HomeMy WebLinkAboutR-2010-060 Kiwanis Park Improvements FundingA RESOLUTION
RESOLUTION NO. R-2010-60
of the City of Yakima, Washington, authorizing one or more draws in the
aggregate principal amount of not to exceed $500,000 from the City's line
of credit to fund costs associated with the acquisition, construction,
redevelopment, and improvement of Kiwanis Park.
WHEREAS, the City Council of the City of Yakima, Washington (the "City") passed
Ordinance No. 97-29 on May 6, 1997 establishing a line of credit in the aggregate principal
amount of not to exceed $5,000,000 to provide funds for various City capital projects; and
WHEREAS, the City issued its Limited Tax General Obligation Bond, 1997 (KeyBank
Line of Credit), dated June 9, 1997 (the "Bond"), to KeyBank National Association (the "Bank")
to evidence the line of credit; and
WHEREAS, Ordinance No. 2002-31 of the City, passed on May 21, 2002, amended
certain terms of Ordinance No. 97-29, including extending the maturity date of the Bond until
June 1, 2007;.and
WHEREAS, Ordinance No. 2007-19 of the City, passed on April 17, 2007, further
amended certain terms of Ordinance No. 97-29, including extending the maturity date of the
Bond until June 1, 2012; and
WHEREAS, Section 11 of Ordinance No. 97-29, as amended by Ordinance No. 2002-31
and Ordinance No. 2007-19 (together, the "Ordinance"), authorizes the City to draw on the Bond
in a minimum amount of $10,000 subject to the approving legal opinion of bond counsel; and
WHEREAS, the City wishes to acquire, construct, redevelop and make certain capital
improvements to Kiwanis Park, a City -owned community park (the "Project"); and
WHEREAS, to provide interim financing for costs of the Project, the City hereby finds it
in the best interest of the City to authorize one or more draws on the Bond in the aggregate
principal amount of riot to exceed $500,000 as further provided herein; NOW, THEREFORE,
BE IT RESOLVED BY the City of Yakima, Washington, as follows:
Section 1. Authorization of Draws. In accordance with Section 11 of Ordinance
No. 97-29, as amended (the "Ordinance"), the City Council hereby authorizes one or more
draws on the City's Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit) (the
"Bond") in the aggregate principal amount of not to exceed $500,000, to provide funds for the
Project. The outstanding principal balance of the draws shall bear interest and shall be payable
as provided in the Ordinance. All proceeds received from draws on the Bond pursuant to this
authorization shall be deposited into the fund or account designated by the Director of Finance
and Budget and used to finance costs of the Project. The City hereby authorizes the Director of
Finance and Budget to take any actions and execute such documents as may be necessary and
required by the Bank to complete such draws and to carry out the terms of this resolution.
Section 2. General Authorization; Ratification of Prior Acts. The Director of Finance
and Budget and other appropriate officers of the City are authorized to take any actions and to
execute documents as in their judgment may be necessary or desirable in order to carry out the
terms of, and complete the transactions contemplated by, this resolution. All acts taken
pursuant to the authority of this resolution but prior to its effective date are hereby ratified.
Section 3. This resolution shall be in effect from and after its adoption in accordance
with law.
ADOPTED at a regular meeting of the City Council of the City of Yakima, Washington,
this 18th day of May, 2010.
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
-2-
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Micah Cawley, Mayor
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CERTIFICATE
I, the undersigned, Clerk of the City of Yakima, Washington (the "City"), and keeper of
the records of the City Council (the "Council"), DO HEREBY CERTIFY:
1. That the attached Resolution No. R-2010- 43.0 is a true and correct copy of a
resolution of the City Council, as finally adopted at a regular meeting of the Council held on the
18th day of May, 2010, and duly recorded in my office.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that a
legal quorum was present throughout the meeting and a legally sufficient number of members of
the Council voted in the proper manner for the passage of said Resolution; that all other
requirements and proceedings incident to the proper adoption of said Resolution have been fully
fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand this 0 day of May, 2010.
