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8.4 Agr Bid Library T-Notes City Of Salina Request for Commission Action Date Time 5/19/97 4:00 PM AGENDA SECTION: ORIGINATING DEPARTMENT APPROVED NO. FOR AGENDA 8 FINANCE ITEM NO, BY: Rodney Franz By:~'I/~' ITEM: Resolution Authorizing the Finance director and city clerk to obtain bids for Temporary Notes to finance Improvements to the Salina Public Library. BACKGROUND: The Public Library is currently engaged in an expansion and rehabilitation of their facilities. The roots of this project extend to 1992. I have enclosed a "Project History" that was done in mid-1995 on this project. Since that time, the City and Library have entered into an interlocal agreement providing for financing in an amount up to $750,000 and for the repayment of that amount from Library resources. A copy of that agreement and the "Request for Commission Action" that accompanied it are also enclosed. Current estimates project that the Library will need about $310,000 in early to mid-June in order to finish the project. They wish to pay that back over a three year period. The temporary notes that we will be taking bids on will be structured to mature over the 3 year period, with $110,000 due in 1998 and $100,000 due in 1999 and 2000. The resolution enclosed simply authorizes the staff to proceed with the process of advertising for and collecting bids. Bids will be opened on June 2 with an anticipated closing date of June 17. , REQUESTED ACTION: Adopt Resolution Number 97-5158 COMMISSION ACTION MOTION BY: SECOND BY: THAT: Library Renovation Project Item Project Cost: Construction Contract with Harbin Architectural Fees Furnishings Original Contingency Remaining Additional contingency Total Costs Amount $ 1,563,940.00 $ 155,207.00 $ 160,585.00 $ 2O,OOO.OO $ 20,000.00 $ 1,919,732.00 Paid to Date (2/3/97) Construction Architect Furnishings Total Paid to Date $ 688,401.00 $ 131,232.00 $ - $ 819,633.00 Balance Leffto Spend Cash on Hand Financing Needed Issuance Costs and rounding Total to be Financed $ 1,100,099.00 $ 796,604.00 $ 303,495.00 $ 6,5O5.OO $ 310,000.00 Principal Amount Due in 1998 Principal Amount Due in 1999 Principal Amount due in 2000 $ 110,000.00 $ 100,000.00 $ 100,000.00 Annual Interest Amounts will be in addition to the principal amounts and will vary depending on the interest rate on the issue. Library renovation City Of Salina Request for Commission Action Date Time AGENDA SECTION: ORIGINATING DEPARTMENT APPROVED NO. 8 FOR AGENDA ITEM NO, BY: Rodney Franz B~.,.. , .. L'~ ITEM: Resolution 96-5055. A Resolution Stating the intent of the City to issue Obligations of the City to finance the reconstruction, remodeling, furnishing and equipping of the existing Salina Public Library, and approving an interlocal agreement with respect to such project and financing. BACKGROUND: The Salina Public Library has requested that the City of Salina use it's ability to issue debt to help finance the improvements scheduled at the Library. The improvements convert basement space to effective use, and re-organize first floor space to better use of the facility. It is the intent of the Library Board to pay to the City an annual amount sufficient to retire the debt over the term of the issue. The City is authorized to issue debt for these purposes under K.S.A. 12-1736 et seq. The bids for the work have been opened with Harbin construction being the lowest and ;best bid. The amount for construction of the project is $1,460,000. In addition, the library is anticipating expending approximately $200~000 for furnishings, and there is an allowance of $100,000 for contingencies on the construction contract. The total project will cost $1,760,000 for construction and improvements. A 5% allowance for overhead !and issuance costs results in a total project estimate of $1,848,000. The project is I scheduled to take from 12 to 14 months to complete. The Library Board is scheduled to approve the contract with Harbin on August 13, 1996. The Library does have some resources accumulated towards this project. They have on hand about $900,000; and are expecting to receive an additional $200,000 in 1996, providing a total of $1,100,000 cash they can contribute to the project. $300,000 more is in the process of being levied for 1997, however, this may not be available in a timely manner due to the times and uncertainties in the distribution of taxes. It could however. be used to pay down a part of the note. The amount of additional financing thus required is on the order of $750,000. In order to consummate this transaction, the City of Salina and the Salina Public Library will need to enter into an intertocal agreement setting out the terms as described above, and other administrative provisions. A proposed agreement, drafted by City Attorney Gregg Bengtson is attached. The Agreement has also been approved by the Kansas Attorney Generals Office. The City of Salina will also have to declare the City of Salina's intent to issue debt in this amount for this project, and provides the authorization to do so at such time as the funds are required. This action will permit the Library to enter into the contract and still comply with cash basis requirements. Our intent is to permit the Library to expend their committed resources first, and actually issue temporary notes or bonds at such time and in such amounts as may be needed. This approach has several advantages: 1. It will permit more closely matching the amount of the temporary note issue to the project requirements, should additional costs be incurred. 