Agenda Item # 1
Columbus Consolidated Government
Council Meeting
January 26, 2010
Agenda Report # 463
TO: Mayor and Councilors
SUBJECT: Columbus Building Authority Lease Revenue Bonds, Series 2010
INITIATED BY: Finance Department
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Recommendation: Approve a resolution ratifying action taken by the Columbus
Building Authority (CBA) to issue Lease Revenue Bonds in the accordance with
Resolution No. 343-09, ratifying the actions of the Finance Director approving
the best bids for the bonds, reaffirming authorization for the mayor to
transfer property to the Columbus Building Authority, reaffirm the provision of
Resolution No. 343-09 and 02-10 which are not in conflict, and authorizing the
Mayor and other officials to take such further actions as is necessary to
provide for the issuance and delivery of the bonds and the refunding bonds.
Background: The 2009 Other Local Option Sales Tax was effective January 1,
2009. The Council of Columbus, Georgia has expressed their intent to utilize
70% of the new LOST revenue for enhancements to Public Safety and 30% of the
LOST revenue for roads and infrastructure improvements pursuant to Resolution
No. 226-08. Projects were identified to be funded from this LOST. The list of
projects was presented to the Council of Columbus on September 28, 2009.
Resolution No 343-09 authorized the issuance of $131,500,000 in CBA bonds. The
funding source for the lease payments of these Columbus Building Authority
Lease Revenue Bonds will be the 2009 Other Local Option Sales Tax. The 2010
CBA bonds total $97,330,000, which includes the 2010 projects listed plus the
refunding of the Series 1997A CBA Lease Revenue Bonds. The bonds are issued in
3 series. Series A is tax exempt Bonds for $22,180,000, includes the refunding
of the 1997A CBA Lease Revenue Bonds. Series B is taxable Build America Bonds
with a 35% federal rebate for $72,320,000. Series C is taxable Build America
Bonds-Recovery Zone Economic Development with a 45% federal rebate for
$2,090,000. The average interest cost after the federal subsidy is 3.6644%.
2010 PROJECTS
Fire / EMS Station $ 2,000,000
Road Projects 23,600,000
Flood Abatement / Stormwater 23,200,000
City Service Center 9,500,000
Parking Garage 9,500,000
Natatorium 7,500,000
Recycling / Sustainability Center 8,500,000
Ice Rink 7,700,000
TOTAL $ 91,500,000
FUTURE BOND PROJECTS
Road Projects $ 7,500,000
Correctional Facilities 31,000,000
Cooper Creek Tennis Center 1,500,000
TOTAL $ 40,000,000
Analysis: The Preliminary Official Statement (POS) has been completed and
published. The review process with the rating agencies has been completed.
Moody?s has upgraded our bond rating to Aa2 from Aa3. Standard & Poor?s has
also upgraded our bond rating to AA+ from AA. The Notice of Sale has been
completed and published on December 29, 2009. The bids were received on
January 12, 2010. The Columbus Building Authority authorized issuance and
delivery of the bonds on January 13, 2010. The bond validation process will be
completed on January 25, 2010 the Official Statement (OS) has been completed
and is being published, and the closing date on the bonds has been set for
January 28, 2010.
Alternatives: The alternative to funding these projects through the issuance of
Columbus Building Authority Lease Revenue Bonds is pay-as-you-go. By utilizing
the pay-as-you-go method, the City would not be able to complete these projects
in a short period of time or take advantage of the current favorable
construction market.
Financial Considerations: The estimated annual revenue from the 2009 Other
Local Option Sales Tax for FY2010 is $28,800,000; $7,800,000 reserved for the
2011 rollback requirement, $14,700,000 allocated to Public Safety, and
$6,300,000 allocated to Infrastructure/Roads. After the rollback requirement
is met, future revenue allocations beginning in FY2012 is estimated to be $20.6
million for Public Safety and $8.8 million to Infrastructure/Roads. The annual
lease payments (debt service requirement) for the $131,500,000 is estimated to
be $2,310,000 from the Public Safety allocation and $6,895,000 from the
Infrastructure/Roads allocation.
The Refunding of the 1997A Columbus Building Authority Lease Revenue
Bonds will recognize a savings of $650,000 in the remaining debt service
payments.
