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8.3 Airport Authority GO BondsCITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 07/16/2007 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: APPROVED FOR NO: 8 AGENDA: CITY ATTORNEY ITEM NO. 3 BY: BY: Greg Bengtson Page 1 ITEM: Ordinance No. 07-10398 Unconditionally Approving the Issuance of General Obligations Bonds by the Salina Airport Authority for the Purpose of Financing the Cost of Certain Capital Improvements Located at the Salina Airport Industrial Center and the Salina Municipal Airport. BACKGROUND: The Salina Airport Authority (the “Authority”) was established in 1965 by the City of Salina pursuant to Kansas enabling legislation enacted that same year. The statute authorizes the Authority to issue its own general obligation bonds. The statute also provides that: “If the Authority desires to issue its general obligation bonds, the board of directors shall adopt a re solution setting forth the principal amounts of bonds proposed to be issued and the purpose for which the bonds are to be issued, and shall forward a copy of such reso lution to the mayor of the city. The mayor shall present such resolution to the governing body of the city for its approval or disapproval.” The governing body then has three choices: (1) To disapprove the Authority’s resolution by ordinance; (2) To unconditionally approve the Aut hority’s resolution by ordinance; or (3) To approve the Authority’s reso lution and to publish a notice of the Authority’s intent to issue its general obligation bonds, subjecting the bond issue to a referendum election if a protest petition is signed by not less than 20% of the qualified electors of the city and filed within 15 days of the published notice. On July 11, 2007, the Board of Directors of the Authority adopted a resolution approving the issuance of not to exceed $9,765,000 (exclusive of costs of issuance and any temporar y financing costs) of general obligation bonds of the Authority to pay the cost of certain capital improvements located at the Salina Airport and Industrial Center, including, but not limited to, the acquisition, construction, improvement, furnishing and equipping of a new ha ngar to be known as Hangar 600 and various storage hangars, improvement of the Airport’s north ramp ar ea including building acquisition, renovation of Hangars 506-1 and 506-2, improvements to the Airport’s fuelin g facilities and area, HVAC improvements to various buildings, acquisition of equipment, improvements to Airport perimeter road, engineering for main taxiway reconstruction a nd a study of the Airpor t and Industrial Center drainage system (the “Project”). The total cost of the Project is estimat ed to be $10,608,600, with approximately $843,600 of the cost being provided by grants from the Federal Aviation Administration. Attached are copies of Salina Airport Authority Resolution No. 07-03, a summary of components of the Project, and the proposed Ordinance unconditionally approving the propos ed issuance of the Authority’s general obligation bond issue. The Project will be initially fu nded through the issuance of general obligation temporary notes and represents a significant step in the Authority’s planned development of the SLN Aviation Service Center. The Project is also anticipated by and repres ents a key component of the New Salina Economic Development Strategic Plan, recently endorsed by the governing body. CITY OF SALINA REQUEST FOR CITY COMMISSION ACTION DATE TIME 07/16/2007 4:00 P.M. AGENDA SECTION ORIGINATING DEPARTMENT: APPROVED FOR NO: 8 AGENDA: CITY ATTORNEY ITEM NO. 3 BY: BY: Greg Bengtson Page 2 The Project and the proposed financing have been developed and structured with the assistance of the Authority’s public finance advisors, George K. Baum & Company. The law firm of Gilmore & Bell will serve as bond counsel. FISCAL NOTE: While the proposed general obligation financing is backed by the full faith and credit of the Salina Airport Authority, K.S.A. 27-323(a) specifically pr ovides that “such general obligation bonds of the authority shall not constitute a debt or obligation of the city which established and created the authority.” Senate Bill No. 33 passed by the 2007 Kansas Legis lature expanded the limit on the Authority’s general obligation bonding capacity from 3% to 10% of the assess ed valuation of all the taxable tangible property within the City for the prior year. Also attached is a summary of the calculation of that limitation in relation to the proposed general obligation bond issue. CONFORMANCE WITH THE STRATEGIC PLAN: The Project and the proposed general obligation bond issue by the Authority are consistent with the subparagraph (j) of the City of Salina’s Shared Vision Statement: “(j) Salina will encourage and be su pportive of industrial development, economic expansion, market-driven tax base growth, and home grown entrepreneurialism” and the follow Strategic Goal under the City’s Strategic Plan: “Goal: The City will create a community of mixed-use, quality development and redevelopment.” COMMISSION ACTION: Approve Ordinance No. 