•
•
BUSINESS OF THE CITY COUNCIL
YAKIMA; WASHINGTON
AGENDA STATEMENT
Item No. 12-
For
2
For Meeting of: 05/18/10
ITEM TITLE: A Resolution of the City of Yakima, Washington, authorizing one or more draws
in the aggregate principal amount not to exceed $500,000 from the City's Line of
Credit to fund costs associated with the acquisition, construction, redevelopment,
and improvement of Kiwanis Park
SUBMITTED BY: Rita DeBord, Director of Finance 575-607Q
CONTACT PERSON: on Lorberau, Treasury Services Officer, 575-6024
SUMMARY EXPLANATION:
During the 2009 budget review process the Yakima City Council approved a policy issue that
includes using up to a $500,000 draw from the City's line of credit facility to pay for construction
of recreational features included in Upper Kiwanis Phase 1 development.
The total project is estimated to cost $1,225,000 and the use of the line of credit was part of the
local match requirement in the RCO Grant. The proposed funding sources comes from Parks
Capital and consists of a $500,000 RCO Grant, $225,000 in REET 1 Parks Capital allocation,
and $500,000 from short term borrowing (the line of credit) to be repaid over 5 years from Real
Estate Excise Tax ("REET 1").
The ordinance establishing the City's line of credit requires: (1) a Resolution be adopted by City
Council authorizing the use of the line of credit and stating the intended purpose of any such
borrowing, and (2) the City to obtain Bond Counsel's opinion that the interest and repayments
on the specified borrowing from the line of credit are eligible to be tax exempt.
• The attached Resolution, if approved by Council, will authorize the use of the City's Line
of Credit with Key Bank up to $500,000 to fund costs associated with the acquisition,
construction, redevelopment, and improvement of Kiwanis Park.
• Bond Counsel's (K.L.Gates) letter affirming the tax exempt state of the draw is attached.
Resolution XX Ordinance . Other (Contract)
Mail to (name and address): Key Bank Line of Credit — KL Gates
FUNDING SOURCE: Rpayment from REET 1
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Adopt Resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
2009 MAJOR POLICY ISSUE
DEPARTMENT: Public Works DIVISION: Parks & Recreation
POLICY ISSUE TITLE: Develop Upper Kiwanis Park, Phase 1 Financing - Budgeted
1. Proposal - In order to accomplish Upper Kiwanis Phase 1 development as submitted in the
City's successful Recreation and Conservation Office (RCO) Grant, approximately $1.225 million
is necessary. $600,000 is currently secured through a State RCO Grant of $500,000 and $100,000
in Parks Capital. The remaining need of $625,000 is proposed to come from short-term (5 -year)
financing and additional contributions from Capital Reserves. Sun LC (Service Club Trust) has
purchased and transferred title to five parcels on the northwest corner of Kiwanis Park. The
value of this donation is $560,000 and is part of the local match in the RCO Grant.
2. a. Fiscal Impact - Total project budget: $1,225,000
b.
c.
Parks Capital $1,225,000
Revenue:
Grant $500,000
Line of Credit or Interfund Loan $500,000
2008 (Sr 2009 REET1 Allocation $225,000
Net $1,225,000
The remaining $625,000 is proposed to come from a $500,000 five-year line of credit from
the Parks allocation of REET 1 dollars and an additional $125,000 contributed towards this
project from Parks Capital (which in reality is REET 1 dollars contributed annually to the
Parks Capital fund).
With the recent turmoil in the credit markets, staff will monitor the least expensive way
to accomplish the short-term borrowing. Options include 1) a draw on the line of credit
(currently budgeted, but probably least desirable from a market perspective or 2) an.
Interfund loan. This will be decided based on market conditions when the cash flow is
needed.
Proposed Funding Source - The proposed funding source is Parks Capital consisting of
$500,000 in a RCO Grant, and $225,000 in REET 1 Parks Capital allocation, and $500,000 from
short term borrowing repaid from REET 1.
Public Impact - The citizens of East Yakima will see a number of new amenities in Upper
Kiwanis Phase 1 development, including, but not limited to, volleyball, playground, certain
Title 12 improvements, new restroom facilities, and one of the proposed three to four new
Little League baseball fields envisioned for Upper Kiwanis. More fields cannot be built at
this time due to lack of funding and the disposition of Kiwanis Pond currently undergoing
wetland review and mitigation analysis.
Policy Issues • Public Works - 7
d. Personnel Impact'- None.
e. Required Changes in City Regulations or Policies - None.
f. Legal Constraints, if applicable - None.
g.
Viable Alternatives,- Staff considered complete infusion of REET 1 dollars ($725,000), but
this option was not implemented so that a larger level of remaining REET 1 resources would
be available for other purposes. A second alternative was to bond the $725,000 needed
for this project over a 10 -15 year period. It was determined that the 5 -year line of credit
was the better option to recommend to Council. After that recommendation was made
the Financial markets have been in turmoil; any borrowing will be more expensive than
previously estimated.
