HomeMy WebLinkAboutSpecial 2016-04-11 Facilities Plan Workshop 2 - Powerpoint Presentation - Financing Tools and Definitions/0-
City of Tukwila Facilities
Financing Tools and Definitions
Council Workshop #2
April 11, 2016
Financin • Tools and Definitions
Term
Funding Mechanisms
2015 $
Near Term — 2017/2018 Biennium
Public Safety:
• New Justice Center — Police Public Safety bond $68.8 M for justice
and Municipal Court ballot measure center, fire facilities
• Fire facilities and equipment
• Fire apparatus and
equipment
• Public Works Shops
Steering Committee
recommended 6320
financing for Shops —
other options
available
$26.6 M for shops,
utilities pay half
2
Financing Tools and Definitions
• Unlimited Tax General Obligation
(UTGO) Voted Bonds
• Limited Tax General Obligation (LTGO)
Non -Voted Bonds
• 63 -20 Financing
• Enterprise Program Funds
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Financing Tools and Definitions
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Definitions
Unlimited Tax General Obligation (UTGO) Voter-Approved Bonds
• Issuance includes a levy of additional tax to repay them
• Requires 60% voter approval and may only be used for capital purposes
• Once approved, the municipality is restricted by constitutional and statutory
debt limits (2.5% of the assessed value of property inclusive of LTGO (non -
voted) debt.
4
Financing Tools and Definitions
Definitions
Limited Tax General Obligation bonds (LTGO) also referred to in WA as
"councilmanic" bonds
• Do not require voter approval and are payable from the general fund
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• LTGO bonds can be used for any purpose, but funding for debt service must be
made available from existing revenue sources
• Tukwila has debt policies that govern the use of this debt (City of Tukwila Debt
Policy -Res 1840, Sep 2014)
• Limited by state constitution not to exceed 1.5% of actual assessed valuation
• As of December 31, 2015, Tukwila had $29.3 million of non -voter approved debt
• Remaining debt capacity is $98.7 million
5
Financing Tools and Definitions
Definitions
63 -20 Financing
• This is a method of obtaining tax - exempt financing
• Allows public bonds to be used to construct public facilities
• Secured by lease agreement
• The facility is transferred to the government entity once the debt is
paid
• 63 -20 bonds may have a higher interest rate compared to a general
obligation bond
• Balanced by significant construction cost savings due to the project
delivery process
Financing Tools and Definitions
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Definitions
• Enterprise Program Funds (water, sewer, and surface water maintenance)
• Rates may be raised to support funding for capital facility needs
• The analysis assumes a portion of the public works building can be funded from
utility fees
7
Assumptions
Things to keep in mind:
• The model is a tool, not the final financing plan
• Financing plan fine -tuned after scenario chosen
• All scenarios within debt capacity
• Debt capacity still exists for unexpected expenses
• City Hall, Police Precinct, and Shops Annex removed from model
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8
Assumptions
Assumptions in Model:
Major Assumptions:
