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HomeMy WebLinkAboutResolution 2015 (16) Resolution No. 16 (2015) RESOLUTION AUTHORIZING THE BORROWING OF NOT ST R01 QNTY TO EXCEED $20,000,000; AND PROVIDING FOR THE ISSUANCE AND SALE OF GENERAL OBLIGATION BONDS THEREFORE 1 WHEREAS, it is necessary that funds be raised by St. Croix County, Wisconsin (the 2 "County") for the purpose of paying the costs of constructing and equipping a new skilled 3 nursing, community based residential and dementia crisis facility (the "Health Center Project"), 4 and there are insufficient funds on hand to pay said costs; 5 WHEREAS, the County Board hereby finds and determines that the Health Center 6 Project is within the County's power to undertake and serves a"public purpose" as that term is 7 defined in Section 67.04(1)(b) of the Wisconsin Statutes; and 8 WHEREAS, the County is authorized by the provisions of Chapter 67 of the Wisconsin 9 Statutes to borrow money and to issue its general obligation bonds for such public purposes. 10 NOW, THEREFORE, BE IT RESOLVED by the County Board of the County that: 11 Section 1. Authorization of the Bonds. For the purpose of paying the cost of the Health 12 Center Project, there shall be borrowed pursuant to Section 67.05 of the Wisconsin Statutes, a 13 principal sum of not to exceed TWENTY MILLION DOLLARS ($20,000,000) from one or 14 more purchasers to be determined by subsequent resolution of this County Board. 15 Section 2. Sale of the Bonds. The County Interim Finance Director(in consultation with 16 the County's financial advisor, Springsted Incorporated, Milwaukee, Wisconsin) shall cause an 17 Official Notice of Sale to be prepared and distributed and shall prepare or cause to be prepared 18 an Official Statement pursuant to SEC Rule 15c2-12 and take other actions necessary for the sale 19 of the County's general obligation bonds (the"Bonds"). The Bonds may be sold in one or more 20 series. Springsted, Incorporated is hereby appointed as the County's agent for purposes of 21 receiving and tabulating the bids received on the Bonds at its offices. 22 Section 3. Award of the Bonds. Following receipt of bids for the Bonds, the County 23 Board shall consider taking further action to provide the details of the Bonds including the final 24 principal amount of the Bonds, the interest rate or rates to be borne by the Bonds; and to levy a 25 direct annual irrepealable tax to pay the principal of and interest on the Bonds as required by law. Legal—Fiscal—Administrative Approvals: Legal Note: Requires 3/4 vote of entire Board (15) Fiscal Impact: Approving the Resolution enables the County to borrow$20,000,000. Issuance costs estimated at$119,500 will be deducted from the bond proceeds. Al' t_. Scott T, Cox, Cor or t o 'owns l 4/ /2015 1 olxec°t. it et, Interim 1a inance l kt� ;201 Zoe Pa rick ` orttp;�on, COO y�mi /2015 0515115 Administrative Committee Adopted 05/05/15 Administration Committee APPROVED ........ ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... RESULT: APPROVED [UNANIMOUS] Next: 5/5/2015 7:00 PM MOVER: Jill Ann Berke, Supervisor SECONDER: Ron Kiesler, Vice Chair AYES: Schachtner, Sjoberg, Berke, Kiesler, Achterhof Vote Confirmation. �vus . tm cr per 5 /2015 ti p s vus . <�c�tmcr, Su er 5/ / 015 St. Croix County Board of Supervisors Action: Roll Call -Vote Requirement— .................................................................................................................................................................................................................................................................................................................................... RESULT: ADOPTED [17 TO 2] MOVER: Travis Schachtner, Supervisor SECONDER: Jill Ann Berke, Supervisor AYES: Schachtner, Ring, Babbitt, Novotny, Sjoberg, Nielsen, Berke, Ostness, Larson, Hansen, Kiesler, Brinkman, Peterson, Anderson, Achterhof, Leibfried, Peavey NAYS: Chris Kilber, Scott Nelson This Resolution was Adopted by the St. Croix County Board of Supervisors on May 5, 2015 Cindy Campbell, County Clerk Springsted Incorporated 710 North Plankinton Ave.,Suite 804 Milwaukee, WI 53203 'wiingst