Loading...
01. Resolution 4990 - Calling for Sale of Bonds - Airport ImprovementsCharles A. Harball City Attomey TO: FROM: City of Ka.ispep Office of City Attorney 312 First Avenue East P.O. Box 1997 Kalispell, MT 59903-1997 MEMORANDUM Mayor Pamela B. Kennedy and Kalispell City Council Charles Harball, City Attorney James H. Patrick, City Manager Tel 406.758.7708 Fax 406.758.7771 charball Ckalispell.com SUBJECT: Resolution 4990 to Authorize the Negotiated Sale of Up to $2,000,000 of Tax Increment Urban Renewal Revenue Bonds for the Kalispell City Airport Redevelopment Plan MEETING DATE: Monday, April 4, 2005 Regular Council Meeting BACKGROUND: On February 22, 2005, the Kalispell City Council adopted Resolution 4978 calling for a public hearing on the proposed modification of the Kalispell Urban Renewal Plan to approve a proposed project as an Urban Renewal Project and to finance the Kalispell City Airport Redevelopment .Plan through the issuance of tax increment urban renewal bonds. The public hearing for the purpose of taking public testimony took place March 7, 2005. Dorsey and Whitney, bond counsel for the City, has reviewed the City's proposal and, in conference with D.A. Davidson, recommends that the City negotiate for the sale of up to $2,000,000 of up to twenty-year tax increment urban renewal revenue bonds. Counsel tabled this matter on March 21, 2005 and directed counsel to add language to the recitals of the resolution pointing out that Counsel authority and discretion of the City to rebate tax increment to the various local taxing authorities during the term of the increment. RECOMMENDATION: That Council make an amendment to add the underlined language at recital 1.01 and then consider and pass resolution 4990 authorizing the negotiated sale of bonds for the purpose of financing the Kalispell City Airport Redevelopment Plan. FISCAL EFFECTS: The City will be obligated for up to twenty years for the bonds issued, depending upon the terms to be negotiated. Staff forecasts that it will have the necessary positive cash flow to pay the bond obligation and the investment will ultimately increase the value of the airport to the City. Respectfully submitted, F' Z_rball, Charles y Attorney L4J es H. Patrick, City Manager RESOLUTION NO. 4990 RESOLUTION RELATING TO UP TO $2,000,000 URBAN RENEWAL AIRPORT TAX INCREMENT REVENUE BONDS, SERIES 2005; AUTHORIZING THE ISSUANCE AND PRIVATE NEGOTIATED SALE THEREOF FOR THE PURPOSE OF FINANCING A PORTION OF THE COSTS OF AN AIRPORT URBAN RENEWAL PROJECT SUBJECT TO RATIFICATION AND APPROVAL BY THE CITY COUNCIL; AND DELEGATING CERTAIN DUTIES RELATED THERETO TO THE MAYOR, CITY MANAGER AND FINANCE DIRECTOR. BE 1T RESOLVED by the City Council (the "Council") of the City of Kalispell, Montana (the "City"), as follows: Section 1. Recitals. 1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43 (the "Act"), the City is authorized to create an urban renewal area, prepare and adopt a redevelopment plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to taxes collected in such area, issue its bonds to pay the costs of such projects and pledge to the repayment of the bonds the tax increment and other revenues derived from projects undertaken within the urban renewal area. The City has the further authority and discretion, during the term of the tax increment district, to rebate tax increment received by the City to the County and School District, if, after the issuance of bonds funds become available within the urban renewal account that are in excess of those funds led ed to retire the bonds. 1.02. Pursuant to Ordinance No. 1242, adopted July 1, 1996, the City Council approved and adopted the Kalispell City Airport/Athletic Complex Redevelopment Plan (the "Plan") and created its City Airport/Athletic Complex Urban Renewal District (the "Airport Urban Renewal District") as an urban renewal district under the Act. 1.03, The goals and objectives as stated in the Plan are: 1. to minimize hazards to navigation; 2. to develop the airport in accordance to any airport layout plan; 3. to increase development opportunities on nearby properties; 4. to promote compatible land use in and around the airport; and 5. to establish a funding mechanism for airport operations. It has been proposed that to further the City's goals and objectives as stated in the Plan, the City should finance certain improvements in the District, consisting of: the purchase of land and improvements currently owned by Red Eagle Aviation; the northwest ramp and taxiways; northwest utilities; an internal vehicle access road (16' wide); and the engineer's construction of the automatic vehicle security gate (collectively, the "Project Improvements"). The estimated cost of the Project Improvements is $1,700,000. 