reserves may be capitalized for enterprise activities only. Costs of
issuance may be capitalized for all debt. Interest costs may be capitalized upon the advice of the
City's financial advisor for any type of debt.
Bond Insurance. The City may evaluate the costs and benefits of bond insurance or other credit
enhancements. Any credit enhancement purchased by the City shall be competitively procured
unless otherwise justified.
Tax - exemption. Unless otherwise justified and deemed necessary, the City shall issue its debt on
a tax - exempt basis. Taxable debt may be justified based on a need for flexibility in use of
proceeds, or when expected to reduce burdens relative to IRS rules.
SECTION 6. CREDIT OBJECTIVE
34
4
The City shall seek to maintain and improve its bond rating or ratings, as applicable.
SECTION 7. USE OF PROFESSIONALS AND OTHER SERVICE PROVIDERS
Bond Counsel. All debt issued by the City will include a written opinion by bond counsel
affirming that the City is authorized to issue the debt, and that all statutory requirements have
been met. The bond counsel opinion and other documents relating to the issuance of debt will
be prepared by nationally recognized bond counsel with extensive experience in public finance
and tax issues. Bond counsel will be appointed by the Finance Director consistent with the
City's general authority to contract. .
Financial Advisor. The Finance Director will appoint a financial advisor for each debt issue, or
for a specified term, consistent with the City's general authority to contract. The financial advisor
shall be nationally recognized, have comprehensive municipal debt experience, including debt
structuring and pricing of municipal securities, be registered as a "municipal advisor" with the
MSRB and SEC, and have knowledge of State laws relating to City finances. The City
financial advisor is to be available for general purposes, and will assist the City with all financing
issues. In no case shall the financial advisor serve as underwriter for the City's debt issues.
Underwriter. The Finance Director in consultation with the City's financial advisor will select
an underwriter for any negotiated sale of bonds. The selection of an underwriter may be for an
individual bond issue, series of financings or a specified time period, as determined by the
Finance Director. Depending upon the nature and amount of each financing, the Finance Director
is authorized, in consultation with the City's financial advisor, to appoint more than one
underwriter for each financing and to designate one underwriting firm as the managing
underwriter.
Other Service Providers. Professional services such as verification agent, escrow agent or
rebate analyst shall be appointed by the Finance Director in consultation with the City's
financial advisor and/or bond counsel.
Other City Policies and Procedures. The City shall comply with its Post- Issuance Tax
Compliance Policy, and shall provide the appropriate department heads and staff with educational
opportunities to ensure they are aware of requirements that may pertain to bond financed facilities
and assets relating to their duties.
SECTION 8. POST- ISSUANCE COMPLIANCE PROCEDURES
Continuing Disclosure Obligations for All Bonds
Purpose. At the time of issuance of any Bonds, regardless of tax status, the City is required to
enter into a Continuing Disclosure Undertaking ( "Undertaking ") in order to allow the
underwriter of the Bonds to comply with Securities and Exchange ( "SEC ") Rule 15(c)2 -12. The
Undertaking is a contract between the City and the underwriter in which the City agrees to
provide certain information to an "information repository" operated by the Municipal Securities
Rulemaking Board ( "MSRB ") to ensure investors have access to annual updates and related
events that occur during the year.
5
35
Responsibility for Undertaking. The Finance Director is responsible for negotiating the terms of
and complying with each of the City's Undertakings. The Finance Director will negotiate the
terms of the Undertaking at the time of each bond issuance, with a goal of meeting the
requirements of Rule 15(c)2 -12, without undue burden on the City. The Finance Director will
strive to ensure that each Undertaking is similar to prior Undertakings to the extent possible, to
simplify future compliance.
Compliance with Undertaking. The Finance Director will have responsibility for ensuring
compliance with each Undertaking, which activities may be delegated to staff within the finance
department. This will require certain annual filings, by a set due date, as well as periodic filings
as certain specified events arise. Filings are to be made through the Electronic Municipal Market
Access ( "EMMA ") portal, managed by the MSRB. The Finance Director is responsible for
knowing the terms of the City's Undertakings, and ensuring appropriate staff within the finance
department and other departments of the City are aware of the events that may require a filing.
Certification of Compliance. At the time of each subsequent bond issue, the Finance Director is
responsible for reviewing all prior compliance, and providing a statement as to that prior
compliance, as required by Rule 15(c)2 -12. Each official statement will include a statement that
describes compliance (or non - compliance) with each prior undertaking, which statement will be
certified by the Finance Director.
Compliance Relating to Tax Exempt Bonds
Purpose. The purpose of these post- issuance compliance procedures ( "Compliance Procedures ")
for tax - exempt bonds and other obligations issued by the City for which federal tax exemption is
provided by the Internal Revenue Code of 1986, as amended (the "Code "), is to facilitate
compliance by the City with the applicable requirements of the Code that must be satisfied after
the issue date of the bonds to maintain the tax exemption for the bonds after the issue date.
