To: Martin L. Cousineau, Finance Committee Chairperson
From: Chrystal Simpson, Chief Financial Officer
title
RE: Approval to provide notice of intent to issue bonds for capital improvements and giving notice of intent to reimburse project expenditures with bond proceeds
recommendation
BOARD ACTION REQUESTED:
Approval to provide the notice of intent to issue bonds for capital improvements in the amount of $21,500,000 and giving notice of intent to reimburse project expenditures with bond proceeds
BACKGROUND:
Capital improvement planning has been a major focus for the County. Resolution 2023-206 approved a private placement borrowing of $9,000,000 as part of the Tower renovation project. There are additional capital needs included in the capital improvement plan adopted by the Board of Commissioners on September 13, 2023 that are urgent in nature. We would like to combine $7,500,000 of those improvements and $5,000,000 of Parks needed improvements with the $9,000,000 for the Tower to issue a bond in the amount of $21,500,000 as it is more economical to go through the bonding process once.
Attached is the list of projects we would like to include in the bonding and in the event that there are any savings from those projects, we would use the remaining bond proceeds for other projects included in the adopted capital improvement plan.
DISCUSSION:
Attached is a resolution authorizing publication of notice of intent to issue bonds in the not-to-exceed amount of $21,500,000 and declaring official intent to reimburse project expenditures with bond proceeds. The notice of intent to issue bonds is attached to the resolution. The publication of the notice starts a 45-day referendum period. Please note that only the notice gets published (not the entire resolution) and that the notice must take up at least 1/4 of the page in the newspaper in order to start the referendum period. If the notice does not cover at least 1/4 of the page, it will have to be republished in the required size before the 45-day period starts.
IMPACT ON HUMAN RESOURCES:
None.
IMPACT ON BUDGET:
The timing of issuance of the bonds will allow for interest only payments for the first two years. This will align the principal payments for General Fund to start when the JCI Energy bond is paid off in FYE 2026 which is a cost of approximately $820,000 each fiscal year. The new bond at the highest year of annual payments at the current estimated interest rate will increase the cost to General Fund by approximately $515,000.
The portion related to the $5,000,000 of parks capital improvements will be paid from Parks millage funds which would be approximately $445,000 for the highest principal and interest payment.
IMPACT ON FACILITIES:
The capital plan has put a major focus on consolidation of space and much needed improvements which will allow for facilities and operations to minimize the amount of time spent on fielding emergency repairs and shift to a routine maintenance plan to care for County property.
IMPACT ON TECHNOLOGY:
None.
CONFORMITY TO COUNTY PRIORITIES:
Long-term financial stability priority is met by consolidating space which result in costs savings from operations and allowing for minimization of emergency repairs which are much more costly than planned projects.
resolution
TO THE HONORABLE CHAIRPERSON AND MEMBERS OF THE GENESEE COUNTY BOARD OF COMMISSIONERS, GENESEE COUNTY, MICHIGAN
LADIES AND GENTLEMEN:
At a regular meeting of the Board of Commissioners of the County of Genesee, Michigan, held on the 9th day of October, 2024.
PRESENT:
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ABSENT:
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The following resolution was offered by _________________________ and seconded by _________________________:
WHEREAS, the County of Genesee (the “County”) proposes to issue its tax-exempt bonds in one or more series (collectively, the “Bonds”) for the purpose of defraying all or part of the cost of County capital improvements including, but not limited to, demolishing and renovating existing County facilities and structures; construction and repair of surrounding lands, including parking lots and landscaping; acquiring, constructing, installing, furnishing, and equipping improvements to County facilities and structures, including without limitation, the County Circuit Court, County Jail, County administrative building and offices, and parks and recreational facilities; and such other improvements that the County may determine to make as part of the County’s 2024-2032 Capital Improvement Plan (the “Project”); and
WHEREAS, it is anticipated that the County will advance all or a portion of the costs of the Project prior to the issuance of the Bonds, such advance to be repaid from proceeds of the Bonds upon the issuance thereof; and
WHEREAS, Section 1.150-2 of the Treasury Regulations on Income Tax (the “Reimbursement Regulations”) specifies conditions under which a reimbursement allocation may be treated as an expenditure of bond proceeds, and the County intends by this resolution to qualify amounts advanced by the County to the Project for reimbursement from proceeds of the Bonds in accordance with the requirements of the Reimbursement Regulations.
NOW, THEREFORE, BE IT RESOLVED, by this Board of Commissioners of the County of Genesee, Michigan, as follows:
1. The County hereby declares its official intent to issue its limited tax general obligation bonds in one or more series in the aggregate principal amount of not to exceed $21,500,000 to finance all or part of the costs of the Project. The County hereby declares that it reasonably expects to seek reimbursement for its advances to the Project as anticipated by this resolution.
2. The County Clerk is hereby instructed to publish the notice attached hereto once in a newspaper of general circulation in the County of Genesee, which notice shall not be less than ¼ page in size in such newspaper.
3. All resolutions and parts of resolutions insofar as they may be in conflict herewith are hereby rescinded.
YEAS:
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NAYS: ______________________________________________________________________
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RESOLUTION DECLARED ADOPTED.