The best bid for Series A Bonds was submitted by Hutchinson, Shockley,
Erley & Co. Merrill Lynch & Co submitted the best bid for Series B Bonds,
which at the time of the bid included Series C Bonds.
Legal Considerations: Resolution requires council approval.
Recommendations/Actions: Approve a resolution ratifying action taken by the
Columbus Building Authority (CBA) to issue Lease Revenue Bonds in the
accordance with Resolution No. 343-09, ratifying the actions of the Finance
Director approving the best bids for the bonds, reaffirming authorization for
the mayor to transfer property to the Columbus Building Authority, reaffirm the
provision of Resolution No. 343-09 and 02-10 which are not in conflict, and
authorizing the Mayor and other officials to take such further actions as is
necessary to provide for the issuance and delivery of the bonds and the
refunding bonds.
A RESOLUTION
NO. _______
A RESOLUTION OF THE COUNCIL OF COLUMBUS, GEORGIA (THE ?COUNCIL?),
RATIFYING ACTIONS TAKEN BY THE COLUMBUS BUILDING AUTHORITY (THE ?AUTHORITY?) TO
ISSUE ITS LEASE REVENUE BONDS IN ACCORDANCE WITH THE REQUEST OF THE COUNCIL
CONTAINED IN RESOLUTIONS NO. 343-09 AND NO. 2-10; TO RATIFY THE ACTIONS OF THE
FINANCE DIRECTOR OF COLUMBUS APPROVING THE BEST BIDS FOR THE BONDS; TO REAFFIRM
AUTHORIZATION FOR THE MAYOR TO TRANSFER PROPERTY TO THE AUTHORITY AND TO
EXECUTE THE LEASE; TO REAFFIRM THE PROVISIONS OF RESOLUTION NO. 343-09 AND
RESOLUTION NO. 2-10 WHICH ARE NOT IN CONFLICT HEREWITH; TO AUTHORIZE THE MAYOR
AND OTHER OFFICIALS OF COLUMBUS TO TAKE SUCH FURTHER ACTIONS AS ARE NECESSARY
TO PROVIDE FOR THE ISSUANCE AND DELIVERY OF THE BONDS; AND FOR OTHER PURPOSES.
WHEREAS, the Council as the governing body for Columbus, Georgia
(?Columbus?), requested, by Resolution No. 343-09, adopted on October 13,
2009, that the Authority issue revenue bonds to provide funds to acquire,
construct, install, and develop certain projects and facilities to be used for
governmental, proprietary, and administrative functions of Columbus,
(collectively, the ?2010 Projects?); and
WHEREAS, Resolution No. 343-09 also requested that the Authority issue
revenue bonds to currently refund and redeem all outstanding Columbus Building
Authority Lease Revenue Bonds, Series 1997A (the ?Series 1997A Bonds?); and
WHEREAS, Resolution No. 2-10 adopted on January 12, 2010, determined
that the most feasible manner of acquiring, constructing, and equipping the
2010 Projects and financing the refunding of the Series 1997A Bonds was to
issue approximately $97,330,000 in aggregate principal amount of Columbus
Building Authority Lease Revenue Bonds in two series, designated as the Capital
Improvement and Refunding Lease Revenue Bonds, Series 2010A (the ?Series 2010A
Bonds?) and the Capital Improvement Lease Revenue Bonds, Taxable-Build America
Bonds?Direct Payment, Series 2010B (the ?Series 2010B Bonds?); and
WHEREAS, in accordance with an Official Notice of Sales dated December
29, 2009, the Authority received electronic bids for the purchase of the Bonds
(hereinafter defined) on January 12, 2010, and the Finance Director of
Columbus, with the assistance of Government Funding Advisory Associates, as
financial advisor, reviewed the bids and determined that the best bid for the
Series 2010A Bonds was submitted by Hutchinson, Shockley, Erley & Co., and that
the best bid for the Series 2010B Bonds, which at the time the bids were
received included the principal amount of the hereinafter described Series
2010C Bonds, was submitted by Merrill Lynch & Co., and said bids were accepted
on behalf of the Authority and Columbus; and
WHEREAS, after bids were received for the Series 2010A Bonds and the
Series 2010B Bonds, it was determined by the Finance Director of Columbus in
consultation with said financial advisor, that the most feasible manner of
financing the 2010 Projects and refunding the Series 1997A Bonds was to issue
$96,590,000 in aggregate principal amount of Columbus Building Authority Lease
Revenue Bonds in three series, designated as the Capital
Improvement and Refunding Lease Revenue Bonds, Series 2010A in the aggregate
principal amount of $22,180,000, the Capital Improvement Lease Revenue Bonds
(Taxable ? Build America Bonds ? Direct Payment), Series 2010B, in the
aggregate principal amount of $72,320,000, and the Capital Improvement Lease
