HomeMy WebLinkAboutRes2007-098Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2007-098
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, EXPRESSING OFFICIAL INTENT TO ISSUE BONDS TO
FINANCE THE EXPANSION OF THE SPRING CREEK PRISON
FACILITIES AND DETERMINING RELATED MATTERS
WHEREAS, the State of Alaska has leased from the City the land described as Parcel A,
Spring Creek Correctional Project site, according to Plat No. 84-12 filed August 23, 1994; and Tract
E, Fourth of July Creek Tracts, according to Plat 84-6 filed May 1, 1984, Seward Marine Industrial
Center, Seward Recording District, Third Judicial District, State of Alaska (the "Site"); and
WHEREAS, the State, through the Department of Corrections, would like to continue using
the Site for a prison and to expand the existing facilities (which were constructed by the City and
financed through tax-exempt financing); and
WHEREAS, the City of Seward intends ~~ construct additional capital improvements on the
Site to expand the Spring Creek Correctional Center; and
WHEREAS, the City expects to finance a portion of the Project costs on a long-term basis
with proceeds of bonds (the "Bonds"); and
WHEREAS, the City reasonably expects that a portion of the Project costs will be paid by
the City prior to the issuance of the Bonds and proceeds of the Bonds will be used to reimburse the
City for the Project costs prior to the issuance of the Bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. This Resolution is adopted to satisfy the "official intent" requirements of Section
1.150-2 of the regulations adopted under the authority of the Internal Revenue Code of 1986, as
amended, (the "Code") with respect to the Project. For this purpose, Exhibit A includes a general
description of the Project and a statement of the maximum principal amount of bonds the City
reasonably expects to issue to finance costs of the Project (the "Bonds"). The City intends to use the
proceeds of the Bonds to make a loan (or to reimburse the City for making a loan) to finance costs of
the Project, and certain other costs, which are eligible under the Code for financing with proceeds of
tax-exempt bonds (the "Eligible Costs"). This Resolution is adopted on the date set forth below, and
the Eligible Costs incurred up to 60 days before that date will be eligible for reimbursement with
proceeds of the Bonds. As of the date set forth below, the City reasonably expects that it will issue
the Bonds and use the proceeds of the Bonds as described in this section.
Section 2. This resolution shall take effect immediately.
CITY OF SEWARD, ALASKA
RESOLUTION 2007-098
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 22nd day of
October, 2007.
THE CITY OF SEWARD, ALASKA
Clark Corbridge, Mayor
AYES: Dunham, Valdatta, Bardarson, Smith, Kellar, Corbridge
NOES: None
ABSENT: Amberg
ABSTAIN: None
ATTEST:
~- ~
J Lewis
Ci y Clerk, ~~
(City Seal)
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Council Agenda Statement
Meeting Date: November 12, 2007 ~i_
Through: Phillip Oates, City Manageri~~
From: Kristin Erchinger, Finance Director
Agenda Item: Resolution of Intent to Issue Bonds for Prison Expansion
BACKGROUND & JUSTIFICATION
Since 1984, The City of Seward has leased a portion of Tract E, Fourth of July Creek, Seward Marine
Industrial Center, to the State of Alaska to operate Spring Creek Correctional Facility. The original facility
was constructed utilizing lease certificates of participation which were backed by lease payments from the
State of Alaska. This type of financing does not pledge the full faith and credit of the City of Seward.
The State of Alaska Department of Corrections is interested in expanding the Spring Creek Correctional
Facility by adding approximately 144 new beds. The City has held public meetings where the issue of prison
expansion has been discussed. The State is now asking that the City support the prison expansion and agree to
enter into a new lease with the State, and to issue new bonds in an amount not to exceed $23 million. The next
step of this process will involve the City administration working with the State of Alaska to draft new lease and
operating agreements, and to engage the services of the City's financial advisor to work on our behalf to secure
the financing.
The Resolution of Intent to Issue Bonds is necessary in order for the City of Seward to utilize the proceeds
of the bond issue to reimburse the City for any costs the City may incur as a result of issuing these bonds. This
includes legal costs, consulting costs, financial advisor costs, and other costs incurred in the preparation of the
bond issue.
CONSISTENCY CHECKLIST
Where applicable, this agenda statement is consistent with the Seward City Code, Charter, Comprehensive
Plans, Land Use Plans, Strategic Plan and City Council Rules of Procedures.
Other:
FISCAL NOTE
By passing this resolution, the City will not incur any of its own costs, other than the costs of staff time
committed to the project, although those costs can also be recovered from the proceeds of the bond issue.
This resolution will not actually authorize the issuance of bonds. That will occur under separate Resolution.
Approved by Finance: v'~~ ~z%?~u~
RECOMMENDATION
City Council authorize the Resolution of Intent to Issue Bonds.
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