Responsibility for Monitoring Post - Issuance Tax Compliance. The City Council of the City has
the overall, final responsibility for monitoring whether the City is in compliance with post -
issuance federal tax requirements for the City's tax - exempt bonds. However, the City Council
has delegated the primary operating responsibility to monitor the City's compliance with post -
issuance federal tax requirements for the City's bonds to the Finance Director and has authorized
and directed the Finance Director of the City to adopt and implement on behalf of the City these
Compliance Procedures.
Arbitrage Yield Restriction and Rebate Requirements. The Finance Director will maintain or
cause to be maintained records of:
(a) purchases and sales of investments made with bond proceeds (including amounts treated as
"gross proceeds" of bonds under section 148 of the Code) and receipts of earnings on those
investments;
(b) expenditures made with bond proceeds (including investment earnings on bond proceeds) in
a timely and diligent manner for the governmental purposes of the bonds, such as for the
costs of purchasing, constructing and /or renovating property and facilities;
(c) information showing, where applicable for a particular calendar year, that the City was
eligible to be treated as a "small City" in respect of bonds issued in that calendar year
because the City did not reasonably expect to issue more than $5,000,000 of tax - exempt
bonds in that calendar year;
6
36
(d) calculations that will be sufficient to demonstrate to the Internal Revenue Service ( "IRS ")
upon an audit of a bond issue that, where applicable, the City has complied with an available
spending exception to the arbitrage rebate requirement in respect of that bond issue;
(e) calculations that will be sufficient to demonstrate to the IRS upon an audit of a bond issue for
which no exception to the arbitrage rebate requirement was applicable, that the rebate
amount, if any, that was payable to the United States of America in respect of investments
made with gross proceeds of that bond issue was calculated and timely paid with Form 8038 -
T timely filed with the IRS; and
(f) information and records showing that investments held in yield- restricted advance refunding
or defeasance escrows for bonds, and investments made with unspent bond proceeds after the
expiration of the applicable temporary period, were not invested in higher - yielding
investments.
Restrictions on Private Business Use and Private Loans. The Finance Director will adopt
procedures calculated to educate and inform the principal operating officials of those
departments, including utility departments, if any, of the City (the "users ") for which land,
buildings, facilities and equipment ( "property ") are financed with proceeds of tax - exempt bonds
about the restrictions on private business use that apply to that property after the bonds have
been issued, and of the restriction on the use of proceeds of tax - exempt bonds to make or finance
any loan to any person other than a state or local government unit. In particular, following the
issuance of bonds for the financing of property, the Finance Director shall provide to the users of
the property a copy of these Compliance Procedures and other appropriate written guidance
advising that:
(a) "private business use" means use by any person other than a state or local government unit,
including business corporations, partnerships, limited liability companies, associations,
nonprofit corporations, natural persons engaged in trade or business activity, and the United
States of America and any federal agency, as a result of ownership of the property or use of
the property under a lease, management or service contract (except for certain "qualified"
management or service contracts), output contract for the purchase of electricity or water,
privately sponsored research contract (except for certain "qualified" research contracts),
"naming rights" contract, "public- private partnership" arrangement, or any similar use
arrangement that provides special legal entitlements for the use of the bond - financed
property;
(b) under section 141 of the Code, no more than 10% of the proceeds of any tax - exempt bond
issue (including the property financed with the bonds) may be used for private business use,
of which no more than 5% of the proceeds of the tax - exempt bond issue (including the
property financed with the bonds) may be used for any "unrelated" private business use —
that is, generally, a private business use that is not functionally related to the governmental
purposes of the bonds; and no more than the lesser of $5,000,000 or 5% of the proceeds of a
tax - exempt bond issue may be used to make or finance a loan to any person other than a state
or local government unit;
(c) before entering into any special use arrangement with a nongovernmental person that
involves the use of bond - financed property, the user must consult with the Finance Director,
provide the Finance Director with a description of the proposed nongovernmental use
arrangement, and determine whether that use arrangement, if put into effect, will be
consistent with the restrictions on private business use of the bond - financed property;
(d) the Finance Director is to communicate with the City's bond counsel and /or financial advisor
7
37
relative to any proposed change in use or special use arrangement that may impact the status
of the bonds, before entering into such agreement.
8
38
Finance & Safety Committee Minutes August 19, 2014 - Page 2
B. Resolution: Adopting a Financing Plan for Urban Renewal Tukwila International Boulevard (TIB)
Staff is seeking Council approval of a resolution that would adopt a financing plan for purchase
of several properties associated with the Urban Renewal Tukwila International Boulevard
Redevelopment Project. On August 4, the Council authorized the use of interfund loans to
temporarily finance these purchases until a financing plan could be developed. The current
estimated cost of the project is $6,100,000 while the estimated proceeds from the future sale of
the land is $2,250,000 yielding a net estimated cost of $3,850,000. The City and its financial
advisor, the Public Financial Management Group, considered various options and recommend
the following:
• Enter into a $2,250,000 taxable line of credit for acquisition costs estimated to be
recoverable through future property sales; funds would be drawn as needed and the line
would be paid off upon sale of the land.