etm Tel: 414-220-4250 Fax:414-220-4251 www.springsted.com MEMORANDUM TO: St. Croix County Administration Committee Patrick Thompson, County Administrator Robert Mittet,Assistant Finance Director FROM: Joseph M. Murray, CIPMA Vice President DATE: April 28, 2015 SUBJECT: Nursing Home Financing Plan As the County's Financial Advisor, we are pleased to assist the County in developing a financing plan to meet its financing needs to construct a new nursing home. Current nursing home construction estimates are expected to require approximately$20,000,000 in financing. Current interest rates remain attractive and would allow the County to enjoy its extremely strong Aa1 credit rating (Moody's)which was upgraded in 2014. Below you will find a table that tracks the 20th-year General Obligation (GO) bond rates as a general depiction of market movement. Interest rates aren't as low as they were at their historic lows in 2012, but they are close and are below where they were last August when the County last issued debt. BBI 25-bond(Revenue)and 20-bond(G.G.)Rates for S Years Ending ��11g1 dAM BBl 25 Bond BB1 20 B�imrtl. L412112 2`4;.'h S 5,M 1A CM &Y Public Sector Advisors St. Croix County, Wisconsin April 28, 2015 Page 2 The County has a record of strong fiscal operations, including limited use of debt and when issuing debt it has utilized an aggressive repayment schedule of primarily limiting issues to 10-years or less. The County presently only has three (3) debt issues outstanding — Series 2008 GO Promissory Notes (Prom Notes) maturing in 2016 and Series 2010A GO Prom Notes (Recovery Zone Recovery Bonds or RZEDBs) maturing in 2017 and the Series 2014A GO Prom Notes maturing in 2024. The County's current tax levy for debt service is$1,530,575(2015). Construction of the new nursing home will be over an extended period of time, allowing the County to split the projected $20,000,000 into multiple issues and still meet the necessary draw requests for payment. Splitting the issue into two issues of $10,000,000 will also allow the County to maintain its Bank Qualification (BQ). Bank Qualification allows banks to bid on the County's issues and receive tax-exempt benefits. To be Bank Qualified, the County may not issue more than $10.0 Million in tax-exempt debt in a calendar year. Maintaining a larger investor base allows the County to minimize its interest rates. Current estimates have the Bank Qualified option allowing the County to save approximately$1,250,000 in interest. In the attached schedules, you will find a projected financing plan to issue $20.0 Million in GO Bonds, with some of the key items noted below. Nursing Home Financing Plan Series 2015A Series 2016A TOTAL Issue Size $ 10,000,000 $ 10,000,000 $ 20,000,000 Description 20-Year, GO Bonds 19-Year, GO Bonds Dated Date September 1, 2015 April 1, 2016 Project Funds $ 9,937,500 $ 9,943,000 $ 19,880,500 Projected TIC 2.649/c 2.879/c Total Principal & Interest $ 13,161,925 $ 13,878,475 $ 27,040,400 The structuring of the nursing home debt looks to provide for a one-time tax levy increase for the additional debt service and then have it remain "level" at approximately $2,180,000/year moving forward in years 2016-2024. In 2025 total debt service will drop down to approximately$1,150,000/year as the 2014A will be paid off and the County will have additional capacity for future debt issues. It also anticipates the receipt of$450,000/year in nursing home revenue beginning in 2018 that can be applied to debt service. The 2016 debt service tax levy impact will rise to$2,187,442 - Increase of$656,867. The impact of the increase is 8.65-cents(2014 equalized value=$7,591,908,200)or$8.65 increase per$100,000 equalized value. The total cost impact of the financing plan (20-years total principal and interest)for the nursing home is $356.17 per $100,000 equalized value St. Croix County, Wisconsin April 28, 2015 Page 3 St. Croix County, Wisconsin Existing Debt+ Projected Debt Option 2A-2015 and 2016 Debt Issuance of$10M Each as Bank Qualified;20 Year Term Aggregate Debt Service --Accrual Basis Calendar 2008A GO 2010A TXBL GO 2014A GO Total $10M 2015 $10M 2016 Revenues Projected Total Year