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HomeMy WebLinkAbout09-63FEBRUARY 24, 2009 09 -63 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: AUTHORIZE BORROWING FROM STATE LAND TRUST / NORTHWEST INDUSTRIAL PARK LAND PURCHASE, CONVENTION CENTRE FURNITURE & EQUIPMENT, AND PARKING RAMP REPAIRS INITIATED BY: CITY ADMINISTRATION WHEREAS, by the provisions of sec. 24.66 of the Wisconsin Statutes, all municipalities may borrow money for such purposes in the manner prescribed; and, WHEREAS, by the provisions of Chapter 24 of the Wisconsin Statutes, the Board of Commissioners of Public Lands of Wisconsin is authorized to make loans from the State Trust Funds to municipalities for such purposes. (Municipality as defined by Sec. 24.60(2), Wisconsin Statutes, means a town, village, city, county, public inland lake protection and rehabilitation district, town sanitary district created under sec. 60.71 or 60.72, metropolitan sewerage district created under sec. 200.05 or 200.23, joint sewerage system created under sec. 281.43 (4), school district or technical college district.) NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Oshkosh that the City of Oshkosh, in the County of Winnebago, Wisconsin, is authorized to borrow from the Trust Funds of the State of Wisconsin, a sum of up to One Million Four Hundred Fifty -One Thousand Dollars ($1,451,000) for the purpose of: purchasing land that will become part of the City's Northwest Industrial Park, purchasing Convention Centre Furniture & Equipment, completing Parking Ramp Repairs, and for no other purposes. The loan is to be payable within 10 years from the 15th day of March preceding the date the loan is made. The loan will be repaid in annual installments with interest at the rate of 4.5 percent per annum from the date of making the loan to the 15th day of March next and thereafter annually as provided by law. BE IT FURTHER RESOLVED, that there shall be raised and there is levied upon all taxable property, within the City of Oshkosh, in the County of Winnebago, Wisconsin, a direct annual tax for the purpose of paying interest and principal on the loan as they become due. BE IT FURTHER RESOLVED, that no money obtained by the City of Oshkosh by such loan from the state be applied or paid out for any purpose except for the purpose of purchasing land that will become part of the City's Southwest Industrial Park, purchasing Convention Centre Furniture & Equipment, and completing Parking Ramp Repairswithout the consent of the Board of Commissioners of Public Lands. FEBRUARY 24, 2009 09 -63 RESOLUTION CONT'D BE IT FURTHER RESOLVED, that in case the Board of Commissioners of Public Lands agrees to make the loan, that the City Manager and Clerk of the City of Oshkosh in the County of Winnebago, Wisconsin, are authorized and empowered, in the name of the City to execute and deliver to the Commission, certificates of indebtedness, in such form as required by the Commission, for any sum of money that may be loaned to the City pursuant to this resolution. The City Manager and Clerk of the City will perform all necessary actions to fully carry out the provisions of Chapter 24 Wisconsin Statutes, and these resolutions. BE IT FURTHER RESOLVED, that this preamble and these resolutions and the "aye" and "no" vote by which they were adopted, be recorded, and that the Clerk of this City forward this certified record, along with the application for the loan, to the Board of Commissioners of Public Lands of Wisconsin. City of Oshkosh Finance Department 215 Church Ave., PO Box 1130 Oshkosh, WI 54903 -1130 O.IHKQ H (920) 236 -5080 (920) 236 -5039 FAX ON THE WATER MEMORANDUM TO: Honorable Mayor and Members of the Common Council FROM: Peggy Steeno, Finance Director DATE: February 18, 2009 RE: Authorize Borrowing from the State Land Trust / Northwest Industrial Land Purchase, Convention Centre Furniture & Equipment, and Parking Ramp Repairs BACKGROUND The City participates in two types of borrowings, tax- exempt, which covers the majority of approved capital projects since the projects are completed for the benefit of the public, and taxable, which covers those items that are not defined as tax - exempt by the law. Projects that are not tax - exempt are those that are not solely for the use of the general public. In the event that the City needs to borrow on a taxable basis, the best resource for this, depending on the size of the issue and the availability of funds, is the State Land Trust. The State Land Trust provides loans to municipalities and school districts at reasonable rates, without the added issuance costs included in a traditional `market' borrowing. ANALYSIS Below is the list of projects that make up the $1,451,000 borrowing being proposed through the State Land Trust Fund along with the specific reasons that the borrowings are taxable: • Northwest Industrial Land Purchase ($1,255,000) — Since this land is to be purchased in order to improve and sell to private parties, it is not considered tax- exempt. • Convention Centre Furniture & Equipment ($100,000) - As was the case with the borrowing for the renovation of the Convention Centre, since the Centre will be operated by a private party, rather than the City, it also cannot be considered tax exempt. • Parking Ramp Repairs ($96,000) — Since this is a lot operated by a private party, along with the fact that the rights to the lot are being turned over to a private party, this, also, cannot be considered tax- exempt. While the Northwest Industrial Land Purchase is currently being considered by the Council, the second and third items listed above were approved as part of the Capital Improvement Plan on November 25, 2008. Considering current market conditions, the 4.5% interest rate for a ten year term is very favorable for a taxable borrowing. And, by working through the State Land Trust to obtain the funds necessary for the above projects, the City will not incur any issuance costs for this debt. In addition, the process is streamlined in comparison to a traditional borrowing, taxable or tax- exempt. FISCAL IMPACT By authorizing this transaction, the City is undertaking new debt. This debt will be repaid over ten years with an annual payment of approximately $183,400 per year, with the first payment commencing on March 15, 2010. RECOMMENDATION Staff recommends that Council adopt this resolution. R espectfully Submitted, g Finance Director Approved: Mark Rohloff City Manager