2. It may allow for the Library to apply at least part .of the 1997 receipts to the ~roject, thus reducing the amount of notes needed to be issued, and 3. It delays issuance of the debt thereby reducing the amount of interest costs incurred. RECOMENDATION: 1. Approve Resolution Number 96-5055, which declares our intent to issue the debt, and approves entering into the interlocal agreement. COMMISSION ACTION MOTION BY: SECOND BY: THAT: INTERLOCAL AGREEMENT THIS INTERLOCAL AGREEMENT is entered into pursuant to the Kansas Interlocal Cooperation Act this __ day of August, 1996, between the CITY OF SALINA, KANSAS, ("the City"), and the BOARD OF DIRECTORS OF THE SALINA PUBLIC LIBRARY, ("the Library Board"). Recitals A. Pursuant to K.S.A. 12-1736 and 1737, the City is authorized to "alter, repair, reconstruct, remodel, replace or make additions to, furnish and equip a public building" jointly or in cooperation with any other governmental unit so empowered and to issue general obligation bonds of the City for such purpose. B. Pursuant to K.S.A. 12-1215 et seq., the Library Board is empowered to maintain the Salina Public Library building, including major capital improvements. C. The Salina Public Library building is in need of major capital improvements. D. The total estimated cost of the proposed capital improvement project (the "Project") is $1,848,000. The Library Board has on hand approximately $900,000 (the "Funds on Hand") to be applied toward the cost of the Project. The Library Board also expects to receive an additional $200,000 in 1996 (the "1996 Revenues") and $300,00 in 1997 (the "1997 Revenues") in property tax revenues to be applied toward the Project. E. It is the desire of the City and the Library Board to enter into this Iaterlocal Agreement to provide for the financing of a portion of the Project through the issuance of general obligation bonds of the City. THE PARTIES agree as follows: 1. Duration. This Interlocal Agreement shall be effective upon its approval and filing in accordance with the Kansas Inteflocal Cooperation Act and shall remain in effect until all bonds issued pursuant to the terms of this Interlocal Agreement are paid in full. 2. No Separate Entity. The public purpose to be served through this Interlocal Agreement does not require the creation of a separate legal or administrative entity. 3. Public Purpose. This Interlocal Agreement is for the purpose of providing a means of financing a portion of the cost of the Project through the issuance of general obligation bonds of the City. 4. Financing the Cooperative Undertaking. The Library Board agrees that it will apply the Funds on Hand, the 1996 Revenues, and the 1997 Revenues toward the cost of the Project. The City agrees to issue general obligation bonds or temporary notes of the City in an amount not to exceed $750,000, and to make the temporary note and/or bond proceeds available to the Library Board to be applied toward the balance of the cost of the Project. The Library Board agrees that any funds remaining from the proceeds after payment of the cost of the Pro.iect (including any of the 1997 Revenues) which are not needed to make the first debt payment shall be applied to reduce the amount o£ long-term debt issued by tile Cit.,,, pursuant to this Interlocal Agreement. 5. Payment of Bonds. The bonds issued by the City under this Agreement shall mature in substantially equal principal amounts annually over a period of no more than ten years. The principal and interest payments due for the bonds issued by the City under this Agreement shall be paid by the Library Board's remittance to the City of the principal, if any, and interest due not less than ten (10) days prior to the respective payment dates for such principal, if any, and interest. The Library Board shall also remit to the City the amount of any direct expenses of the City in conjunction with the bonds. The Library Board's obligation to make such remittances shall be an annual obligation of tile Library Board and shall be payable solely from funds budgeted and appropriated for that purpose during tile Library Board's then current budget year. 6. Termination. Due to the single purpose of the cooperative undertaking and tile intended issuance of general obligation bonds of tile City under this Interlocal Agreement, provision for a method for tile partial or complete termination of this Interlocal Agreement and for disposing of property upon such partial or complete termination is inappropriate. 7. Contract for Improven~ents. The Library Board agrees that it shall enter into an and administer the contract necessary to carry out the completion of the Prqject and to apply the proceeds from the temporary notes and/or bonds of the Cit_,,, to be issued tinder this Interlocal Agreement toxvard tile payment of such contract. 8. ,q. dministration. The_joint undertaking provided roi- under this Interlocal Agreement shall be administered cooperatively by the City Manager on behalf of the City and tile Director on behalf of tile Library Board. 9. Real and Personal Property. Due to the nature of tile joint undertaking, it will not be necessary to acquire, hold, or dispose of any real or personal property in carrying out tile purpose of this Interlocal Agreement. 