Inflation Rate 3% annually
AV for 2016 tax year
$5,37 million
LTGO & UTGO Bonds:
Rate
Term
4.0%
20 years
Issuance Costs
63 -20 Lease:
1.5%
Cost of Issuance
4% Points above interest rate
Interest Rate 5% annually
Management Fees
Lease Term
1%
20 years
/4"
9
Scenario 1 -Plan B
• Steering Committee recommendation with Fire added
FUNDING SUMMARY
Total Facility Costs ($1000s)
2015$ YOE$
70-
Source of Funds
UTGO 63 -20 LTGO
CIP
Public Safety Building
City Shops Facility
Fire Station 51
Fire Station 52
Fire Station 54
Fire Apparatus and Equipment
$25,861
$26,625
$10,654
$5,083
$6,206
$21,000
$28,624
$29,492
$11,400
$5,657
$7,329
$29,060
$28,470 $0
$0 $22,856
$11,400
$5,657
$6,471
$24,310
$0 $154
$6,365 $271
$0
$0
$858
$4,750
Year
Complete
2019
2020
2018
2019
2021
GRAND TOTAL
Funding Shares
$95,428 $111,563
100%
$76,308 $22,856 $6,365
68% 20% 6%
$6,034
5%
10
Scenario 1 -Plan B
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• UTGO bonds packaged to ensure funding for project costs and lowest impact
to taxpayer
• LTGO bonds —1 issue
• 63-20: 1/2 paid by utility funds, 1/2 paid by general fund
Scenario 1 -Plan B
$3.50
$3.00
ct
0 $2.50
s
$2.0O
$1.50
c▪ o
$1.00
es $0.5O
$0.00
Impact to Taxpayer
10-
• Bond levy rate (UTGO)
• General expense levy rate
11111M1111 Ifi[11
2016 2021 2026 2031 2036 2041
Maximum levy rate $0.65, average levy rate $0.47 (per thousand)
12
Scenario 1 - Plan B
$1.00
$0.90
$0.80
$0.70
4l
ce $0.60
J $0.50
0
$0.40
$0.30
$0.20
$0.10
$0.00
2016
Impact to Taxpayer ($250,000 residence)
!1'
163 16Q r,1
$180
$160
$140
$120
4Y-
2021
2026
2031
UTGO Levy -Cost to Taxpayer
2036
$60
$40
$20
$0
13
Scenario 1 -Plan B
12 $1,400
vp
0 51,200
$1,000
$800
$600
$400
$200-
Impact to General Fund and CIP
N. CO c
0 0 0 0
o IN m k.o 6-- CO c i o rl r*J m ul LID N co C
r*J ry r*J r*J N N N r*J r*J rW rn m m m m m m m m m
0 0 0 0 o o 0 0 0 0 0 C 0 0 0 0 0 0
14
Scenario 1 -Plan B
cn 5140
0
$120
2
5100
$80
$E0
$40
20
0
Debt Capacity
Note: Debt capacity based
on model, will change
when final plan adopted.
iiiiIIIIiiiiiiiii
r- c, 0 N 't Ln r- a-3 o i N CO t u-]
r-I rl rl r-I N N t *J C J d J r'J Ni r'J t' J r l CO CO CO CO CO
CI CI C CO CI CI CI CD CI
N N N r44 r J r J N N r l r l r'l r J r' r'J rxJ N r l rkJ r'J
Total Debt 201E Debt Capacity
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15
Scenario 2 -Shops in UTGO
FUNDING SUMMARY
Total Facility Costs ($1000s)
Public Safety Building
City Shops Facility
Fire Station 51
Fire Station 52
Fire Station 54
Fire Apparatus and Equipment
GRAND TOTAL
Funding Shares
2015$
$25,861
$26,625
$10,654
$5,083
$6,206
$21,000
$95,428
YOE$
70-
Source of Funds
$28,624
$29,492
$11,400
$5,657
$7,329
$29,060
$111,563
100%
UTGO
$28,470
$14,611
$11,400
$5,657
$6,471
$24,310
$90,919
81%
63 -20
$0
$0
LTGO
$0
$14,611
$0 $14,611
0% 13%
CIP
$154
$270
$0
$0
$858
$4,750
$6,033
5%
Year
Complete
2019
2020
2018
2019
2021
With Shops as UTGO, 63 -20 financing would be removed and the utilities share would be LTGO
16
Scenario 2 -Shops in UTGO
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• UTGO bonds packaged to ensure funding for project costs and lowest impact
to taxpayer
• 63 -20 leasing option rolled into UTGO debt issue and utilities portion funded
with LTGO. LTGO debt repaid with utility fees.
