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RESOLUTION R-1415-91: A RESOLUTION OF THE CITY OF NORMAN, OKLAHOMA (THE "CITY") APPROVING THE INCURRENCE OF INDEBTEDNESS BY THE NORMAN MUNICIPAL AUTHORITY (THE "AUTHORITY") ISSUING ITS SALES TAX REVENUE NOTE, SERIES 2015 (THE "NOTE"); PROVIDING THAT THE ORGANIZATIONAL DOCUMENT CREATING THE AUTHORITY IS SUBJECT TO THE PROVISIONS OF THE NOTE INDENTURE; AUTHORIZING THE ISSUANCE OF SAID NOTE; WAIVING COMPETITIVE BIDDING WITH RESPECT TO THE SALE OF SAID NOTE AND APPROVING THE PROCEEDINGS OF THE AUTHORITY PERTAINING TO THE SALE OF SAID NOTE; APPROVING AND AUTHORIZING THE EXECUTION OF A SALES TAX AGREEMENT BY AND BETWEEN THE CITY AND THE AUTHORITY PERTAINING TO THE YEAR-TO-YEAR PLEDGE OF CERTAIN SALES TAX REVENUES; AND CONTAINING OTHER PROVISIONS RELATING THERETO.
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BACKGROUND: On April 1, 2014, the voters of Norman approved Ordinance O-1314-33, extending the dedicated ½% Public Safety Sales Tax (PSST) permanently, effective October 1, 2015. The Ordinance directed that funding for the 71 personnel added to the City public safety workforce by the PSST be made permanent; 19 personnel be added over a period of four years (13 police officers to staff a School Resource Officer program; 4 additional Dispatchers; and 2 Emergency Vehicle Mechanics); and a program to replace or acquire Critical Public Safety Capital Facility Needs be implemented. The Critical Public Safety Capital Needs were identified, in priority order, as follows:
Emergency Communication System Replacement - $15,000,000
Emergency Operations/Dispatch Center Facility - $6,500,000
Fire Apparatus Replacement Program - $6,800,000
Reconstruct/Relocate Fire Station #5 - $3,500,000
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TOTAL - $31,800,000
In discussions and presentations leading up to the approval of the PSST extension, the plan to finance the Emergency Communications (Radio) System and Emergency Operations Center (EOC) facilities through some sort of debt issuance was discussed and acknowledged, due to the need to have those facilities up and running before sufficient PSST revenues would accrue. Under this plan, available PSST Fund balance would be used as a partial "down payment" on the Communication System and EOC facilities, and PSST Fund balance would be used to pay for the Fire Apparatus and Fire Station 5 Reconstruction on a pay-as-you-go basis, as funds became available after the Radio System and EOC were financed.
DISCUSSION: Subsequent to the passage of the PSST extension ("PSST II"), Fire Department staff presented to the City Manager and Council Finance Committee the immediate need to replace the most critical of the fire apparatus, a Platform Fire Truck with an estimated cost of $1,100,000. Police Department staff also presented the need to hire the School Resource Officer personnel a year in advance of the time originally projected. The PSST Fund should be able to absorb these advanced expenses, but the amount of debt financing that will be required will be increased (as the "down payment" from PSST Fund balance will be reduced).
Finance Department and Legal Department staff, in consultation with the City's financial advisor and bond counsel teams, have proposed a financing package, including financing for the Emergency Communications System, the EOC/Dispatch Facility and the Fire Platform Truck. This comprehensive financing package for the Critical Public Safety Capital Needs was discussed and approved by the Council Finance Committee at the February 12, 2015 meeting.
Proposals from qualified local and regional banking institutions to provide approximately $22,825,000 in financing, secured (only) by a pledge of the PSST II proceeds, were solicited. The proposed final maturity on the Notes is 12 years. Responses in the form of interest rate proposals will be received on March 10, 2015, and the lowest and best interest rate bid will be forwarded for consideration of the NMA Trustees and Council. Information on the tabulated interest rate bid proposals will be distributed at the meeting, as an attachment to this memorandum. Assuming successful responses are received, the Norman Municipal Authority (NMA) Trustees and Council will consider two resolutions. Several actions are accomplished by the Resolutions, if approved. Resolution R-1415-90 is generally a Resolution of the NMA to issue the debt, and R-1415-91 is a Resolution of the City of Norman authorizing the issuance of the debt by the NMA in an aggregate amount not to exceed $22,825,000.
The NMA Resolution (R-1415-90) would authorize the following actions:
Authorize the Issuance of the PSST Revenue Notes;
Pledge the Revenues of the PSST II sales tax, subject to annual appropriation, to the repayment of the Note indebtedness;
Waive Competitive Bidding and Authorize the Note to be Sold on a Negotiated Basis;
Authorize a Sales Tax Agreement between the City of Norman and the NMA;
Establish the Tax-Exempt Nature of the Note; and
Authorize the Chair of the NMA Board of Trustees to execute final documents related to the financing
The City of Norman Resolution (R-1415-91) would authorize the following actions:
Approve the Incurrence of the Indebtedness by the NMA;
Waive Competitive Bidding and Authorize the Note to be Sold on a Negotiated Basis;
Authorize a Sales Tax Agreement between the City of Norman and the NMA;
Establish the Tax-Exempt Nature of the Note; and
Authorize the Mayor to execute final documents related to the financing.
Upon the favorable consideration of these Resolutions by the Council and NMA Trustees, staff will then proceed with the closing of the financing as executed by the Chairperson/Mayor.
RECOMMENDATION: It is recommended that the Resolutions be adopted.