• Issue $3,850,000 20 -year taxable bonds for the estimated net cost to the City.
• Annual debt service under this plan would approximate $313,000 for 2015 -2016 and
$287,000 for 2018 -2034.
Committee members asked clarifying questions and it was determined that adoption of this plan
does include flexibility if the City hypothetically did not sell the properties. UNANIMOUS
APPROVAL. FORWARD TO AUGUST 25, 2014 COMMITTEE OF THE WHOLE.
C. Resolutions: Financial Policies
Staff is seeking Council approval of two resolutions relating to financial policies. The first is a
housekeeping effort that would restate Resolution 1586 by removing the policies related to debt
and fund balances. Debt policies have been rewritten as a standalone and the fund balance
policy that is proposed to be removed has already been approved separately in a reserve policy
adopted in October 2012. The financial policies remaining will be reviewed and updated in the
future.
The second proposed resolution contains the standalone debt policy noted above. The policy
outlines the purpose, type, and use of debt; responsibilities; methods of bond sales; refunding
procedures; structural elements; credit objective; use of service providers; and post- issuance
compliance procedures. UNANIMOUS APPROVAL. FORWARD TO AUGUST 25, 2014
COMMITTEE OF THE WHOLE.
D. Fire Department Staffing and Overtime
As information only, Acting Chief Flores provided an overview of the current conditions and
impacts of overtime usage in the Fire Department. Long term vacancies and absences have
caused the cost of overtime pay to raise dramatically and well over the budgeted amount. In
2013 the budget for Suppression Division overtime was $408,868.00, then increased by
$200,000 via a budget amendment. The actual amount spent on overtime in 2013 was
$674,736.36. Future solutions could include increasing the budgeted amount, adding staff, or
reducing service. Given that the City is currently undergoing an exploratory process to evaluate
fire service delivery models, no recommendation is being made at this time. INFORMATION
ONLY.
E. Fire Department SAFER Grant
Acting Chief Flores informed the Committee about the existence of the FEMA SAFER (Staffing
for Adequate Fire and Emergency Response) Grant, which provides funding intended to
increase the number of firefighters at the scene of an emergency incident. The application
period for 2014 has not yet been announced, but the Fire Department intends to apply for the
amount necessary to fund six positions. If awarded, this funding would alleviate the overtime
costs discussed in the item above. INFORMATION ONLY.
39
40
COUNCIL AGENDA SEVOPSIS
Aleetlyq, Date
Prepared by
Mayor's review,
Couthal review
08/25/14
PMC
, \ 11 0.)1(Y )/■,//, iron
AN Dal, 08/25/14
:Ilig
09/02/14
PMC
_137d lniard
illi Dale
Pnbli, I learin
All 1),th,
Other
Alt f; ()die
Re,oltaton
Al .1';1)cile 09/02/14
Si' l )NS C >It ( oun(/1 iVia).or
11R 0( 0 I vmphe _ I ire 1 1 IT /V* Pon,e PIV
Sl'UN;,( )1C`, Approve resolution adopting a financing plan for the urban renewal Tukwila International
sil\t\t \to Boulevard (TIB) Redevelopment Project whereby a $2,250,000 taxable line of credit would
be obtained and $3,850,000 taxable 20-year bonds would be issued.
RI \ 11 1 1) By 1 1 COW Mig. CA&P Owe Z I^66 Owe Transportation (;mtc
Ltilitle, Cmte Art,', Comm. Park', Coinin, Planning Comm.
DAlk 08/19/14 (:( )mmilikE CI LAIR: SEAL
RECOMMENDATIONS:
Si' )\,,()R/Al),\IIN
0 )\1\111111
ITEM INFORMATION
ITEM No.
4.D.
41
Si \if SP( )\..,( )R. PEGGY MCCARTHY
ic,iN \I /1(;1 \I) \ 1) \ it . 08/25/14
, \ ( d N I ) \ 1 H \I Hill Resolution to adopt
Boulevard (TIB)
a financing
Redevelopment
plan for the urban renewal Tukwila International
Project.
, \ 11 0.)1(Y )/■,//, iron
AN Dal, 08/25/14
:Ilig
Motron
Dare
111 Ord/name
Alo,Dale
_137d lniard
illi Dale
Pnbli, I learin
All 1),th,
Other
Alt f; ()die
Re,oltaton
Al .1';1)cile 09/02/14
Si' l )NS C >It ( oun(/1 iVia).or
11R 0( 0 I vmphe _ I ire 1 1 IT /V* Pon,e PIV
Sl'UN;,( )1C`, Approve resolution adopting a financing plan for the urban renewal Tukwila International
sil\t\t \to Boulevard (TIB) Redevelopment Project whereby a $2,250,000 taxable line of credit would
be obtained and $3,850,000 taxable 20-year bonds would be issued.
RI \ 11 1 1) By 1 1 COW Mig. CA&P Owe Z I^66 Owe Transportation (;mtc
Ltilitle, Cmte Art,', Comm. Park', Coinin, Planning Comm.
