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HomeMy WebLinkAboutItem 04 Street Assets Unfunded Liability AGENDA ITEM SUMMARY Meeting Date: 7/2/2018 Meeting Type: Regular Meeting Staff Contact/Dept.: Tom Boyatt, DPW Interim Director Staff Phone No: 541-744-3373 Estimated Time: 10 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Maintain and Improve Infrastructure and Facilities ITEM TITLE: STREET ASSETS UNFUNDED LIABILITY ACTION REQUESTED: Adopt a Resolution referring Street Capital Bond to Springfield voters. ISSUE STATEMENT: The decline in the condition of the City’s street infrastructure continues to accelerate since 2007, when the City effectively discontinued its preservation program. Between 2013 and 2016 the unfunded backlog of preservation and reconstruction grew from $22 million to $30 million. Staff is currently completing an asset conditions inventory for 2018, which must be reported to the State prior to February 2019, and anticipates the unfunded liability is now $35million, and could be as high as $40 million. ATTACHMENTS: ATT1: Resolution Referring Bond Measure to Voters Exhibit A: Ballot Title Springfield Street Repair GO Bond, 2018 Exhibit B: Street Bond Priority Project List Exhibit C: Notice of Receipt of Ballot Title DISCUSSION/ FINANCIAL IMPACT: At the June 25, 2018 City Council work session staff received direction to prepare for Council consideration a Resolution referring a $10,000,000 general obligation bond to Springfield voters to fund a priority list of street repair projects. This Ballot Measure would be voted on in the November 6, 2018 General Election. The referral resolution is included here as Attachment 1. Exhibit A to the Resolution is the Ballot Title as proposed. The Ballot Title includes the ballot Caption not to exceed 10 words, the ballot Question not to exceed 20 words (excluding statutorily required language), and the ballot Summary not to exceed 175 words. The Ballot Title includes the top eight priority street repair projects to be paid for with the GO bond, as well as the estimated tax rate per $1,000 of assess value (AV) and what that annual cost increase in property taxes would be on the average home in Springfield. The Ballot Summary also references the Referral Resolution, which includes a longer list of priority projects should costs come in under estimate or the City encounter difficulty beyond funds available in delivering a higher priority project. On the advice of bond counsel, the Ballot Title and Referral Resolution now state that bonds will be repaid from property taxes for a period not to exceed six years. While the intent is to levy the increase for five years only, the extra year is there because sometimes it takes longer to conclude a successful bond sale and the City desires to have the full five years to levy the increase and deliver the projects. If the ballot title says 5 years, the repayment period would effectively be only four to four and a half years, because the levy would not be able to go even one single day longer than five years. In July and early August staff will coordinate with County Elections to meet deadlines and prepare the explanatory statement for the voter’s pamphlet, and develop informational materials for the funding measure for State Elections review. CITY OF SPRINGFIELD, OREGON RESOLUTION NO. ___________ A RESOLUTION REFERRING TO THE VOTERS OF THE CITY A BALLOT MEASURE AUTHORIZING THE ISSUANCE OF A MAXIMUM OF $10,000,000 OF GENERAL OBLIGATION BONDS TO FUND PROJECTS TO FIX CITY STREETS. WHEREAS, ORS 287A.050 authorizes the City to issue general obligation bonds to finance capital costs upon approval by the electors of the City; WHEREAS, the City currently has no funded street repair and preservation program, there is an existing backlog of approximately $35 to $40 million in street repairs, and existing funding is inadequate to address this backlog; WHEREAS, fixing City streets through preservation and repair in the near future is less costly than street reconstruction later on; WHEREAS, the City Council has determined that the City will benefit from issuing general obligation bonds to finance projects to fix City streets and reduce the backlog of street repairs; WHEREAS, street projects funded by this bond measure would include slurry sealing, pavement overlays, restriping, crack sealing, reconstruction, related improvements, and other projects intended to extend the useable life of the roadway; WHEREAS, the City Council has determined that the streets listed in Exhibit B are the highest priority for repair and, based upon the City’s current cost estimates, the City anticipates constructing the first eight listed projects using bond proceeds; WHEREAS, no new streets would be constructed, or new City staff hired as a result of this bond measure; WHEREAS, if approved by the electors of the City, the City will annually prepare and publish a report showing projects completed using bond funds; WHEREAS, the City Council has determined to proceed with referring to the electors of the City a ballot measure to authorize the issuance of $10,000,000 in general obligation bonds for the purposes described above; WHEREAS, ORS 287A.050 limits the amount of general obligation bonds for street improvements and certain other types of general obligation bonds to three percent of the real market value of taxable property in the City, and issuing the bonds will not cause the City to exceed this limit; WHEREAS, the measure is expected to cost an average of $0.50 per $1000 of assessed value each year for not more than six years, and would cost the average Springfield homeowner approximately $79 per year; and WHEREAS, the City anticipates expending funds to begin fixing streets prior to issuance of the bonds, and therefore wishes to declare its official intent to reimburse itself from the bond proceeds for any funds spent on the streets