10. Bindin~ gl't~ct. This Agreement shall be binding upon anct inure to tile benefit of' tile parties and their successors. IN \\;ITNESS \VHEREOF, tile Governing Body o/'ttle City has b5' adoption of Resolution No 96- ()iq August 12, 1996, approved and authorized tile Mayor to execute this Interlocal Agreement: and the Library Board has upon appropriate motion adopted and recorded -2- in the minutes of its meeting of August 13, 1996, approved and authorized its President to execute this lnterlocal Agreement; to be effective.upon approval of the Attorney General of the State of Kansas the day and year fa-st above written and upon filing with the Register of Deeds of Saline County, Kansas, and with the Kansas Secretary of State. CITY OF SALINA, KANSAS ATTEST: By: Evelyn Maxwell, Mayor Judy D. Long, City Clerk BOARD OF DIRECTORS OF THE SALINA PUBLIC LIBKARY ATTEST: By: James E. Sullivan, President Janet Wilbur, Secretary Approved this ~ day of State of Kansas. ,1996, by the Attorney General of the KANSAS ATTORNEY GENERAL By: Mary Feighny, Assistant Attorney General -3- RESOLUTION NO. 96- 5 0 5 5 A RESOLUTION STATING THE INTENT OF THE CITY OF SAIJNA, KANSAS TO ISSUE OBLIGATIONS OF TIlE CITY TO FINANCE ~ RECONSTRUCTION, REMODELING, FURNISTIING AND EQUIPPING OF TH~ EX/STING SALINA PUBLIC LIBRARY, AND APPROVING AN INTERLOCAL AGREEMENT W1TH RF_SPECT TO SUCH PROJECT AND FINANCING. Wlq-E.~, the Salina Public Library (the "Library") desires to alter, repair, reconstruct, remodel, replace or make additions to, furnish and equip its existing library facility (the "Project") at an estimated costs of approximately $1,848,000, a portion of which cost will be paid by the Library from fimds on hand or to be received during the work on the Project; and ~, the City of Salina, Kansas (the 'City") has agreed to assist the Library in the Project by providing financing for that portion of the Project which the Library will be unable to pay for with funds on hand or to be received during the work on the Project; and WtlERF_.AS, the City is authorized to issue its obligations to finance the Project under the authority of K.S.A. 12-1736 ~ seq. ~EFORE, BE IT RF~OL~ BY Tlq2E GOVERNING BODY OF TII2E CITY OF SALINA, KANSAS: SECTION 1. It is hereby deemed and declared to be necess~, and in the public interest for the City to issue its obligations in the form of general obligation bonds (and, if necessary, pending issuance of the bonds, its temporary notes) under the authority of K.S.A. 12-1736 et s~.. to finance a portion of the cost of the Project in the amount of approximately $750,000. SECTION 2. The City expects to incur capital expenditures on and after the date of adoption of this Resolution (the "Expenditures") in connection with the Project, and intends to reimburse itself for such Expenditures with the proceeds of such obligations of the City in the estimated maximum principal amount of $750,000. SECTION 3. The proposed Interlocal Agreement between the City and the Board of Directors of the Salina Public Library (the "Agreement") with respect to the Project and the financing thereof is hereby approved in substantially the form presented to the governing body on the date hereof. The Mayor is hereby authorized to execute the Agreement for and on behalf of the City. SECTION 4. This Resolution shall be in full force and effect from and after its adoption by the governing body of the City. ADOPTED by the governing body of the City of Salina, K~sas, on August 12, 1996. (S~) ATTEST: Mayor City Clerk PROJECT HISTORY Once the need became evident, the Board, in 1992, appointed a committee of Board, staff and public, who were library users and members of the Friends of the Library. An architect was hired to help work through the early planning phases and to give cost estimates. The firm of Jones-Gillam, Inc. of Salina was hired. The committee met monthly for a year. The Salina Journal ran a front page story in July, 1992, and the committee obtained ideas from the public, Board, and staff through a short survey form. The priorities were discussed and set. PRIORITIES 1 Increased space for Children's services and collections 2. Multi-purpose Room for Pre-school Storytime, programs and meetings 3. Creation of quiet study spaces and a machine room for. copiers and microfilm readers 4. Improved access for the disabled 5. Use of existing space(including lower level) first and to best advantage The committee reviewed several options, all of which involved adding on to the Children's Library and using the basement for some public services. The cost estimates were in excess of 3 million dollars, so the Board directed the committee to find a more economical plan. The Committee completed their work in late 1993. The final cost estimate came in at $1.86 million. A timetable of 1996-97 was proposed for consideration. In December, the Board hired Jones- Giilam, Inc. to work with the Staff to develop schematic plans to display to the public. The plans were completed in the fall of 1994. The plans have been on public display for 7 months now and the response has been positive. In October,The Library Director, Joe McKenzie, met with the City Manager, Dennis Kissinger, City Finandal Director, Bob Biles, and City Planner, Roy Dudark to discuss the plans, funding options and City Capital Improvement Projects. This led to a meeting with the City Commission in November of 1994, during a study session. The purpose of this meeting was to increase the City Commission's awareness of the details of the project and to let them know that a possible proposal for an interlocal agreement to complete funding for the project could be coming in 1995.