DAlk 08/19/14 (:( )mmilikE CI LAIR: SEAL
RECOMMENDATIONS:
Si' )\,,()R/Al),\IIN
0 )\1\111111
Finance
Unanimous Approval; Forward to Committee of the Whole
COST IMPACT / FUND SOURCE
1, 11 Nt)I i I'M RI Ql111t1 I) AMOUN I 13(1)01 II I) APPROPRIA HON REQuIRLD
Fund Source:
ominous
MTG. DATE
RECORD OF COUNCIL ACTION
8/25/14
MTG. DATE
ATTACHMENTS
08/25/14
Informational Memorandum dated 08/ / 4
Resolution in Draft Form
Minutes from the Finance and Safety Committee Meeting of 08/ 9/ 4
09/02/14
41
42
TO:
City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
Mayor Haggerton
Finance & Safety Committee
FROM: Peggy McCarthy, Finance Director
DATE: August 13, 2014
SUBJECT: Financing Plan for Urban Renewal Tukwila International Boulevard (TIB)
Redevelopment Project
ISSUE
Council is being asked to approve the proposed financing plan for the urban renewal Tukwila
International Boulevard (TIB) Redevelopment Project.
BACKGROUND
In 2013, the City began budgeting for a project intended to reduce crime through acquiring key
properties within the City's urban renewal zone. On April 22, 2013 the City Council approved an
ordinance authorizing the City to use condemnation, if necessary, to purchase up to seven
properties in the urban renewal zone. Those properties were the: Boulevard Motel, Great Bear
Motel, Jet Inn Motel, Knight's Inn Motel, Pawn Shop, Smoke Shop, and Spruce Motel, The City
then conducted appraisals, contacted the property owners, and began evaluating the properties
to determine a purchasing strategy.
On August 27, 2013 the City helped the Federal Government seize three crime-involved
motels: Boulevard Motel, Great Bear Motel, and Traveler's Choice Motel.
As a result of the motel seizures, and the inability to reach a mutually agreeable purchase with
the owner of the pawn shop property within the timeframe necessary to meet the needs of a
potential commercial tenant, the City ended negotiations on that property and determined instead
to purchase the Traveler's Choice motel, the only seized motel that was not originally in the urban
renewal plan. The Council was briefed on these matters early in 2014.
In August 2014 the City purchased two of the seized motels at the appraised value (the Great
Bear and Traveler's Choice) from the Federal Government and is close to completing the
purchase of the Boulevard Motel. The City then plans to purchase the Spruce Motel and Smoke
Shop.
On August 4, 2014, the Council authorized the use of interfund loans to temporarily finance the
property purchases until a financing plan could be developed and executed.
The current estimated cost of the project, excluding property management costs, is $6,100,000;
the estimated proceeds from the future sale of the land is $2,250,000 yielding a net estimated
cost to the City of $3,850,000.
43
INFORMATIONAL MEMO
Page 2
DISCUSSION
The City, in conjunction with its financial advisor the PFM Group, considered various financing
options for the redevelopment project. Based on in-depth analyses, the recommended plan is as
follows:
• Enter into a $2,250,000 taxable line of credit for acquisition costs estimated to be
recoverable through future property sales; funds would be drawn as needed and the line
would be paid off upon sale of the land,
• Issue $3,850,000 20-year taxable bonds for the estimated net cost to the City.
• Annual debt service under this plan would approximate $313,000 for 2015 — 2016 and
$287,000 for 2018 — 2034.
A detailed discussion and analysis of the options is presented in the attached Recommended
Financing Plan for Tukwila International Boulevard (TIB) Redevelopment Project. In the Plan,
Scenario 3 is the recommended option.
RECOMMENDATION
Council is being asked to approve the resolution adopting the proposed financing plan and
consider this item at the August 25, 2014 Committee of the Whole meeting and subsequent
September 2, 2014 Regular Meeting.
ATTACHMENTS
-Recommended Financing Plan for Tukwila International Boulevard (TIB) Redevelopment Project.
-Draft Resolution: Adopting a Financing Plan for the Urban Renewal Tukwila International
Boulevard (TIB) Redevelopment Project.
44
mm
The PIM Group
City of Tukwila, Washington
Recommended Financing PIan for
Tukwila International Boulevard (TIB) Redevelopment P 'ect
August 19, 2014
Overview Financing Goals
The City plans to acquire certain improved property on Tukwila International Boulevard for the
purpose of redevelopment. As part of its redevelopment plan, the City will demolish the
improvements and offer the vacant land for sa|e, subject to certain development conditions. It is
estimated that the property acquisitions will occur in 2014 and early 2015 and cost
approximately $6.100.000, The City estimates it may take up to three years (or possibly more)
to sell the property, which is estimated to produce proceeds of $2.250.000. While the City
expects the redevelopment to provide long term strategic benefit to the Chv, the transactions
are expected to result in a net cost to the City of $3,850,000.
The City wishes to finance the cost for the acquisition of property, estimated at $6.100.000. in
order to amortize the cost over a period of twenty years, The City would also like to have the
ability to use proceeds from the sale of properties (estimated at $2.250000) to redeem or
prepay debt, in order to reduce overall interest cost.