07-10398 on first reading unconditionally approving the Authority’s Resolution No. 07-03. Salina Airport Authority 2007-A Taxable GO Temp Notes Airport/Airport Industrial Center Improvement Projects Revised 7-9-07 Estimated Project Development Sub-totals Hangar 600 - Architectural175,000$ Hangar 600 - Construction3,885,000 Hangar 600 - Civil Engineering89,962 Hangar 600- Site Preparation Construction (Civil)603,750 Hangar 600 - Construction Observation20,000 Hangar 600 - Fencing20,000 Hangar 509/600 Parking Lot - Civil Engineering25,000 Hangar 509/600 - Parking Lot - Construction173,000 Total Hangar 600 Development $ 4,991,712 Airport Storage Hangar Development2,700,000 $ 2,700,000 Aviation Service Center and North Ramp Development50,000 Building acquisition for north ramp redevelopment (Byquist buildings, 4 structures totaling 53,390 sq. ft.)890,000 Total Future Hangar Development $940,000 Total SLN Aviation Service Center Development $8,631,712 Aircraft fueling and pumphouse apron mill and and overlay 250,000250,000$ AIP 26, 27 & 28 - Matching Funds 150,000 150,000$ Hangar 506-1 and 506-2 - Architectural22,000 Hangar 506-1 and 506-2 - Remodel Construction140,000 Total Hangar 506-1 and 506-2 $162,000 Airport Self-fueling system75,000 75,000$ Bldg. No. 122 HVAC35,000 Bldg. No. 412 HVAC25,000 Bldg. No. 939 HVAC8,000 Total HVAC Improvements $68,000 Airport Drainage Study40,000 40,000$ Estimated total project development costs $ 9,376,7129,376,712$ stimated Bond Issue Costs$187,534 E Total estimated project development costs including bond issue costs $9,564,246 Total 2007-A Taxable GO Temporary Notes9,565,000$ Cell:A9 Comment:40,000 sq. ft. - Hangar 26,574 sq. ft. - Office 66,574 sq. ft. - Total @$55 = $3,661,570 Plus 5% contingency Cell:A11 Comment:shelli: estimate per Steve Harris 7-6-07 575,000 + .05% contingency Cell:A18 Comment:55,000 sq. ft. (35 units) Phase 1 for new construction $1,950,000 and Box hangar development $750,000 Cell:A21 Comment:shelli: purchase price of 885,000 + 5,000 closing costs (Published in The Salina Journal on July______, 2007) ORDINANCE NUMBER 07-10398 AN ORDINANCE UNCONDITIONALLY APPROVING THE ISSUANCE OF GENERAL OBLIGATION BONDS BY THE SALINA AIRPORT AUTHORITY FOR THE PURPOSE OF FINANCING THE COST OF CERTAIN CAPITAL IMPROVEMENTS LOCATED AT THE SALINA AIRPORT INDUSTRIAL CENTER AND THE SALINA MUNICIPAL AIRPORT. WHEREAS, on July 11, 2007, the Board of Directors of the Salina Airport Authority (the “Authority”) adopted a resolution approving the issuan ce of not to exceed $9,765,000 (exclusive of costs of issuance and any temporary financing costs) of general obligation bonds of the Authority to pay the cost of certain capital improvements located at the Sa lina Airport and Industrial Center, including, but not limited to, the acquisition, construction, improvement, furnishing and equipping of a new hangar to be known as Hangar 600 and various stor age hangars, improvement of the Airport’s north ramp area including building acquisition, renovation of Hangars 506-1 and 506-2, improvements to the Airport’s fueling facilities and area, HVAC improvements to various buildings, acquisition of equipment, improvements to Airport perimeter road, engineering for main taxiway reconstruction and a study of the Airport and Industrial Center drainage system (the “P roject”), as authorized by K.S.A. 27-315 to 27-326, inclusive; and WHEREAS, the total cost of the Project is estima ted to be $10,608,600, with approximately $843,600 of the cost being provided by grants from the Federal Aviation Administration; and WHEREAS , K.S.A., 27-323 provides that the Authority shall forward a copy of such resolution to the Mayor of the City, who shall present such r esolution of the governing body of the City for its approval or disapproval. SO NOW THEREFORE, BE IT ORDAINED BY THE GOVERNING BODY OF THE CITY OF SALINA, KANSAS AS FOLLOWS: Section 1. That the resolution of the Salina Airport Authority adopted on July 11, 2007, providing for the issuance of not to exceed $9,765,000 (exclusive of costs of issuance and any temporary financing costs) of general obligation bonds of the Authority for the purpose of financing the cost of the Project is hereby unconditionally approved. Section 2. That this ordinance shall be in full fo rce and effect from and after its adoption and publication once in the official city newspaper. Introduced: July 16, 2007 Passed: July23, 2007 _______________________________ [Seal] Alan E. Jilka, Mayor ATTEST: ______________________________ Lieu Ann Elsey, CMC, City Clerk éóïðóðé Íßß Ù»²»®¿´ Ѿ´·¹¿¬·±² Þ±²¼ ×­­«·²¹ Ý¿°¿½·¬ § Ю»°¿®»¼ éóïðóðé ½¬«¿´ ¿­ ±º éóïðóðé ß Ý·¬§ Ê¿´«¿¬·±² øîððê÷üíééôçïéôïèé øÍ¿´·²» ݱò Ý´»®µ÷ Ý·¬§ Ó±¬±® Ê»¸·½´» øîððê÷üëðôëëïôîçç øÍ¿´·²» ݱò Ý´»®µ÷ ̱¬¿´üìîèôìêèôìèê öïðû Ý¿°¿½·¬§üìîôèìêôèìç ïô î ó ÙÑ Þ±²¼ Þ¿´¿²½» ¿¬ éóïðóðé ïðôîçëôððð Ю±°±­»¼ îððé Ì»³° Ò±¬» ×­­«»çôëêëôððð λ³¿·²·²¹ Íßß ÙÑ Ý¿°¿½·¬üîîôçèêôèìç § ï ̸» Íßß ¿²¬·½·°¿¬»­ ½±²ª»®¬·²¹ üîÓ ±º ¬¸» ±«¬­¬¿²¼·²¹ îððê ÙÑ ¬»³° ²±¬»­ ¬± Ô»¿­»¸±´¼ ®»ª»²«» ¾±²¼­ ©·¬¸·² ¬¸» ²»¨¬ êóè ³±²¬¸­ò î Í»°¬ò îððé °®·²½·°¿´ °¿§³»²¬­ ©·´´ ®»¼«½» ±«¬­¬¿²¼·²¹ ÙÑ ¾±²¼ ¼»¾¬ ¾§ èèëôðððò п¹» ï