17
Scenario 2 -Shops in UTGO
$3.50
$3.00
0 $2.50
0
$2.00
$1.50
CC $1.00
0) $0.50
$0.00
Impact to Taxpayer
• Bond levy rate (UTGO)
• General expense levy rate
2016
2021
2026
2€31
Maximum levy rate $0.82, average levy rate $0.58 (per thousand)
20.36 2041
18
Scenario 2 -Shops in UTGO
$1.00
$0.90
$0.80
$0.70
OJ
ce $0.60
w $0.50
0
$0.40
$0.30
$0.20
$0.10
$0.00
2016
Impact to Taxpayer ($250,000 residence)
1g3
2021
2026
2031
UTGO Levy -Cost to Taxpayer
2036
$200
$150
11;100 0
N
ih
$50
$0
2041
19
Scenario 2 -Shops in UTGO
ch 51,200
a
0
000
$800
600
$400
$200
Impact to General Fund and CIP
rte- co c, 0 r rJ or) • M o r ni m L r-- c
NJ IN N N N ▪ ▪ rJ nr N rJ m m m m m m m m m m
0 0 0 0 0 0 0 0 0 + 0 0 c+ 0 0 0 0 0 0 0
N r'J r rS N NN r r r*J N N N N N N N N N N N N
/0-
20
Scenario 2 -Shops in UTGO
$140
$120
2
$100
$ 80
$60
$ 40
$ 20
$0
Debt Capacity
Note: Debt capacity based
on model, will change
when final plan adopted.
o 0 0 co o o 0 0 0 0 0 0 0
Total De bt 2016 Debt Capacity
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21
Scenario 3 - Public Safety, Shops Concurren
FUNDING SUMMARY
Total Facility Costs ($1000s)
Public Safety Building
City Shops Facility
Fire Station 51
Fire Station 52
Fire Station 54
Fire Apparatus and Equipment
GRAND TOTAL
Funding Shares
2015$
$25,861
$26,625
$10,654
$5,083
$6,206
$21,000
$95,428
YOE$
$28,624
$29,489
$11,400
$5,657
$7,329
$29,060
$111,560
100%
Source of Funds
UTGO 63 -20
$28,470 $0
$0 $22,869
$11,400
$5,657
$6,471
$24,310
$76,308 $22,869
68% 20%
LTGO
$0
$6,365
CIP
$154
$255
$0
$0
$858
$4,750
$6,365 $6,018
6% 5%
Year
Complete
2019
2019
2018
2019
2021
22
Scenario 3 - Public Safety, Shops Concurren
• UTGO bonds packaged to ensure funding for project costs and lowest impact
to taxpayer
• LTGO bonds —1 issue
• 63-20: 1/2 paid by utility funds, 1/2 paid by general fund
• Public Safety and Public Works Shops constructed concurrently
23
Scenario 3 - Public Safety, Shops Concurren
.)*
$3.50
$3.00
0 $2.50
0
$2.00
co $1.50
Ela
ra
ce $1.00
it $0.50
$0.00
1
Impact to Taxpayer
• Bond levy rate (UTGO)
• General expense levy rate
11111111111111111111111
II III 11111
2016
2021
2026
2031
Maximum levy rate $0.65, average levy rate $0.46 (per thousand)
2036
2041
24
Scenario 3 - Public Safety, Shops Concurren
$1.00
$0.90
$0.80
$0.70
a
c C $0.60
J $0.50
0
$o.40
I-
D
$0.30
$0.20
$0.10
$0.00
2016
Impact to Taxpayer ($250,000 residence)
$180
$160
$140
9 $120
ti 1
0 0
00 $100
.3 .0
$80
1111 $6D
$40
$zo
$o
2041
2021
2026
2031
UTGO Levy -Cost to Taxpayer
2036
25
Scenario 3 - Public Safety, Shops Concurren
1 $1,400
ro
0 $1,200
$1,000
$800
$ 600
$400.
$200
Impact to General Fund and CIP
1
CO m 0 si rJ r 9 cc al l ri N I!' of I C CA CO
r J ry N r� ▪ r,4 r▪ y rJ r a N CO m m m m m m m m m
c + a o Q o Q op c o o op Do a o o o c,
N N r a t N N N N N r • r-4 rJ r*J rsJ N rJ rJ N IN rJ r-4 rJ
26
Scenario 3 - Public Safety, Shops Concurren
0
2
$140
$120
$100
$80
$60
$0
$0
Debt Capacity
i1vLC. VCIJL iapaiiiy ua�C
on model, will change
when finai plan adopted.
