City of Falls Church

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1 1 2 3 City of Falls Church Meeting Date: Title: ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY OF FALLS CHURCH, VIRGINIA, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED FIFTEEN MILLION SIX HUNDRED THOUSAND DOLLARS ($15,600,000.00) TO PAY COSTS INCIDENT TO CONSTRUCTING, RECONSTRUCTING, EQUIPPING, AND/OR REEQUIPPING, IN WHOLE OR IN PART, THE MOUNT DANIEL ELEMENTARY SCHOOL; AND REQUESTING THE CIRCUIT COURT TO ORDER A SPECIAL REFERENDUM ELECTION ON THE QUESTION OF WHETHER THE ISSUANCE OF SUCH BONDS SHOULD BE AUTHORIZED. (TO14-25) Agenda No.: 10 (b) (1) Proposed Motion: MOVE adoption of (TO14-25) on second reading. NOTES: Originating Dept. Head: Wyatt Shields, City Manager FWS City Manager: Wyatt Shields FWS Interim City Attorney: Pat Taves JPT 7/10/14 Disposition by Council: CFO: Richard LaCondré RAL REQUEST: The School Board has formally requested that the City Council adopt an ordinance to approve a $15.6 million bond referendum this coming November for the Mount Daniel Elementary School expansion. The attached ordinance requests the Arlington County Circuit Court to place the bond referendum on the ballot for the November 4, 2014 general election, and authorizes the issuance of such bonds should the voters approve the referendum. The Council gave first reading to this ordinance on June 9, There are no changes to the ordinance since 1 st reading. The ordinance is now before Council for second reading and final passage. RECOMMENDATION: The staff recommendation is adoption of the Ordinance.

2 Page 2 of BACKGROUND: The adopted Capital Improvements Program provides funding in the amount of $15.6 million for the expansion of Mount Daniel Elementary School. Of that total project cost, $1 million was appropriated in FY14 (for which a bond in the amount of $1 million was issued in December 2013), $8 million in FY15, and $6.6 million is planned for FY16. The project will expand Mount Daniel to meet enrollment growth and to allow for second grade to be moved from TJ Elementary School to Mount Daniel Elementary. The City Council s financial policies call for a referendum to be held for certain capital projects. They state that: The Council shall put to referendum certain general obligation bonds: 1.Where the aggregate amount of the bond, for the bonded project or portion thereof exceeds ten percent of the General Fund budget for the fiscal year in which the bond(s) are anticipated to be issued. 2. The referendum requirement does not apply to bonds issued for water, sewer, fire, police and medical services projects. The aggregate amount of the bonds for the Mount Daniel Expansion Project ($15.6 million) exceeds ten percent of the City s general fund budget. In order for this matter to be placed on the ballot for the general election of November 4, 2014, the Council must approve the referendum question by ordinance and the Circuit Court of Arlington must enter an order on the ballot question at least 81 days prior to the election (i.e., before August 15, 2014). Accordingly, Council is requested to approve the ordinance at second reading on July 14, FISCAL IMPACT: The project is in the City s adopted Capital Improvements Program. Assuming the project is funded through a typical 20-year municipal bond with an interest rate between 3.5% and 4.5% the annual debt service cost for this project can be projected to be between $1,032,000 and $1,116,000 per year. This increase in debt service will be factored into the FY2016 and FY2017 annual budgets. TIMING: Immediate. With 2 nd reading and approval of the ordinance on July 14, the Interim City Attorney will have sufficient time to petition the Arlington County Circuit Court to enter an order for the referendum question.