3. Conclusion and/or Staff Recommendation - Staff respectfully requests approval of the policy
issue as defined above for the five-year line of credit proposal.
8 - Public Works • Policy Issues
•
REFUSE
DEPT./DIV. POLICY ISSUE
REQUEST/JUSTIFICATION
PROPOSED FUNDING
SOURCE
PERSONNEL
SALARY / BENEFITS
NON -PERSONNEL
COMMENTS
Upgrade Solid Waste
Maintenance Worker position to
Solid Waste Code Compliance
Officer position
Refuse Operating
Fund
Net Increase $3,000
Budgeted
Upgrade Solid Waste
Maintenance Worker position to
Solid Waste Crew Leader position
Refuse Operating
Fund
Net Increase $3,125
Budgeted
PARKS AND RECREATION
DEPT./DIV. POLICY ISSUE
REQUEST/JUSTIFICATION
PROPOSED FUNDING
SOURCE
PERSONNEL
SALARY / BENEFITS
NON -PERSONNEL
COMMENTS
Solicit requests for proposals
Parks and
(RFP's) to lease Fisher Park
starting in 2010 (no fiscal effect
in 2009)
Recreation Fund
Develop Upper Kiwanis Park —
Parks Capital
Parks
Phase 1 Financing
Capital
1. State Grant
$1,225,000
2. Municipal Debt -
Revenue:
Line of Credit or
1. Grant $500,000
Interfund Loan
2. Debt $500,000
(repaid from
3. REET1 $225,000
REET1)
Net $1,225,000
3. 2008 and 2009
REET1
Capital allocation
8 — Exhibit I1 ® Policy Issue Summary (2009 Budget Fore cast )
•K&Lk3ATES
May _, 2010
City of Yakima
Yakima, Washington
KeyBank National Association
K&L Gates LLP
925 Fourth Avenue
Suite 2900
Seattle, WA 98104-1158
t 206.623.7580 www.klgates,com
Re: Request for Draw on the City of Yakima, Washington, Limited Tax General
Obligation Bond, 1997 (KeyBank Line of Credit)
Ladies and Gentlemen:
We have acted as bond counsel for the City of Yakima, Washington (the "City"), in
connection with its Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit),
in the aggregate principal amount of not to exceed $5,000,000 (the "Bond"), establishing a
line of credit with KeyBank National Association (the "Bank") to provide funds for acquiring
and constructing various City capital projects. The Bond was issued pursuant to Ordinance
No. 97-29 of the City passed on May 6, 1997, as amended by Ordinance No. 2002-31, as
further amended by Ordinance No. 2007-19 (collectively, the "Bond Ordinance"). Pursuant
to the Bond Ordinance, each draw on the line of credit is subject to the prior written approval
of bond counsel to the City. Pursuant to Resolution No. R-2010- adopted by the City on
May 18, 2010, the City has authorized and intends to make one or more draws in an amount
of not to exceed $500,000 on the Bond to provide financing for the acquisition, construction,
redevelopment and improvement to Kiwanis Park, a City -owned community park (the
"Project").
Based upon our examination of the Bond Ordinance, Resolution No. R 2010-_, and
other documents that we believe to be necessary, it is our opinion, as of this date and under
existing law, that interest on draws on the Bond for the purpose of financing the Project is
excludable from gross income for federal income tax purposes under existing law. The
opinion set forth in the preceding sentence is subject to the condition that the City comply
with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that
must be satisfied subsequent to the issuance of the Bond in order that the interest thereon be,
and continue to be, excludable from gross income for federal income tax purposes. '.The City
has covenanted to comply with all applicable requirements. Failure to comply with certain of
such covenants may cause interest on the draws for the purpose of financing the Project to be
included in gross income for federal income tax purposes retroactively to the date of issuance
of the Bond.
May , 2010
Page 2
Except as expressly stated above, we express no opinion regarding any other federal
or state income tax consequences of acquiring, carrying, owning or disposing of the Bond.
This supplemental opinion is given as of the date hereof, and we assume no
obligation to update, revise or supplement this opinion to reflect any facts or circumstances
that may hereafter come to our attention or any changes in law that may hereafter occur.
Very truly yours,
K&L, GATES LLP
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