Prom Notes Prom Notes Prom Notes Outstanding Bonds Bonds Levy (RZEDB)* Debt 2015 539,987.50 759,485.00 231,102.08 1,530,574.58 1,530,574.58 2016 536,812.50 757,798.75 213,325.00 1,507,936.25 679,505.63 2,187,441.88 2017 - 885,768.75 611,325.00 1,497,093.75 253,697.50 433,316.25 2,184,107.50 2018 - 1,486,425.00 1,486,425.00 679,397.50 462,127.50 450,000.00 2,177,950.00 2019 1,480,425.00 1,480,425.00 680,697.50 468,527.50 450,000.00 2,179,650.00 2020 1,483,925.00 1,483,925.00 681,797.50 464,827.50 450,000.00 2,180,550.00 2021 1,475,050.00 1,475,050.00 677,747.50 471,027.50 450,000.00 2,173,825.00 2022 1,470,625.00 1,470,625.00 678,547.50 481,977.50 450,000.00 2,181,150.00 2023 1,477,375.00 1,477,375.00 677,960.00 471,802.50 450,000.00 2,177,137.50 2024 1,486,537.50 1,486,537.50 680,897.50 460,727.50 450,000.00 2,178,162.50 2025 677,272.50 922,602.50 450,000.00 1,149,875.00 2026 677,047.50 922,052.50 450,000.00 1,149,100.00 2027 681,297.50 925,827.50 450,000.00 1,157,125.00 2028 681,260.00 925,407.50 450,000.00 1,156,667.50 2029 676,827.50 925,337.50 450,000.00 1,152,165.00 2030 681,287.50 923,772.50 450,000.00 1,155,060.00 2031 679,688.75 925,582.50 450,000.00 1,155,271.25 2032 677,365.00 920,926.25 450,000.00 1,148,291.25 2033 679,227.50 925,092.50 450,000.00 1,154,320.00 2034 680,185.00 922,980.00 450,000.00 1,153,165.00 2035 680,217.50 924,560.00 450,000.00 1,154,777.50 - $1,099,975.00 $2,403,052.50 $11,416,114.58 1 $14,895,967.08 $13,161,924.38 $13,878,475.00 $8,100,000.00 $33,836,366.46 *The 20108 Bonds are gross of the federal credit. On May 5th the Administration Committee will review the proposed financing at a special meeting to determine if the County will proceed with issuing up to $20.OM for the nursing home. The County's bond counsel has provided the County with the necessary authorizing resolution for the full Board's consideration on May 51h, immediately following the special Administration Committee meeting. Issuance of the proposed Series 2015A and 2016A GO Bonds requires the Board to authorize the debt on a % affirmative vote or 15 affirmative votes of the 19 Board members. If approved at that time, we will continue to work with County staff and bond counsel to prepare the necessary offering and award documents for the Board to consider the award of the bonds at its meeting on August 41h. This would allow the County to receive the proceeds in early September, as well as know the final debt service to be incorporated into the County's 2016 Budget. I will be in attendance at the May 51h Administration Committee and Board meetings to discuss the proposed nursing home financing plan further, the issuance process and answer questions that the Committee/Board may have. If you have any questions prior to the meeting, please feel free to contact me at 414.220.4257/imurray(a,springsi d,com. 1 There is another Statutory provision that provides for the County to issue debt without the%vote requirement if the projected debt service tax levy will not exceed the County's debt tax levy rate in effect in 1992,however use of this provision is extremely rare. St. Croix County, Wisconsin Existing Debt+ Projected Debt Option 2A-2015 and 2016 Debt Issuance of$10M Each as Bank Qualified;20 Year Term Aggregate Debt Service--Accrual Basis Calendar 2008A GO Prom 2010A TXBL GO 2014A GO Prom Total $10M 2015 $10M 2016 Revenues Projected Total Year Notes Prom Notes Notes Outstanding Bonds Bonds Levy (RZEDB)" Debt 2015 539,987.50 759,485.00 231,102.08 1,530,574.58 1,530,574.58 2016 536,812.50 757,798.75 213,325.00 1,507,936.25 679,505.63 2,187,441.88 2017 - 885,768.75 611,325.00 1,497,093.75 253,697.50 433,316.25 2,184,107.50 2018 - 1,486,425.00 1,486,425.00 679,397.50 462,127.50 450,000.00 2,177,950.00 2019 1,480,425.00 1,480,425.00 680,697.50 468,527.50 450,000.00 2,179,650.00 2020 1,483,925.00 1,483,925.00 681,797.50 464,827.50 450,000.00 2,180,550.00 2021 1,475,050.00 1,475,050.00 677,747.50 471,027.50 450,000.00 2,173,825.00 2022 1,470,625.00 1,470,625.00 678,547.50 481,977.50 450,000.00 2,181,150.00 2023 1,477,375.00 1,477,375.00 677,960.00 471,802.50 450,000.00 2,177,137.50 2024 1,486,537.50 1,486,537.50 680,897.50 460,727.50 