Revenue Bonds (Taxable ? Recovery Zone Economic Development Bonds ? Direct
Payment), Series 2010C, in the aggregate principal amount of $2,090,000 (the
?Series 2010C Bonds?); and
WHEREAS, on January 13, 2010, the Authority adopted a bond resolution
authorizing the issuance of the Series 2010A Bonds, Series 2010B Bonds and the
Series 2010C Bonds (collectively, the ?Bonds?); and
WHEREAS, payment of the Bonds and any bonds issued on a parity
therewith and the interest thereon shall be secured by a first and prior pledge
of and charge or lien on the Basic Rent to be paid henceforth by Columbus for
the use of the 2010 Projects and continued use of the projects financed with
proceeds from the Series 1997A Bonds pursuant to the provisions of a lease
contract to be entered into as of the date of issuance of the Bonds (the ?Lease
?), the final form of which has been submitted to the Council for approval; and
WHEREAS, the Lease provides for the payment by Columbus, as Lessee, to
the Authority or to its assignee for the account of the Authority, of the
amounts to be set forth in the Lease sufficient to pay the principal of and
interest due on the Bonds authorized as the same shall become due and payable;
and
WHEREAS, it is proper that the Council ratify and approve the actions
of the Finance Director of Columbus and of the Authority in accordance with the
requests of the Council.
NOW, THEREFORE, BE IT RESOLVED by the Council as follows:
The Council hereby approves and ratifies the actions of the Authority in
proceeding with financing for the 2010 Projects through the issuance of the
Bonds and hereby approves the actions taken by the Authority, the Finance
Director of Columbus, and officials of Columbus, including specifically the
acceptance of the best bids and the issuance of the Bonds in three series, as
described in the Preamble to this resolution.
2. The final form of the Lease submitted to the Council is approved.
Further, the authorizations contained in Resolution 343-09 and in Resolution
No. 2-10 for the Mayor to execute the Lease and such deeds and other documents
described in the Resolution No. 343-09 and in Resolution No. 2-10 are hereby
confirmed.
3. The Mayor, City Manager, Finance Director, City Attorney and such
other officers or agents of Columbus as may be required are directed to take
such actions as are necessary to provide security for payment of the Bonds, to
fulfill the obligations of Columbus pursuant to the Lease, and to execute
closing documents necessary for the issuance of the Bonds, as the same shall be
delivered, supplemented, or amended, and to take such other actions as may be
required in accordance with the intents and purposes of this resolution.
4. All provisions of Resolution No. 343-09 and of Resolution No. 2-10,
which are not in conflict herewith, are hereby restated, ratified, and
confirmed, as fully as if set forth herein verbatim.
_______________________
Introduced at a regular meeting of the Council of Columbus, Georgia,
held January 26, 2010, and adopted at said meeting by the affirmative vote of
members of said Council.
Councilor Allen voting __________.
Councilor Anthony voting __________.
Councilor Baker voting __________.
Councilor Barnes voting __________.
Councilor Davis voting .
Councilor Henderson voting __________.
Councilor Hunter voting __________.
Councilor McDaniel voting __________.
Councilor Turner Pugh voting __________.
Councilor Woodson voting __________.
___________________________ ___________________________
Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor
CERTIFICATE OF CLERK OF COUNCIL
I, the undersigned Clerk of Council of Columbus, Georgia, keeper of the
records and the seal thereof, hereby certify that the foregoing is a true and
correct copy of a resolution of the Council of Columbus, Georgia, adopted
January 26, 2010, a duplicate original of which resolution has been entered in
the official records of Columbus, Georgia, under my supervision and is in my
official possession, custody, and control.
I further certify that the meeting was held in conformity with the
requirements of Title 50, Chapter 14 of the Official Code of Georgia Annotated.
(S E A L) _______________________________
Clerk of Council
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