1.04. Pursuant to the Act and the procedures contained in the Plan, the City by Resolution No. 4978, approved by the City Council on February 21, 2005, called for a public hearing on the Project. A public hearing was held on March 7, 2005. Pursuant to Resolution No. 4989, adopted simultaneously herewith (the "Resolution"), the City designated and approved the Project Improvements as an Urban Renewal Project. The Project Improvements may be constructed by the City pursuant to the Plan and may be financed in whole or in part from proceeds of Urban Renewal Airport Tax Increment Revenue Bonds. 1.05. The Council has investigated the facts necessary and hereby finds, determines and declares it to be necessary and desirable for the City to offer for sale $2,000,000 of its Urban Renewal Airport Tax Increment Revenue Bonds, Series 2005, for the purpose of financing the above referenced Project, and paying certain costs incidental to the sale and issuance of the Bonds and to establish the debt service reserve securing the Bonds. 1.06. The bonds shall not pledge the general credit of the municipality and shall be payable solely from the tax increment revenues hereinafter described. The City Finance Director has preliminarily determined that estimated tax increment to be received in the district, based on the tax increment revenues received in the preceding fiscal years, will be sufficient to pay the principal of and interest on the $2,000,000 in principal amount of Tax Increment Urban Renewal Bonds payable over a term of 20 years. Section 2. Declaration of Intention to Sell Bonds,• Term of Bonds. Pursuant to the authority described above and the Act, this Council declares its intention to issue and sell the City of Kalispell Airport Urban Renewal District Tax Increment Bonds in an aggregate principal amount not to exceed $2,000,000, for the purpose of providing funds to finance a portion of the costs of the Project, and for funding certain costs incidental to the sale and payment of the Bonds, including the establishing of a debt service reserve. The Bonds shall be dated as of the date of original issue, shall be issued in one series designated Series 2005, and shall bear interest, payable semiannually January 1 and July 1 of each year commencing January 1, 2006, payable over a term not to exceed 20 years. Section 3. Sale of Bonds; Bond Purchase Agreement. Pursuant to the Act, this Council hereby determines that it would be in the best interests of the City to sell the Bonds at a private negotiated sale to D.A. Davidson & Co., of Great Falls, Montana (the "Underwriter"). The City Manager and City Finance Director along with the City Attorney and Dorsey & Whitney LLP, the City's bond counsel, are hereby authorized and directed to work with the Under NTiter to establish the appropriate terms and conditions for the sale of the Bonds, and the City Manager and Finance Director are hereby authorized to negotiate the purchase price, redemption features, and interest rate on the Bonds and make recommendations to the City Council. Upon final approval of the interest rate, purchase price, and other terms and conditions of the sale of the Bonds, the City Manager and Finance Director shall be authorized to execute and deliver on behalf of the City a Bond Purchase Agreement. Section 4. Official Statement. The City Manager and City Finance Director with the City Attorney and Dorsey & Whitney LLP, the City's bond counsel, are authorized to prepare on behalf of the City an Official Statement, to be distributed by the Underwriter to prospective purchasers of the Bonds. The Official Statement shall contain such information as shall be advisable and necessary to describe accurately the City, the security for, and the terms and conditions of, the Bonds. The City Manager and City Finance Director along with the City 2 Attorney are authorized on behalf of the Council to deem the Official Statement near "final" as of its date, in accordance with Rule 15c2-12(b)(I) under the Securities Exchange Act of 1934. The form of the Bonds and the final terms and conditions thereof shall be prescribed by a subsequent resolution to be adopted by this Council. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS 41'" DAY OF APRIL, 2005. ATTEST: Theresa White City Clerk 3 Pamela B. Kennedy Mayor