450,000.00 2,178,162.50 2025 677,272.50 922,602.50 450,000.00 1,149,875.00 2026 677,047.50 922,052.50 450,000.00 1,149,100.00 2027 681,297.50 925,827.50 450,000.00 1,157,125.00 2028 681,260.00 925,407.50 450,000.00 1,156,667.50 2029 676,827.50 925,337.50 450,000.00 1,152,165.00 2030 681,287.50 923,772.50 450,000.00 1,155,060.00 2031 679,688.75 925,582.50 450,000.00 1,155,271.25 2032 677,365.00 920,926.25 450,000.00 1,148,291.25 2033 679,227.50 925,092.50 450,000.00 1,154,320.00 2034 680,185.00 922,980.00 450,000.00 1,153,165.00 2035 680,217.50 924,560.00 450,000.00 1,154,777.50 - $1,099,975.00 $2,403,052.50 $11,416,114.58 1 $14,895,967.08 $13,161,924.38 $13,878,475.00 $8,100,000.00 $33,836,366.46 "The 2010B Bonds are gross of the federal credit. Aggll gat/412�r312015/2,01 PM kPf,V �19 [S ifd $1010001000 St. Croix County, Wisconsin General Obligation Bonds, Series 2015 Nursing Home -Option 2A Current BQ Rates As of April 23, 2015 + 30bps Sources & Uses Dated 09/01/2015 1 Delivered 09/01/2015 Sources Of Funds ParAmount of Bonds..................................................................................................................................................... $10,000,000.00 ReofferingPremium....................................................................................................................................................... 202,456.80 TotalSources................................................................................................................................................................ $10,202,456.80 Uses Of Funds Depositto Project Fund.................................................................................................................................................. 9,937,500.00 Deposit to Debt Service Fund(Premium)....................................................................................................................... 122,456.80 Total Underwriter's Discount (0.800%).......................................................................................................................... 80,000.00 Costsof Issuance........................................................................................................................................................... 62,500.00 TotalUses..................................................................................................................................................................... $10,202,456.80 2015GOB-ds-}$J'OMII(1J/SINGL�EEUREO�!SE/ 412312015/ 3:01EM Il� ��,w„'r N �1i I�'„ iP N �4 �u�w„�!l $10,000,000 St. Croix County, Wisconsin General Obligation Bonds, Series 2015 Nursing Home-Option 2A Current BQ Rates As of April 23, 2015 + 30bps DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I Fiscal Total 09/01/2015 - - - - 04/01/2016 400,000.00 2.000% 152,656.88 552,656.88 10/01/2016 - - 126,848.75 126,848.75 679,505.63 04/01/2017 126,848.75 126,848.75 - 10/01/2017 - - 126,848.75 126,848.75 253,697.50 04/01/2018 430,000.00 2.000% 126,848.75 556,848.75 - 10/01/2018 - - 122,548.75 122,548.75 679,397.50 04/01/2019 440,000.00 2.000% 122,548.75 562,548.75 - 10/01/2019 - - 118,148.75 118,148.75 680,697.50 04/01/2020 450,000.00 2.000% 118,148.75 568,148.75 - 10/01/2020 - - 113,648.75 113,648.75 681,797.50 04/01/2021 455,000.00 2.000% 113,648.75 568,648.75 - 10/01/2021 - - 109,098.75 109,098.75 677,747.50 04/01/2022 465,000.00 2.000% 109,098.75 574,098.75 - 10/01/2022 - - 104,448.75 104,448.75 678,547.50 04/01/2023 475,000.00 2.500% 104,448.75 579,448.75 - 10/01/2023 - - 98,511.25 98,511.25 677,960.00 04/01/2024 490,000.00 2.500% 98,511.25 588,511.25 - 10/01/2024 - - 92,386.25 92,386.25 680,897.50 04/01/2025 500,000.00 3.000% 92,386.25 592,386.25 - 10/01/2025 - - 84,886.25 84,886.25 677,272.50 04/01/2026 515,000.00 3.000% 84,886.25 599,886.25 - 10/01/2026 - - 77,161.25 77,161.25 677,047.50 04/01/2027 535,000.00 3.000% 77,161.25 612,161.25 - 10/01/2027 - - 69,136.25 69,136.25 681,297.50 04/01/2028 550,000.00 2.550% 69,136.25 619,136.25 - 10/01/2028 - - 62,123.75 62,123.75 681,260.00 04/01/2029 560,000.00 2.650% 62,123.75 622,123.75 - 10/01/2029 - - 54,703.75 54,703.75 676,827.50 