described in this measure under Section 1.150-2 of the U.S. Treasury regulations, Attachment 1, Page 1 of 2 NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD: Section 1: The City Council hereby refers to the voters of the City of Springfield at the General Election on November 6, 2018 a measure authorizing the issuance of a maximum of $10,000,000 of general obligation bonds for the purpose of fixing city streets. Section 2: The City Council hereby adopts and certifies the Ballot Title for this measure as attached in Exhibit A. Section 3: If approved by the voters at the General Election on November 6, 2018, the proceeds from this bond measure will be used only to pay capital costs to fix City streets as described in Exhibit B to this resolution and to pay bond issuance costs. Section 4: If approved by the voters at the General Election on November 6, 2018, the City will prepare and publish periodic reports as street projects are completed to document the use of bond proceeds. Section 5: Pursuant to ORS 250.275(5) and 250.285, the City Recorder as the City Elections Officer shall publish in the next available edition of the Register Guard a notice of receipt of the ballot title including notice that an elector may file a petition for review of the ballot title pursuant to ORS 250.296 not later than the seventh business day after the title is filed with the City Elections Officer. The notice shall be in substantially the form attached to this resolution as Exhibit C. Section 6: The City Recorder, as the Chief Elections Officer of the City, is directed to submit to the County Clerk for Lane County, Oregon, a statement of the ballot measure, a certified copy of this Resolution and the Ballot Title, and all other necessary information so that this measure may appear on the ballot for the November 6, 2018 General Election. Section 7: The City Manager, the City Recorder, the City Finance Director, and the City Attorney, and each of them individually, are hereby authorized and directed to prepare and file an explanatory statement for this measure, and to take such other action as is necessary or appropriate to carry out the purposes and intent of this Resolution in compliance with the applicable provisions of law. Section 8: The City hereby declares its official intent to reimburse itself with bond proceeds for any amounts the City spends for the purpose of fixing City streets described in the measure. Section 9: This Resolution will take effect immediately upon adoption by the Council and approval by the Mayor. ADOPTED by the Common Council of the City of Springfield this ___ day of _________, ____, by a vote of _____ for and ____ against. _______________________ Mayor ATTEST: __________________________ City Recorder Attachment 1, Page 2 of 2 Exhibit A – Ballot Title Springfield Street Repair GO Bond, 2018 Caption (10 words) Authorizes general obligation bonds to fix Springfield streets. Question (20 words) Shall City of Springfield issue $10,000,000 in general obligation bonds to fix deteriorating city streets? If the bonds are approved, they will be payable from taxes on property or property ownership that are not subject to the limits of sections 11 and 11b, Article XI of the Oregon Constitution. Summary (175 words) If this measure is approved, City will use bond proceeds to fix Springfield streets. Bond proceeds will only be used to fix existing streets and pay bond issuance costs. The listed streets are the City’s highest priority for fixing with bond proceeds. See Springfield Resolution _____ for a full list of streets that could be fixed using bond proceeds. Olympic St – Mohawk Blvd to 28th St Centennial Blvd – Aspen St to Prescott Ln Commercial St – 42nd west 450 feet 42nd St – Main St to IP Entrance Thurston Road – 58th St to 69th St 14th St – Main St to A St and E St to G St Mohawk Blvd – G St to OR126 Highbanks Rd and 58th St – 52nd St to Thurston Rd The City will publish periodic reports to document completed bond projects. Bonds would be repaid from property taxes for a period not to exceed 6 years. The estimated rate is $0.50 per $1000 of assessed value, or about $79 per year for the average Springfield homeowner. Exhibit A, Page 1 of 1 Exhibit B – Street Bond Priority Project List • Olympic Street—Mohawk Blvd to 28th Street • Centennial Blvd—Aspen Street to Prescott Lane • Commercial Street—42nd Street west approximately 450 feet • 42nd Street—Main Street to approximately the entrance to International Paper • Thurston Road—58th Street to 69th Street • 14th Street—Main Street to A Street and E Street to G Street • Mohawk Blvd—G Street to Highway 126 • Highbanks Road and 58th Street—52nd Street to Thurston Road • Marcola Road—19th Street to the Springfield city limits • Gateway Street—International Way to the Springfield city limits • 32nd Street and Jasper Road—Railroad to 42nd Street Exhibit B, Page 1 of 1 EXHIBIT C NOTICE OF RECEIPT OF BALLOT TITLE Notice is hereby given that a ballot title for a measure referred by the City of Springfield has been filed with the City Elections Officer on [July __, 2018]. The ballot title caption is “Authorizes general obligation bonds to fix Springfield streets.” A copy of the ballot title is available from the City’s Elections Officer. An elector may file a petition for review of this ballot title in the Lane County Circuit Court no later than 5:00 p.m., [insert date that is 7 business days after the ballot title is filed with the City Elections Officer] under ORS 250.296. ___________________________________________ ________________ Signature of City Elections Officer Date signed __________________________________________ __________________ Printed name of City Elections Officer Title This legal notice is to be published by the City Elections Officer in the Register Guard, or in another newspaper of general distribution within the City. Exhibit C, Page 1 of 1