rJ N N NJ IN N N rn rn rn rn rn rn
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ct o
Total Debt 2016 Debt Capacity
27
Scenario 4 -Fire Apparatus, Equipment Removed
FUNDING SUMMARY
Total Facility Costs ($1000s)
Public Safety Building
City Shops Facility
Fire Station 51
Fire Station 52
Fire Station 54
Fire Apparatus and Equipment
GRAND TOTAL
Funding Shares
2015$
$25,861
$26,625
$10,654
$5,083
$6,206
$21,000
$95,428
YOE$
$28,624
$29,492
$11,400
$5,657
$7,329
$29,060
$111,563
100%
Source of Funds
UTGO 63 -20
$28,470 $0
$0 $22,856
$6,650
$5,657
$6,471
$0
$47,248 $22,856
42% 20%
LTGO
$0
$6,365
CIP
$154
$271
$4,750
$0
$858
$29,060
$6,365 $35,094
6% 31%
/47•'
Year
Complete
2019
2020
2018
2019
2021
28
Scenario 4 -Fire Apparatus, Equipment Removed
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• UTGO bonds packaged to ensure funding for project costs and lowest impact
to taxpayer
• LTGO bonds —1 issue
• 63-20: 1/2 paid by utility funds, 1/2 paid by general fund
• Fire apparatus and equipment would be paid with existing revenue sources
29
Scenario 4 -Fire Apparatus, Equipment Removed
$3.50
�..� $3.00
0 $2.50
0
0
x$2.00
x,.$1.50
c▪ o
›„ $1.00
$0.50
$0.00
Impact to Taxpayer
• Bond levy rate (UTGO)
• General expense levy rate
111 '111 1111111111
ii
2016
2021
2026
2031
2036
Maximum levy rate $0.57, average levy rate $0.39 (per thousand)
2041
30
Scenario 4 -Fire Apparatus, Equipment Removed
Impact to Taxpayer ($250,000 residence)
$0.80
$0.70
$0.60
a
+.0 $0.50
J $0.40
t.
$0,30
$0.20
$0.10
$0.00
2016
2021
$160
$140
$120
11111111 i (73
204 $4a
$Za
$a
1
2026
2031
IJTGO Levy Impact to Taxpayer
2036
$100 0
O
0
$80
/3 "
$60 1'4
31
Scenario 4 -Fire Apparatus, Equipment Removed
vl $3,.500
6 $:3,000
0
1— $2,500
$2,000
$1,500
$1,0001
$500
Impact to General Fund and CIP
r– co on rl ua N., CC Cri 0 N m L r- as on
r4 N r r rd m rn m m m m m m m m
0 0
r J r*a 4-4 r*J N rw rJ rw rJ r*J N r IN ry N r J N r ry rw
/0-
32
Scenario 4 - Fire Apparatus, Equipment Removed
0
2
$140
$120
$100
580
$60
$40
$20
$0
Debt Capacity
Note: Debt capacity based
on model, will change when
final plan adopted.
0 - 0 - 0 0 0 ▪ 0 0 0 0 0 0 0 0 0 0 0
Total Debt — 2016 Debt Capacity
33
Scenario Comparisons
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Total
Voted
Debt
Maximum /
average levy
rate
Maximum /
average
annul impact
to taxpayer
($250,000
home)
Maximum /
average annual
impact to CIP
(in thousands)
Total impact
to CIP through
2039
(in thousands)
Scenario 1 $76,308
$0.65 / $0.47
$163 / $116
$1,398 / $840 $21,991
Scenario 2 90,919
$0.82 / $0.58
204 / 145
$1,091 / $47
1,124
Scenario 3 76,308
$0.65 / $0.46
163 / 116
$1,399 / $916
21,896
Scenario 4 47,248
$0.5 / $0.39
143/98
$3,295 / $2,127
51,052
Scenario 1- Public safety with fire
Scenario 2 - Shops moved into UTGO
Scenario 3 - Public safety and shops concurrent scenario
Scenario 4 - Public safety with fire stations but without fire apparatus and equipment
34
Discussion
• Questions?
• Direction
Next Steps
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