Financing Considerations
In reviewing the City's financing oodons, we focused on two questiVns, which are addressed in
this section:
1) Could the City use lower cost tax-exempt financing for a portion of the p ject under
Internal Revenue Service (IRS) ru|en, and under what conditions; and
2) Given the short term nature of an estimated $2.250.000 of p ject cost, can we reduce
the term and, therefore, the overall cost, for a portion of the borrowing without taking on
an inordinate amount of risk?
Taxable versus Tax Exempt Borrowing Considerations
While the City can benefit from tax exempt borrowing for pr jects defined by the IRS as
"governmental purpooe." certain projects are considered by the IRS to be''non'governmenta|"
due to the actual or perceived private benefits of the project. Tax exempt financing offers the
City savings in interest cost, but requires that certain restrictions are met in regard to use of the
proceeds and to whom the properties will be sold, Taxable financing provides the City with the
most flexibility in the use of proceeds, timing of the sale of the properties and who they may
entertain bids from in the sale of the property.
In order to issue tax exempt bonds, the City must reasonably anticipate the ability to meet IRS
restrictions as summarized by Foster Pepper PLLC, the City's Bond Counsel.
1) The properties financed must be sold no later than 18 months after the date of the first
expenditures on purchase of the Property;
2) The City may not enter into any kind of agreement with the purchaser of the property to
receive additional payments associated with the property (for example, no agreements
that the purchaser will pay extra if the property is not developed in three years); and
3) The amount of tax exempt financing does not exceed the actual sale proceeds received
by the City when the property is sold,
4) Alternatively, the City could commit to restrict the sale of property to a non-profit
purchaser and qualify for tax exempt financing, although this would restrict the potential
pool of purchasers, and could result in lower sales prices for the properties.
Due to the limitations above, the City would be compelled to meet certain time constraints,
limitations in terms, or limitations in who could buy the property, all of which may reduce the
overall value and effectiveness of the redevelopment project. Given the expectation that the
City would use the proceeds of sale to prepay or redeem debt, effectively the benefit of tax
exempt financing would primarily apply to the $3.850.000 of debt financed for a longer term.
We evaluated the difference in debt service between an all taxable bond issuance ($6,100,000)
and a combination ($2.25 million taxable and $3.85 million tax-exempt) and determined it is
approximately $5UO.00Onr$19.00O per year for 2Oyears, On a net present value basis, this
benefit would be lower. Given the relatively small potential savings from using a portion of tax
exempt bondn, and the level of conditions or restrictions it would impose upon the City, the City
would be best served by using a fully taxable financing for the project.
Options to F?educe Overall Financing Cost
Because a portion of the financing will be paid from proceeds of the sale of property, estimated
to occur within three years, we reviewed financing options that included a combination of short
term financing ($2.250.000) and long term financing ($3.850.000). as compared to options for
long term financing with the option of defeasing or prepaying bonds with sale proceeds,
2
46
The PFM Group
These options are summarized bo|ow, and are based on an all-taxable financing p|an, as
discussed above. Appendix A includes more detailed descriptions of the three Scenarios,
Scen
Number
--- -- --
Deoc tion of Scenario
Total Debt
Service
Net Present
Va|uoO/S
Comments
Benefits and Risks
Issue $S.1OO.OUOof2U-yma
bonds in 2014. Use
proceeds of property sales
to prepay bonds on the first
possible date, in 10 years
8.220.361
0.171.18O
• Lock in today's ra dea
• Minimize interest rate risk
• Potential higher total debt
service overall
• Hi herneer-tenn ^a men to
2
Borrow $6,100,000 for shor
term in 2014; issue long
term bonds for the net
amount of borrowing (est.
$3,850,000) in 2017
7.870.385
5.703.787
• Lower short term interest
rates
• If long term rates rise less
than 1.5096 to 1.8596
between 2014 and 2017,
lower total DIS
• High degree of interest rate
exposure on$3.85O.O00
• Lock in todays rates on
$3.85O.O00 long term
portion
• Lower short term rates on
$2,250,000 portion
• Matches term of each
portion with expected need
• Interest rate risk on short
term portion, but for a short
term period
• At current market roteo,
savings es imaVsd at
$185.000. Even if short
term rates rise to 3,85%
(from about 1.0Y6 today),
same cost as Scenario 1
3
Issue $3.850.UOOof2O-yeor
bonds in 2014 and enter
into a $2.250.000 Line of
Credit in 2014, due in 2017
$8.063.175
5.029.711
Recommendation
Given the City's goals of financing the acquisition of property, with the ability to use proceeds
from the sale of properties (estimated at $2.250.000) to redeem or prepay debt, in order to
reduce overall interest cont, we recommend Scenario 3, which is a combination of short term
financing of $2.250.000 and long term financing of $3,850,000. The interest rate risk for this
scenario is limited to the smaller amount and shorter term, and is expected to provide overall
debt service savings compared to a long term issuance of $6,100,000 of bonds today.
