Title
A RESOLUTION DECLARING IT NECESSARY TO CONSTRUCT IMPROVEMENTS TO EXISTING ROADS IN SEDGWICK COUNTY, KANSAS, UNDER THE AUTHORITY OF K.S.A. 68-5, 103; 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 ROADS).
Presented by: Chris Chronis, Chief Financial Officer.
RECOMMENDED ACTION: Adopt the resolution.
Body
The Resolution declares an intent to make road improvements, provides for the issuance of general obligation bonds of the County to pay the costs thereof and authorizes the required publications, as follows:
|
Road No. |
Project Location |
|
R259 |
135th St. West from K-42 to 71st St. South. |
This project is included in the adopted CIP, payable in the aggregate from County general obligation bonds ($3,349,500); and County sales tax revenues ($400,000).
This resolution authorizes the sale of County general obligation bonds to provide permanent financing for a portion of the costs of the Projects and also establishes the County’s right to fund project expenditures with available cash and then reimburse the cash accounts with the proceeds of a subsequent bond issue. The expense reimbursement period is 18 months after completion of the projects or three years after the original expenditure is made, whichever is later. This 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.
The bonds authorized in this resolution are scheduled to be sold in 2013.
Alternatives:
This project could be funded in whole with the portion of sales tax dedicated to road construction projects. However, as the anticipated amount of this funding has been fully allocated to other road projects and reserves for future projects, doing so would require the elimination of funding for these projects.
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 $225,000. The financial plan contemplates the bonds will be repaid with an annual property tax levy; based on the current tax roll approximately 0.05 mills would be required to do this. It is expected that this mill levy will not require an increase in the total county tax rate, but rather that it will replace the mill levy that has been used to repay now-redeemed bonds. 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. 68-5,103 authorizes the Board of County Commissioners to determine it necessary to construct improvements on any existing roads or highways in the County and provides for payment of the costs thereof by the issuance of general obligation bonds of the County; provided the amount of bonds issued in any one fiscal year cannot to exceed the greater of 0.5% of the taxable tangible assessed valuation of the County (approximately $23,910,247) or $1,000,000. Before any such bonds shall be issued, a resolution shall be adopted by the Board determining the necessity of said improvements, the roads, highways or streets to be improved, the improvements to be made, the estimated cost thereof and the amount of general obligation bonds to be issued to pay the cost; said resolution to be published once a week for two (2) consecutive weeks in a newspaper of general circulation in the County, and if within 90 days after the last publication of said resolution there shall be filed in the office of the County Clerk a protest petition signed by registered voters of the County equal in number to not less than 3% of the votes cast in the County for the office of governor at the last general election at which a governor was elected, an election shall be called and held in accordance with the general bond law; but if no protest is filed, an insufficient protest is filed or if an election is held and the proposition is approved by a majority of those voting thereon, the Board may issue the general obligation bonds in the amount specified in the resolution. Bonds issued under this statute do not count against the County statutory limits of indebtedness.
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 at any time more than one ratio is exceeded the policy prohibits issuance of additional debt. The issue will not cause more than one ceiling to be exceeded.
Including these bonds and all other debt to be issued in 2013, the ratios will be as follows.
|
Ratio |
Policy maximum |
Estimated actual |
|
Per capita direct debt |
$500 |
$301 |
|
Direct debt as % of full market value |
1.5% |
0.45% |
|
Per capita direct, overlapping & underlying debt |
$3,000 |
$3,365 |
|
Direct, overlapping & underlying debt as % of full market value |
6.0% |
5.06% |
|
Annual debt service as % of budgeted expenditures |
20% |
11.0% |
Outside Attendees: Joe Norton, Gilmore & Bell, P.C., Bond Counsel.
Multimedia Presentation: PowerPoint