FY2015-02 Authorizing General Obligation Bonds for Renewal and Replacement of School Facilities. O 1 Introduced by: Borough Manager
2 Requested by: Borough Assembly
3 Drafted by: Finance Director/Bond Counsel
0 4 Introduced on: 07/17/2014
5 Public Hearing: 08/07/2014
6 Adopted: 08/07/2014
7
8 KODIAK ISLAND BOROUGH
9 ORDINANCE NO. FY2015-02
10
11 AN ORDINANCE OF THE KODIAK ISLAND BOROUGH ASSEMBLY
O 12 AUTHORIZING THE BOROUGH TO ISSUE GENERAL OBLIGATION
13 BONDS IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $10,230,000
14 TO FINANCE THE RENEWAL AND REPLACEMENT SCHEDULE
15 RELATED TO BOROUGH OWNED SCHOOL FACILITIES, PROJECTS
16 WHICH ARE 70% REIMBURSABLE BY THE STATE OF ALASKA, AND
17 TO SUBMIT THE QUESTION OF THE ISSUANCE OF SUCH BONDS TO
18 THE QUALIFIED VOTERS OF THE BOROUGH AT THE OCTOBER 7,
19 2014 REGULAR BOROUGH ELECTION
20
21 WHEREAS, under the provisions of AS 29.47.190, a municipality may incur general
22 obligation debt only after a bond authorization ordinance is approved by a majority of those
23 voting on the question at a regular or special election; and
24
25 WHEREAS, the borough owns and maintains multi-million dollar school facilities; and
E n 26
t, 27 WHEREAS, the borough maintains a Renewal & Replacement Schedule which provides
28 a long term plan to renew and/or replace worn out building components within the school
29 facilities; and
30
31 WHEREAS, many of the Kodiak Island Borough's school facilities have worn out building
32 components such as roofs, floors, underground storage tanks, etc. that have reached the
33 end of their useful life; and
34
35 WHEREAS, the State of Alaska, Department of Education, has a program in which major
36 maintenance projects for school facilities are eligible for 70% reimbursement of the bonded
37 debt service on the eligible portion of bonds authorized by the qualified voters of the
38 Borough; and
39
40 WHEREAS, the Borough views the renewal and replacement projects authorized herein
41 as necessary and beneficial to the community and acquisition of 70% reimbursement
42 money from the state as the most cost effective way of funding these projects; and
43
O 44 WHEREAS, bonds can be sold for a period of 10 to 20 years and qualify for State Debt
45 Reimbursement; and
46
47 WHEREAS, the True Interest Cost (TIC) is estimated to be 2.65 percent (2.65%); and
48
49 WHEREAS, per KIBC 7.10.060D, before a general obligation bond issue election, the
a 50 clerk shall publish the attached notice of the borough's total existing bonded indebtedness
51 (EXHIBIT A) at least once a week for three consecutive weeks. The first notice shall be
52 published at least 20 calendar days before the date of the election. The notice shall state:
Q Kodiak Island Borough Ordinance No. FY2015-02
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53 1. The current total general obligation bonded indebtedness, including authorized
54 but unsold bonds of the borough;
55 2. The cost of the debt service on the current indebtedness; and
56 3. The total assessed valuation of property in the borough.
57 L.
58 NOW, THEREFORE, BE IT ORDAINED BY THE ASSEMBLY OF THE KODIAK ISLAND
59 BOROUGH THAT:
60
61 Section 1: This ordinance is not of a general or permanent nature and shall not become
62 a part of the Kodiak Island Borough Code of Ordinances.
63
64 Section 2: It is hereby determined to be for a public purpose and in the public interest of
65 the Borough to incur general obligation bonded indebtedness in an amount
66 not to exceed Ten Million Two Hundred Thirty thousand Dollars
67 ($10,230,000) for the purpose of paying for renewal and replacement
68 projects (including planning, design, construction, furnishings, and
69 equipment) in an effort to carry out the renewal and replacement schedule
70 related to these facilities as described in Section 4 and for similar projects if
71 money is available after these projects have been completed.