04/01/2030 580,000.00 2.800% 54,703.75 634,703.75 - 10/01/2030 - - 46,583.75 46,583.75 681,287.50 04/01/2031 595,000.00 2.850% 46,583.75 641,583.75 - 10/01/2031 - - 38,105.00 38,105.00 679,688.75 04/01/2032 610,000.00 2.900% 38,105.00 648,105.00 - 10/01/2032 - - 29,260.00 29,260.00 677,365.00 04/01/2033 630,000.00 2.950% 29,260.00 659,260.00 - 10/01/2033 - - 19,967.50 19,967.50 679,227.50 04/01/2034 650,000.00 3.000% 19,967.50 669,967.50 - 10/01/2034 - - 10,217.50 10,217.50 680,185.00 04/01/2035 670,000.00 3.050% 10,217.50 680,217.50 - 10/01/2035 - - - - 680,217.50 Total $10,000,000.00 $3,161,924.38 $13,161,924.38 SIGNIFICANT DATES DatedDate.............................................................................................................................................................................. 9/01/2015 DeliveryDate........................................................................................................................................................................... 9/01/2015 FirstCoupon Date................................................................................................................................................................... 4/01/2016 Yield Statistics BondYear Dollars................................................................................................................................................................... $113,483.33 AverageLife............................................................................................................................................................................ 11.348 Years AverageCoupon..................................................................................................................................................................... 2.7862456% Net Interest Cost(N IC)............................................................................................................................................................ 2.6783383% True Interest Cost(TIC).......................................................................................................................................................... 2.6428006 Bond Yield for Arbitrage Purposes......................................................................................................................................... 2.5597354% All Inclusive Cost(AIC)........................................................................................................................................................... 2.7083342% IRS Form 8038 NetInterest Cost..................................................................................................................................................................... 2.5692802 WeightedAverage Maturity.................................................................................................................................................... 11.290 Years 2015 GO F-d, f-$10Mry I tlORP(1) /SEVGLEPOSE/412312015/3'01 PM st p $1010001000 St. Croix County, Wisconsin General Obligation Bonds, Series 2016 Nursing Home -Option 2A Current BQ Rates As of April 23, 2015 + 50bps Sources & Uses Dated 04/01/2016 1 Delivered 04/01/2016 Sources Of Funds ParAmount of Bonds..................................................................................................................................................... $10,000,000.00 ReofferingPremium....................................................................................................................................................... 172,916.90 TotalSources................................................................................................................................................................ $10,172,916.90 Uses Of Funds Depositto Project Fund.................................................................................................................................................. 9,943,000.00 Deposit to Debt Service Fund(Premim)......................................................................................................................... 