As shown in Appendix B. Scenario 3 will also provide for a lower annual debt service payment
and more effectively spread the financing cost over a twenty year term.
4
48
PFM Group
Appendix A
Description of Scenario 1:
Scenario 1 assumes the City issues all of the estimated $6.1 million in p ject costs up front in a
taxable bond issuance (20 year term) in October 2014, The use of the sale proceeds (at the
time of sale), estimated at $225 million, will be used to fund an early redemption account, to caiI
the bonds at their ten year par caII, This scenario produces approximately $8,220,361 in total
debt service over the 20 year Iife of the financing. The present value of the debt service,
discounted at 5.8096. is approximately $6.171.510.
*
Benefits:
Mitigate interest rate risk by locking in financing today
• Timing of sale proceeds will have minimal effect on overall financing costs
• Take advantage of historically low interest rate environment
• Simplicity in financing process
Risks:
• If rates remain the same the financing would have the greatest cost
• If $2,250,000 bonds are not prepaid from property sales proceeds, the full $6,1 million
will be outstanding for a greater amount of time, creating costs greater than shown here
Estimated Average Annual Debt Service 2O15-2OZ4: $451.000
Estimated Average Annual Debt Service 2025 — 2027: $340.000 (excluding prepayment from $2.250.000)EohmateU
Average Annual Debt Service 2028 - $52,000
tion of Scenario 2:
Scenario 2 assumes the City issues short term financing for the estimated $6.1 million in pr joot
costs in October 2014. As properties are soid, the sale proceeds, estimated at $2.25 million,
would be used, along with $3.85 million financed as a long term taxable bond isnuanoe, to take
out the short term financing. This scenario produces approximateiy $7,870,365 in total debt
service over the 20 year life of the financing, The present value of the debt sen/ice, discounted
at 3,8096, is approximately $5.703.787.
Benefits:
• Utiiize short term rates up front
• If interest rates remain the same the financing cost would be lower than scenario 1
5
=1=1 The PFM Group
Risks:
� Take out finance timing is unnertoin, contingent upon sale of property
°
Significant interest rate risk
� |f interest rates rise more than 1.5U%'1.85% between now and 2017, the overall cost of
the financing would be greater than scenario 1.
• Interest rates have been 1.596 higher than today's rates approximately 8596 of the time
over the past 20 years.
Estimated Average Annual Debt Service 2015-2O1O: $93,000
Estimated Average Annual Debt Service 2O1O-2O34: $314.000
Description of Scenario 3:
Scenario 3 assumes the City undertakes the financing in two parts in October 2014:
1. A 3 to 5 year line of credit for $2.25 million in pr ject costs in October 2014. The line of
credit would be drawn as needed to purchase property and re-paid upon sale of
property. Although the line of credit would carry a variable rate of intenant, the current
rates are approximately 1.0%. leaving significant buffer for interest rate risk.
2. A $3.85 million 20' year taxable bVnd, also issued in October 2014.
This scenario produces approximately $8,063,175 in total debt service over the 20 year life of
the financing. The present value of the debt nervioe, discounted at 3.80%. is approximately
Benefits:
• Mitigate interes rate risk by locking in a Iarge portion of the financing today
• Flexibility with the timing of a portion of funding using the line of credit
• Take advantage of historically Iow interest rate environment
• Lower debt service than Scenario 1
Risks:
• More interest rate exposure than Scenario 1, but much less than Scenario 2
• If properties are not sold in 3 to 5 years, the City may need to refinance the debt for long
ternn, which may result in higher interest rates over the long term.
Estimated Average Annual Debt Service 2015-2V16: $313.000
Estimated Average Annual Debt Service 2018 — 2034: $287.000
6
50
Period
Ending
12/1/2015
12/1/2016
12/1/2017
12/1/2018
12/1/2019
12/1/2020
12/1/2021
12/1/2022
12/1/2023
12/1/2024
12/1/2025
12/1/2026
12/1/2027
12/1 /2028
12/1/2029
12/1/2030
12/1/2031
12/1/2032
12/1/2033
12/1/2034
Total
Present Value
Appendix B
Annual Debt Service Schedule
Scenario 1 (1)
$ 451,439
453,154
450,949
452,396
452,721
451,805
450,123
452,730
454,177
3,079,744
337,694
341,714
339,713
52,005
$8,220,361
$6,171,160
Scenario lb (2) Scenario 2 Scenario 3
$ 451,439 $ 96,197 $ 313,733
453,154 91,119 312,919
450,949 2,338,463 2,556,417
452,396 312,726 288,614
452,721 316,700 285,622
451,805 314,945 286,910
450,123 317,118 287,670
452,730 313,378 287,927
454,177 313,738 287,484
449,744 313,469 286,526
449,565 312,610 285,033
453,585 315,924 288,079
451,583 313,476 285,459
453,876 315,403 287,443
450,242 316,619 288,822
450,857 312,094 289,574
450,490 312,124 284,681
449,302 316,497 284,457
452,278 314,989 288,682
454,184 312,780 287,128
$9,035,194 $7,870,175 $8,063,175
$9,035,194 $5,703,787 $6,029,711
(1) Assumes the $2,250,000 in property sale proceeds are escrowed to the first call date for the Bonds
(') Assumes the $2,250,000 in property sale proceeds are not used to call Bonds prior to maturity
7
51
52
RAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, ADOPTING A FINANCING PLAN
FOR THE URBAN RENEWAL TUKWILA INTERNATIONAL
BOULEVARD (TIB) REDEVELOPMENT PROJECT.
