HomeMy WebLinkAboutRes2008-057Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2008-057
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CI~'Y MANAGER TO ENTER INTO A
MEMORANDUM OF UNDERSTANDING WITH THE STATE OF ALASKA
FOR PLANNING, FINANCING, DESIGN, AND CONSTRUCTION OF THE
SPRING CREEK CORRECTIONAL CENTER EXPANSION PROJECT, AND
APPROPRIATING $100,000 TO BE REIMBURSED FROM FUTURE BOND
PROCEEDS
WHEREAS, Ch. 160, SLA 2004 (the "Act") passed by the State Legislature authorized the
State of Alaska to enter into a joint ownership agreement and alease-purchase agreement with the
City of Seward for the expansion of Spring Creek Correctional Center ("SCCC") by up to 144 beds;
and
WHEREAS, the Act conditions the State's authority to enter into such agreements based on
the average per-bed capital costs not exceeding $135,000, as adjusted for inflation, and annual lease
payments not exceeding $14,600 per bed, and that the State shall own the SCCC at the end of the
lease term; and
WHEREAS, the City and the State desire to enter into a Memorandum of Understanding for
the purpose of pursuing project planning and design, with the State assuming the costs of planning
and design and the State Department of Transportation and Public Facilities serving as the project
manager and contracting authority for the expansion project; and
WHEREAS, the Memorandum of Understanding requires that the City of Seward, as owner
of the current facility and site, accept responsibility for pursuing revenue bond financing supported
by future lease payments by the State, which is the same financing mechanism utilized to construct
the initial SCCC facility; and
WHEREAS, the City and the State intend that at the end of the term of repayment of the
bonds, the State will become the owner of Spring Creek Correctional Facility; and
WHEREAS, the State anticipates being able to fund planning and design efforts without City
assistance, but in the event State funds are not made available to the project until after July 1, the
City desires to appropriate an amount not to exceed $100,000 to expedite the project, with said funds
to be reimbursed by future bond proceeds andlor appropriations from the State.
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CITY OF SEWARD, ALASKA
RESOLUTION 2008-057
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City Manager is authorized to enter into a Memorandum of
Understanding with the State of Alaska in substantially the form as presented at this meeting,
for the purpose of design, financing, and construction of the expansion of Spring Creek
Correctional Center.
Section 2. Funding in the amount of $100,000 is hereby appropriated from the
General Fund fund balance account no. 101-0000-3070-0103 to the Capital Acquisition Fund
account no. 103-1030-5910 for the purpose of initial planning and design, with said
expenditures contingent on the city manager authorizing an amendment to the Memorandum
of Understanding which ensures repayment to the City from bond proceeds andlor future
State appropriations.
Section 3. This resolution shall take effect immediately upon adoption.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 23rd
day of June, 2008.
THE CITY OF SEWARD, ALASKA
Clark Corbridge, May
AYES: Dunham, Valdatta, Bardarson, Amberg, Kellar, Corbridge
NOES: None
ABSENT: Smith
ABSTAIN: None
ATTEST:
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COUNCIL AGENDA STATEMENT
Meeting Date: June 23, 2008
From: Phillip Oates, City Manager`~~,~~
RE: Memorandum of Understanding for Prison Expansion
BACKGROUND & JUSTIFICATION:
The Seward City Council approved Resolution 2D07-98 on November 12, 2007, authorizing an Intent to Issue
Bonds for the purpose of expanding the Spring Creek Correctional Center ("SCCC"). This action of the City
Council represented the City's initial commitment to the prison expansion project. This project was authorized
by Ch. 160, SLA 2004, which approved expansion of SCCC by up to 144 beds, provided that three conditions
were met: 1) capital costs of the project may not exceed $135,000 per bed, as adjusted for inflation; 2) annual
lease payments for the project may not exceed $14,600 per bed; and 3) the State shall own the SCCC at the end
of the lease term.
The next step in this process involves project planning and design. The City of Seward and the State of Alaska
are entering into a Memorandum of Understanding (the "MOU"), with the State committing to pay the initial
costs of planning and design of the project, and the City committing to pursue revenue bonds to fund the
project. The revenue bonds will be secured by the State's annual lease payments, and do not represent a
general obligation pledge of the City.
The Seward City Council approved Resolution 2008-15 on February 25, 2008, which authorized the city
manager to enter into a MOU, but the terms of the MOU have changed somewhat, so we are bringing forward
this revision. However, that action appropriated $100,000 to assist the State with initial planning and design,
to be repaid through future bond proceeds and/or State appropriations.
CONSISTENCY CHECK: 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: e~~
There is no cost associated with this MO ,since an appropriation of $100,000 was previously made to enable
this project to move forward. The City will be reimbursed through future revenue bonds and/or State
appropriations.
RECOMMENDATION:
City Council approve the Memorandum of Understanding between the City of Seward and the State of
Alaska for the Spring Creek Correctional Center expansion project.
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