72
73 Section 3: The Borough is authorized to borrow the sum of Ten Million Two Hundred
74 Thirty Thousand Dollars ($10,230,000) to finance the renewal and
75 replacement projects described in Section 4, and the borrowing shall be
76 evidenced by the issuance of general obligation bonds of the Borough;
77 provided that bonds may not be issued for any project unless the project is
78 eligible for debt service reimbursement by the State of Alaska. The full faith
79 and credit of the Borough are pledged for payment of the principal of and
8o interest on the bonds, and ad valorem taxes upon all taxable property in the
81 Borough shall be levied without limitation as to rate or amount to pay the
82 principal of and interest on the bonds when due.
83
84 Section 4: The final maturity of the bonds will be no later than 10.5 years after their date
85 of issuance and the bonds will not be sold if the true interest cost is over 4
86 percent (4%).
87
88 Section 5: The Borough shall submit the following proposition to the qualified voters of
89 the Borough at the October 7, 2014 regular Borough election. The
90 proposition must receive an affirmative vote from a majority of the qualified
91 voters voting on the question to be approved.
92
93 PROPOSITION NO. 1
94 GENERAL OBLIGATION BONDS - $10,230,000
95 SCHOOL FACILITIES RENEWAL AND REPLACEMENT PROJECTS
96
97 Shall the Kodiak Island Borough incur debt and issue general
98 obligation bonds in an amount not to exceed Ten Million Two
99 Hundred Thirty thousand Dollars ($10,230,000) for the
100 purpose of paying the cost of school facilities renewal and
101 replacement projects which are 70% reimbursable by the
102 State of Alaska, that address worn out building components
103 such as roofs, floors, underground storage tanks, etc. that
104 have reached the end of their useful life, including without
Kodiak Island Borough Ordinance No. FY2015-02
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105 limitation the projects described below and other related
106 projects?
Project Name Cost
Kodiak Middle School Underground Storage Tank Replacement 150,000
East Elementary School Flooring Replacement 649,000
Peterson Elementary School Flooring Replacement 363,500
Port Lions School Underground Storage Tank Replacement 200,000
Main Elementary School Underground Storage Tank Replacement 150,000
Kodiak Middle School New Elevator Controls 54,000
1�R Kodiak Middle School School New HVAC(Heating) Controls 1,576,200
Peterson Elementary School New HVAC(Heating) Controls 694,900
Kodiak Middle School Rear Parking Lot Paving 675,800
East Elementary School Cafeteria Roof Replacement 1,248,500
Ouzinkie School Old Wing Flooring Replacement 160,300
Ouzinkie School New Wing Flooring Replacement 41,000
Akhiok School Flooring Replacement 95,500
Kodiak Middle School Fire Alarm Replacement 405,000
East Elementary School Partial Interior Renovation 687,200
Peterson Elementary School Parking Lot Paving 972,000
Kodiak Middle School Bus Ramp Roof Replacement 118,800
Peterson Elementary School Replacement of Boilers 324,600
Main Elementary School Gym Floor Replacement 450,000
Karluk School Flooring Replacement 86,700
Chiniak School Playground Equipment Replacement 101,200
Karluk School Playground Equipment Replacement 101,200
Akhiok School Playground Equipment Replacement 101,200
East Elementary School Replacement of Plumbing Fixtures 256,500
Old Harbor School Playground Equipment Replacement 121,500
Ouzinkie School Playground Equipment Replacement 121,500
Port Lions School Playground Equipment Replacement 121,500
Old Harbor School Underground Storage Tank Replacement 202,400
Project Totals 10,230,000
70% State Reimbursement 7,161,000
107 30% Local Contribution — 3,069,000
108
109 The projects are expected to qualify for not less than 70%
110 State debt service reimbursement, funding for which is
111 subject to annual appropriation. The projects will be
112 scheduled as such to limit disruption to the education of
113 students, and bonds will be sold only as needed to pay
114 project costs. If the State fully funds the debt service
115 reimbursement program, the average annual debt service
116 payable by the Borough after State reimbursement, is
117 estimated to be $353,569. This amount of debt service may
7— 118 require an additional annual property tax levy of $84 per
119 $250,000 of assessed value, or its equivalent. This example
120 of a property tax levy is provided for illustrative purposes only.
121
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122 The bonds shall be secured by a pledge of the full faith and
123 credit of the Borough (Ordinance No. FY2015-02).
124
125 Section 6: The proposition shall be printed on a ballot which may set forth other general
126 obligation bond propositions, and the following words shall be added as
127 appropriate next to an oval provided for marking the ballot for voting by hand
128 or machine:
129 PROPOSITION NO. 1
co YES
n NO
130
131
132 Section 7: Sections 2 and 3 of this ordinance shall become effective only if the
133 proposition described in Section 4 is approved by a majority of the qualified
134 voters voting on the proposition at the October 7, 2014 regular Borough
135 election. The remaining sections of this ordinance shall become effective
136 upon adoption by the Kodiak Island Borough Assembly.
137
138 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH
139 THIS SEVENTH DAY OF AUGUST, 2014
140
141
142 KODIAK ISLAND BOROUGH
143
144 pi ,
y
a '
145 1 Z
146 Jr rrol Frien 4orough Mayor
147
148 A I I EST:
1.49
1.50
151 ' I 9
152 Nova M. Javier, MMC, *rough Clerk
153
154
0
Kodiak Island Borough Ordinance No. FY2015-02
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155 EXHIBIT A
156 KODIAK ISLAND BOROUGH
157 NOTICE OF EXISTING BONDED INDEBTEDNESS
•
158 As of June 30, 2014
159 Pursuant to AS 29.47.190(b) and KIBC 7.10.060(d) requiring governmental units to
160 publish Notice of Existing Bonded Indebtedness before general obligation bond
161 elections, the Kodiak Island Borough publishes the following notice:
GENERAL OBLIGATION BONDS
Authorized But Unsold Balance 6/30/2014
O School Construction 20040 -0- $ 530,000
School Construction 2008A -0- 6,305,000
School Construction 2011 Series One -0- 7,145,000
School Construction 2012A -0- 5,195,000
School Construction 2012B -0- 6,340,000
School Construction 2013 Series one -0- 20,960,000
School Construction 2014 A -0- 22,660,000
$ 69,135,000
162
Fiscal Year
Ending June 30 Principal Interest Total
2015 $ 2,640,000 $ 3,119,885 $ 5,759,885
2016 3,170,000 2,989,362 6,159,362
2017 3,295,000 2,869,212 6,164,212
2018 3,395,000 2,750,463 6,145,463
0 2019 3,540,000 2,617,362 6,157,362
2020 3,670,000 2,478,487 6,148,487
2021 3,815,000 2,336,100 6,151,100
2022 3,980,000 2,166,550 6,146,550
2023 4,160,000 1,985,701 6,145,701
2024 4,355,000 1,789,538 6,144,538
2025 4,570,000 1,572,571 6,142,571
2026 3,310,000 1,402,025 4,712,025
2027 3,470,000 1,238,228 4,708,228
2028 3,645,000 1,064,121 4,709,121
2029 3,205,000 881,234 4,086,234
2030 3,365,000 720,315 4,085,315
2031 3,535,000 551,359 4,086,359
2032 3,085,000 381,190 3,466,190
2033 3,240,000 226,940 3,466,940
2034 1,690,000 84,500 1,774,500
O $ 69,135,000 $ 33,225,143 $ 102,360,143
�! 163
164 Total Assessed value January 1, 2014 $1,181,899,002
165 Karleton G Short Nova M. Javier, MMC
166 Finance Director Borough Clerk
"*, Kodiak Island Borough Ordinance No. FY2015-02
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