The City Council is asked to conduct a second reading of Ordinance No. 2020-2213, which would authorize the issuance of Non-Ad Valorem Revenue Notes in one or more series, not to exceed $11,000,000 to finance the cost of acquisition, design, construction, reconstruction, renovation, and equipping of 3 capital projects: Parking Garage Structure, Construction of Fire Station No. 2, and Library Renovations.

Consistent with the strategy laid out in the City’s FY20-21 CRA Budget, action has been taken to move forward with the financing of the construction of a parking garage in the City’s downtown.  After going through the RFP process and receiving such favorable interest rates, city staff determined that it would be advantageous to add the library renovations and the construction of Fire Station No. 2 to the financing package.  Originally, city staff was trying to fund the library renovations through a USDA loan.  However, based on discussions with USDA and past history of working with them, the process for securing a loan is quite complex and lengthy and interest rates will most likely not be as favorable as they are currently.  Recognizing that the USDA offers a grant of up to 35%, we inquired about the likelihood of the City receiving a grant.  We were informed that, although grant funding is available, there is a large pool of applications, so grant funding is competitive and the City would most likely receive grant funding of less than 35%.  City staff applied for a Community Development Block Grant (CDBG) to fund the construction of Fire Station No. 2. If awarded, the City will use the grant proceeds to repay a portion of the Revenue Note with a 1% prepayment penalty.

Summary of Financing:

• $6,500,000 – Parking Garage

•   2,400,000 – Construction of Fire Station No. 2

•   2,000,000 – Library Renovations

•      100,000 – Issuance Costs

  $11,000,000

The Taxable Revenue Note will be financed at an interest rate of 1.11%.  The Tax Exempt Revenue Note will be financed at an interest rate of 1.54%.

The CRA would be responsible for repaying the portion of the Revenue Note pertaining to the parking garage.  The City will repay the portion of the Revenue Notes pertaining to the construction of Fire Station No. 2 and the library renovations using Penny for Pasco funding.

A representative from the Ford & Associates, Inc. (City's Financial Advisors) and Bryant Miller Olive (City's Bond Counsel) is available for questions.