3 Page 3 of (TO14-25) ORDINANCE AUTHORIZING THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE CITY OF FALLS CHURCH, VIRGINIA, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED FIFTEEN MILLION SIX HUNDRED THOUSAND DOLLARS ($15,600,000.00) TO PAY COSTS INCIDENT TO CONSTRUCTING, RECONSTRUCTING, EQUIPPING, AND/OR REEQUIPPING, IN WHOLE OR IN PART, THE MOUNT DANIEL ELEMENTARY SCHOOL; AND REQUESTING THE CIRCUIT COURT TO ORDER A SPECIAL REFERENDUM ELECTION ON THE QUESTION OF WHETHER THE ISSUANCE OF SUCH BONDS SHOULD BE AUTHORIZED. WHEREAS, the City Council ( Council ) of the City of Falls Church, Virginia ( City ), has determined that it is advisable to contract a debt and to issue general obligation bonds of the City in an aggregate principal amount not to exceed Fifteen Million Six Hundred Thousand Dollars ($15,600,000.00) for the purpose of paying the costs incident to constructing, reconstructing, equipping and/or reequipping, in whole or in part, the Mount Daniel Elementary School ( Mount Daniel Project ); and WHEREAS, in December 2013, the City issued a bond in the amount of One Million Dollars ($1,000,000.00) for initial planning work on the Mount Daniel Project, and WHEREAS, additional bonds in the amount of Fourteen Million Six Hundred Thousand Dollars ($14,600,000.00) need to be issued for completion of the Mount Daniel Project, and WHEREAS, pursuant to the authority of Chapter 7 of the City Charter ( Charter ), the Council proposes to call a special referendum election to take the sense of the qualified voters of the City on the question below regarding the authorization of the issuance of such general obligation bonds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FALLS CHURCH, VIRGINIA, HEREBY ORDAINS as follows: 1. The Council determines that it is advisable to contract a debt and to issue general obligation bonds of the City in the amount and for the purposes set forth below. 2. There are hereby authorized to be issued general obligation bonds of the City in an aggregate principal amount not to exceed Fifteen Million Six Hundred Thousand Dollars ($15,600,000.00) (the Bonds ) for the purpose of paying the costs incident to constructing, reconstructing, equipping and/or reequipping, in whole or in part, the Mount Daniel Elementary School.

4 Page 4 of The total cost for the work on the Mount Daniel Project is currently estimated to be Fifteen Million Six Hundred Thousand Dollars ($15,600,000) and it is the City s intention to pay all such estimated costs shall be paid from the proceeds of the Bonds. In the event the total cost of the Mount Daniel Project exceeds Fifteen Million Six Hundred Thousand Dollars ($15,600,000.00), any such additional costs will be paid from other sources. 4. The Bonds, together with the outstanding indebtedness of the City, within the meaning of Article VII, 10 of the Constitution of Virginia, will not exceed the limitations set by such Article VII, 10, and by 7.03 of the City Charter. 5. City Council estimates that the probable life of the newly constructed and/or reconstructed Mount Daniel Elementary School is 50 years. 6. Principal of and interest on the Bonds are to be paid from ad valorem taxes on real estate and tangible personal property in the City or as otherwise provided by law. The full faith and credit of the City are pledged to such payment. 7. The Bonds shall be sold at public sale upon sealed proposals as provided in 7.07 of the City Charter. 8. The Council hereby requests the Circuit Court of Arlington County Virginia, to order a referendum election on November 4, 2014, on the following question, provided that such date is at least eighty one (81) days after the date on which the Court enters its order. The question on the ballot shall be substantially in the following form: REFERENDUM ELECTION TO AUTHORIZE THE ISSUANCE OF BONDS TO PAY THE COSTS OF CONSTRUCTING, RECONSTRUCTING, EQUIPPING AND/OR REEQUIPPING, IN WHOLE OR IN PART, THE MOUNT DANIEL ELEMENTARY SCHOOL. NOVEMBER 4, 2014 QUESTION: Shall the City of Falls Church, Virginia, be authorized to contract a debt and issue its general obligation bonds in an aggregate principal amount not to exceed Fifteen Million Six Hundred Thousand Dollars ($15,600,000.00) for the purpose of paying the costs incident to constructing, reconstructing, equipping and/or reequipping, in whole or in part, the Mount Daniel Elementary School, and shall Ordinance No. of the City authorizing the issuance of such bonds be effective? { } YES { } NO

5 Page 5 of The City Clerk is instructed to file a certified copy of this Ordinance with the Circuit Court of Arlington County, Virginia, or to the judge thereof, in vacation, and the City Attorney shall prepare the necessary legal pleadings. 10. This Ordinance shall take effect immediately with respect to issuance of the Bonds if a majority of those voting in the special election approve the Ordinance. 1st Reading: nd Reading: Adoption: (T014-25)

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