Title
A RESOLUTION DECLARING IT NECESSARY TO BUILD OR REPAIR EXISTING BRIDGES IN THE COUNTY UNDER THE AUTHORITY OF K.S.A. 68-1103; PROVIDING FOR THE ISSUANCE OF GENERAL OBLIGATION BONDS TO PAY THE COSTS THEREOF; AND PROVIDING FOR PUBLICATION OF THIS RESOLUTION AS REQUIRED BY LAW (2013 BRIDGE PROJECTS).
Presented by: Chris Chronis, Chief Financial Officer.
RECOMMENDED ACTION: Adopt the resolution.
Body
The Resolution declares an intent to make improvements to bridges and authorizes the issuance of general obligation bonds in an amount not to exceed $710,500 to pay the County's share of the costs thereof and associated bond issuance costs. The bridges to be improved are as follows:
|
CIP No. |
Project Description |
Cost Estimate |
|
B-447 |
Bridge on 55th St. South between Meridian and West St. |
$300,0001 |
|
B-448 |
Bridge on 103rd St. South between Hoover and Ridge |
150,0002 |
|
B-449 |
Bridge on 107th St. South between 231st St. West and 247th St. West |
200,0003 |
|
B-451 |
Bridge on 239th St. West between K-42 and 103rd St. South |
50,0004 |
|
|
Total |
$700,000 |
|
|
1 $300,000 in GO bonds; and $350,000 in available sales tax funds |
|
|
|
2 $150,000 in GO bonds; and $243,894 in available sales tax funds |
|
|
|
3 $200,000 in GO bonds; and $700,000 in available sales tax funds |
|
|
|
4 $50,000 in GO bonds; $200,000 in FHWA funds and $100,000 in available sales tax funds |
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This resolution establishes the county’s right to fund expenditures for certain projects with available cash and then reimburse the cash accounts with the proceeds of a subsequent bond issue. It also authorizes the sale of bonds to provide permanent financing for those projects. Thus, it provides a mechanism through which the projects can be expedited and the permanent financing of the projects can be delayed until an optimal future time.
These projects are included in the adopted Capital Improvement Program, and are programmed to be funded in part with bond proceeds and in part with sales tax and federal grant revenue.
The bonds authorized in this resolution are scheduled to be sold in 2013. The resolution will permit reimbursement of expenditures incurred up to 18 months prior to the date of the bond sale or completion of the projects, whichever is first.
Alternatives:
This project could be funded with the portion of sales tax dedicated to road and bridge construction projects. However, as the anticipated amount of this funding has been fully allocated to other road and bridge projects or to reserves for future projects, doing so would require the elimination of funding for one or more of those projects.
The projects to be funded with these bonds likewise could alternatively be funded with general County reserves. Doing so, however, would require an unplanned reduction of the level of reserves, which potentially could lead to future increases of property taxes as well as to a downgrade of the county’s bond rating.
Financial Considerations:
Issuance of these bonds is contemplated in the County’s financial plan and Capital Improvement Program. As general obligation debt, the bonds will be secured by a pledge of the County’s full faith and credit, meaning bondholders will be able to compel the levy of property taxes if necessary to repay the debt.
The preliminary estimate of annual debt service required to repay these bonds is $47,000. The financial plan contemplates the bonds will be repaid with an annual property tax levy; based on the current tax role approximately 0.01 mills would be required to do this. An alternative is to repay the debt with sales tax drawn from the share of sales taxes that are dedicated to road and bridge construction projects. This would reduce the amount of cash available each year from the dedicated sales tax for pay-as-you-go road projects. The source of funds used to repay this debt will be determined annually through the budget adoption process.
Legal Considerations:
K.S.A. 68-1103, as amended, authorizes the Board of County Commissioners to determine it necessary to construct or make improvements to any bridges in the County that meet the requirements of the Act, and to issue general obligation bonds of the County to pay the costs thereof. Bonds issued under this Act are not subject to any statutory limitation on the bonded indebtedness of the County.
Policy Considerations:
These bonds are subject to the County’s adopted debt policy. It provides five ratios that constitute limits on the total County debt that may be outstanding at any point. If the maximum level of more than one ratio is exceeded at any time, the policy prohibits the issuance of any additional debt by the County. The issuance of these bonds will not cause more than one of those ceilings to be exceeded.
Including these bonds and all other debt to be issued in 2013, the ratios will be as follows:
|
Ratio |
Policy Maxiumum |
Estimated Actual |
|
Per capita direct debt |
$500 |
$301 |
|
Direct debt as % of full market value |
1.50% |
0.45% |
|
Per capita direct, overlapping & underlying debt |
$3,000 |
$3,365 |
|
Annual debt service as % of full market value |
6.00% |
5.06% |
|
Annual debt service as % of budgeted expenditures |
20% |
11.00% |
Outside Attendees: Joe Norton, Gilmore & Bell, P.C., Bond Counsel
Multimedia Presentation: