The Pella City Council approved a resolution during last week’s regular meeting in regards to General Obligation Local Option Sales and Services Tax Bonds, Series 2014.
This resolution directs the advertisement for sale and approves electronic bidding procedures and the official statement for the $3,200,000 (dollar amount subject to change) General Obligation Local Option Sales and Services Tax Bonds, Series 2014. The proceeds from the Bonds will be used to fund the renovation of the Indoor Pool project which is scheduled to occur from April through November of this year. Overall, the estimated cost for the Indoor Pool renovation is $4.0 million, which includes the roof replacement in 2011.
In considering this potential bond issue, it is also important to note in March of 2011, the community passed a referendum extending the City’s local option sales and services tax for twelve years. The approval rate for the extension was nearly 85 percent, and the Indoor Pool renovation was listed as an eligible item for local option sales and services expenditures. The City, in conjunction with our Financial Advisor, Public Financial Management, Inc., has prepared a preliminary Official Statement outlining the details of the proposed sale of the Bonds. Subject to revisions from bond counsel, Ahlers & Cooney, and Public Financial Management, Inc., this Official Statement will be distributed in connection with the offering of the Bonds for sale. The bid date for the Bonds is scheduled for March 4, 2014. The terms of the sale include language to permit the use of electronic bidding. Per Iowa Code, Council needs to approve that the recommended procedure for bidding will provide reasonable security and maintain the integrity of the competitive bidding process and facilitate the delivery of bids by interested parties. It should be noted, while the bond issue limit is listed as not to exceed $4.0 million, the proposed General Obligation Local Option Sales and Services Tax Bonds will be for $3.2 million with a ten year term. It is important to note, the annual debt service payments for the bond are proposed to be provided by local option sales and services taxes. As a result, staff does not believe there will be any impact to the City’s property tax rate as a result of this bond issue. However, because the proposed bond is a general obligation bond, the City Council could issue a debt service levy for the debt service payments if they desire to in the future.