WHEREAS, the City of Tukwila plans to, and has, acquired certain improved
property on Tukwila International Boulevard for the purpose of redevelopment; and
WHEREAS, as part of the redevelopment plan, the City will demolish the
improvements and offer the vacant land for sale, subject to certain development
conditions; and
WHEREAS, it is estimated that the property acquisitions will cost approximately
$6,100,000; and
WHEREAS, the City estimates it may take up to three years to sell the property,
which is estimated to produce proceeds of $2,250,000; and
WHEREAS, while the City expects the redevelopment to provide long term strategic
benefit to the City, the transactions are expected to result in a net cost to the City of
$3,850,000; and
WHEREAS, the City wishes to finance the cost of the acquisition of property in
order to amortize the cost over a period of 20 years; and
WHEREAS, the City would like to have the ability to use proceeds from the sale of
properties to redeem or prepay debt in order to reduce overall interest cost;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
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53
The City Council hereby adopts a financing plan for the Urban Renewal Tukwila
International Boulevard (TIB) Redevelopment Project whereby the City of Tukwila will
secure a 3- to 5 -year $2,250,000 taxable line of credit to finance acquisition costs
estimated to be recoverable through future property sales, and whereby a 20 -year
$3,850,000 taxable bond will be issued for the estimated net acquisition cost to the City.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President
APPROVED AS TO FORM BY:
Filed with the City Clerk:
Passed by the City Council:
Resolution Number:
Rachel Turpin, Assistant City Attorney
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54
Page 2 of 2
Finance & Safety Committee Minutes August 19, 2014 - Page 2
B. Resolution: Adopting a Financing Plan for Urban Renewal Tukwila International Boulevard (TIB)
Staff is seeking Council approval of a resolution that would adopt a financing plan for purchase
of several properties associated with the Urban Renewal Tukwila International Boulevard
Redevelopment Project. On August 4, the Council authorized the use of interfund loans to
temporarily finance these purchases until a financing plan could be developed. The current
estimated cost of the project is $6,100,000 while the estimated proceeds from the future sale of
the land is $2,250,000 yielding a net estimated cost of $3,850,000. The City and its financial
advisor, the Public Financial Management Group, considered various options and recommend
the following:
• Enter into a $2,250,000 taxable line of credit for acquisition costs estimated to be
recoverable through future property sales; funds would be drawn as needed and the line
would be paid off upon sale of the land.
• Issue $3,850,000 20 -year taxable bonds for the estimated net cost to the City.
• Annual debt service under this plan would approximate $313,000 for 2015 -2016 and
$287,000 for 2018 -2034.
Committee members asked clarifying questions and it was determined that adoption of this plan
does include flexibility if the City hypothetically did not sell the properties. UNANIMOUS
APPROVAL. FORWARD TO AUGUST 25, 2014 COMMITTEE OF THE WHOLE.
C. Resolutions: Financial Policies
Staff is seeking Council approval of two resolutions relating to financial policies. The first is a
housekeeping effort that would restate Resolution 1586 by removing the policies related to debt
and fund balances. Debt policies have been rewritten as a standalone and the fund balance
policy that is proposed to be removed has already been approved separately in a reserve policy
adopted in October 2012. The financial policies remaining will be reviewed and updated in the
future.
The second proposed resolution contains the standalone debt policy noted above. The policy
outlines the purpose, type, and use of debt; responsibilities; methods of bond sales; refunding
procedures; structural elements; credit objective; use of service providers; and post- issuance
compliance procedures. UNANIMOUS APPROVAL. FORWARD TO AUGUST 25, 2014
COMMITTEE OF THE WHOLE.
D. Fire Department Staffing and Overtime
As information only, Acting Chief Flores provided an overview of the current conditions and
impacts of overtime usage in the Fire Department. Long term vacancies and absences have
caused the cost of overtime pay to raise dramatically and well over the budgeted amount. In
2013 the budget for Suppression Division overtime was $408,868.00, then increased by
$200,000 via a budget amendment. The actual amount spent on overtime in 2013 was
$674,736.36. Future solutions could include increasing the budgeted amount, adding staff, or
reducing service. Given that the City is currently undergoing an exploratory process to evaluate
fire service delivery models, no recommendation is being made at this time. INFORMATION
ONLY.
