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k't <br />MEQUEST FOR COUNCIL ACTION <br />Date: 10/24/11 <br />Item No.: 11 . a <br />Department Approval City Manager Approval <br />Item Description: Public Hearing to Amend the City's Redevelopment Plan and Industrial <br />Development District 9 1 Plan in Conjunction with the Sale of Bonds to Finance <br />the Construction of a new Fire Station and Park Improvements <br />11 BACKGROUND <br />2 At the October 10, 2011 City Council meeting, the Council established a public hearing to amend the City's <br />3 Redevelopment Plan and Industrial Development District 9 1 Plan in conjunction with the sale of bonds to <br />4, finance the construction of a new fire station and park improvements. <br />6 These Plans will be used in conjunction with the City's Port Authority powers which will be formally <br />"7 enabled in the form of an ordinance. The creation of the ordinance will require separate Council action. <br />8 These Plans were created in 1990 and modified in 1991 to encompass the entire City. They were enacted to <br />9 guide future redevelopment activities including public facilities and amenities. <br />110 <br />11 The City's Bond Counsel believes the existing language within these Plans satisfies the requirements <br />12 necessary to issue fire station bonds under the City's Port Authority. However, to ensure the City's intent <br />13 with regard to funding a new fire station and the proposed park improvements is clearly communicated, it is <br />14, suggested that these Plans be amended. Once the Plans are amended, the City Council will be asked to <br />15 authorize the issuance of the bonds under the City's Port Authority. <br />116 <br />1 7 To maximize the marketability of the bonds while preserving the lowest possible borrowing rate, it is <br />11 111",,'11 recommended that the City issue no more than $, 10 million in bonds per year. By doing so, the bonds will <br />119 be considered under IRS Regulations to be 'bank qualified'. This means that smaller, local banks will be <br />2o able to bid on the bonds which should effectively drive the interest rates down — by an expected 0.25%. <br />2 i This translates to an overall savings of approximately $,900,000 in borrowing costs on the proposed bonds. <br />22 <br />Based on this approach, it is suggested that the Council consider the following tentative timeline: <br />Bond Sale Timeline (tent ti*ve) <br />October, 2011 Authorize the sale of $10 million in bonds ($,8 million for the fire station and <br />$,2 million for parks) <br />November, 2011 Date of sale for $10 million <br />April, 2012 Authorize the sale of $, 10 million in bonds for parks <br />Page I of 5 <br />