E. Fire Department SAFER Grant
Acting Chief Flores informed the Committee about the existence of the FEMA SAFER (Staffing
for Adequate Fire and Emergency Response) Grant, which provides funding intended to
increase the number of firefighters at the scene of an emergency incident. The application
period for 2014 has not yet been announced, but the Fire Department intends to apply for the
amount necessary to fund six positions. If awarded, this funding would alleviate the overtime
costs discussed in the item above. INFORMATION ONLY.
55
56
Upcoming Meetings & Events
August /September 2014
25th (Monday)
26th (Tuesday)
27th (Wednesday)
28th (Thursday)
29th (Friday)
30th (Saturday)
➢ Transportation
Crate,
5:15 PM
(Foster
Conference
Room)
➢ City Council
Committee of
the Whole Mtg.,
7:00 PM
(Council
Chambers)
➢ Community
Affairs & Parks
Crate,
5:30 PM
(Hazelnut
Conference
Room)
Peanut Butter and
Jam Family
Entertainment
Series
FREE family fun!
12:00 Noon
This week:
Eric Ode
> Planning
Commission,
6:30 P1VI
(Council
Chambers)
Last Splash of
Summer
Movie Night
, „111 ,j
8:00 PM
(Tukwila Pool)
Movie: Frozen
Free event.
For more
information call
206 - 267 -2350.
Tukwila Int'l.
Action
Trash Pickup
9:00 10:00
For location
information
Sharon
206- 200
Cmte's
�v2
contact
Mann
-3616
Blvd.
Day
AM
or
➢ Lodging Tax
Advisory
Committee
meeting,
12:00 NOON
(Double Tree
Suites, 16500
Southcenter
Plz,vy)
➢ Tukwila
Metropolitan Park
District Board of
Commissioners,
5:30 PM
(Council
Chambers)
1st (Monday)
2nd (Tuesday)
3rd (Wednesday)
4th (Thursday)
5th (Friday)
6th (Saturday)
Labor
City offices
;sue
li
Gl r
Day
closed
lomm,
➢ Chamber of
Commerce Gov't.
& Community
Affairs Cmte,
12:00 NooN
(Chamber Office)
D Finance &
Safety Crate,
5:30 PM
(Hazelnut
Conference
Room)
➢ Equity &
Diversity
Commission,
5:15 PM
(Hazelnut
Conference
Room)
➢ Arts Commission,
5:30 Pm
(Community
Center)
➢ Library Advisory
Board,
7:00 Prvi
(Community
Center)
> Civil Service
Commission,
Cancelled
➢ Utilities Cmte,
5:15 Prvi
(Foster
Conference
Room)
➢ City Council
Executive
Session,
6:15 Prvi
(Hazelnut
Conference
Room)
➢ City Council
Regular Mtg.,
7:00 Prvi
(Council
Chambers)
> City Council Committee of Whole (C.O.W.) Meeting: 2nd & 4th Mon., 7:00 PM, Council Chambers at City Hall.
> City Council Regular Meeting: 1st & 3rd Mon., 7:00 PM, Council Chambers at City Hall.
➢ Civil Service Commission: 1st Mon., 5:00 PM, Hazelnut Conf. Room. Contact Kim Gilman at 206 -431 -2187.
> Community Affairs & Parks Committee: 2nd & 4th Tues., 5:30 PM, Hazelnut Conf. Room (A) An ordinance adopting the 2014
Edition of the National Electrical Code.
> Equity & Diversity Commission: 1st Thurs., 5:15 PM, Hazelnut Conf. Room. Contact Joyce Trantina at 206 - 433 -1868.
> Library Advisory Board: 1st Tues., 7:00 PM, Community Center. Contact Stephanie Gardner at 206 -767 -2342.
>Lodging Tax Advisory Committee: Every other month (or as scheduled), 12:00 NOON. Contact Katherine Kertzman at
206 -575 -2489.
> Transportation Committee: 2nd & 4th Mon., 5:15 PM, Foster Conf. Room (A) City Tour of Transportation Facilities and Projects.
57
Tentative Agenda Schedule
MONTH
MEETING 1-
REGULAR
MEETING 2 -
C.O.W.
MEETING 3 -
REGULAR
MEETING 4 -
C.O.W.
August
4
11
18
25
See agenda packet
cover sheet for this
week's agenda
(August 25, 2014
Committee of the VVhole
Meeting).
September
2 (Tuesday)
Special Presentations:
8
Special Presentations:
15
Special Presentation:
22
Committee of the
Whole to be followed
by a Special Meeting.
Indoor Air
Environmental
Health Project
Update.
Budget Update
2015 -2016.
Proclamation:
Introduction of
Officer David Pollett.
Taking Back Our
Boulevard.
Special Issues:
New Fire Department
Engine.
Proclamation:
Mayors Day of
Concern for the
Hungry.
Comprehensive Plan
update review.
A proclamation for
National Recovery
Month.
Consent Agenda:
A resolution
authorizing the
cancellation of
outstanding General
Fund claims and
payroll checks.
Unfinished Business:
After School
Programming
Funding Options.
Financial Policies.
A resolution
adopting a
financing plan for
the Urban Renewal
Tukwila
International
Boulevard
Redevelopment
Project.
58