92,916.90 Total Underwriter's Discount (0.800%).......................................................................................................................... 80,000.00 Costsof Issuance........................................................................................................................................................... 57,000.00 TotalUses..................................................................................................................................................................... $10,172,916.90 2016 GO Band,-}$10MII(1)/SINGLEEOREO�!SE/ 412312015/ 3:01 EM Il� ��,w„'r N �1i I�'„ iP N �4 �u�w„�!l $10,000,000 St. Croix County, Wisconsin General Obligation Bonds, Series 2016 Nursing Home-Option 2A Current BQ Rates As of April 23, 2015 + 50bps DEBT SERVICE SCHEDULE Date Principal Coupon Interest Total P+I Fiscal Total 04/01/2016 - - 04/01/2017 288,877.50 288,877.50 10/01/2017 - - 144,438.75 144,438.75 433,316.25 04/01/2018 175,000.00 2.000% 144,438.75 319,438.75 - 10/01/2018 - - 142,688.75 142,688.75 462,127.50 04/01/2019 185,000.00 2.000% 142,688.75 327,688.75 - 10/01/2019 - - 140,838.75 140,838.75 468,527.50 04/01/2020 185,000.00 2.000% 140,838.75 325,838.75 - 10/01/2020 - - 138,988.75 138,988.75 464,827.50 04/01/2021 195,000.00 2.000% 138,988.75 333,988.75 - 10/01/2021 - - 137,038.75 137,038.75 471,027.50 04/01/2022 210,000.00 2.000% 137,038.75 347,038.75 - 10/01/2022 - - 134,938.75 134,938.75 481,977.50 04/01/2023 205,000.00 3.000% 134,938.75 339,938.75 - 10/01/2023 - - 131,863.75 131,863.75 471,802.50 04/01/2024 200,000.00 3.000% 131,863.75 331,863.75 - 10/01/2024 - - 128,863.75 128,863.75 460,727.50 04/01/2025 675,000.00 3.000% 128,863.75 803,863.75 - 10/01/2025 - - 118,738.75 118,738.75 922,602.50 04/01/2026 695,000.00 3.000% 118,738.75 813,738.75 - 10/01/2026 - - 108,313.75 108,313.75 922,052.50 04/01/2027 720,000.00 3.000% 108,313.75 828,313.75 - 10/01/2027 - - 97,513.75 97,513.75 925,827.50 04/01/2028 740,000.00 2.600% 97,513.75 837,513.75 - 10/01/2028 - - 87,893.75 87,893.75 925,407.50 04/01/2029 760,000.00 2.750% 87,893.75 847,893.75 - 10/01/2029 - - 77,443.75 77,443.75 925,337.50 04/01/2030 780,000.00 2.850% 77,443.75 857,443.75 - 10/01/2030 - - 66,328.75 66,328.75 923,772.50 04/01/2031 805,000.00 3.000% 66,328.75 871,328.75 - 10/01/2031 - - 54,253.75 54,253.75 925,582.50 04/01/2032 825,000.00 3.050% 54,253.75 879,253.75 - 10/01/2032 - - 41,672.50 41,672.50 920,926.25 04/01/2033 855,000.00 3.100% 41,672.50 896,672.50 - 10/01/2033 - - 28,420.00 28,420.00 925,092.50 04/01/2034 880,000.00 3.150% 28,420.00 908,420.00 - 10/01/2034 - - 14,560.00 14,560.00 922,980.00 04/01/2035 910,000.00 3.200% 14,560.00 924,560.00 - 10/01/2035 - - - - 924,560.00 Total $10,000,000.00 $3,878,475.00 $13,878,475.00 SIGNIFICANT DATES DatedDate............................................................................................................................................................................ 4/01/2016 DeliveryDate......................................................................................................................................................................... 4/01/2016 FirstCoupon Date................................................................................................................................................................. 4/01/2017 Yield Statistics BondYear Dollars................................................................................................................................................................. $130,480.00 AverageLife.......................................................................................................................................................................... 13.048 Years AverageCoupon................................................................................................................................................................... 2.9724670% NetInterest Cost(NIC).......................................................................................................................................................... 2.9012554% TrueInterest Cost(TIC)........................................................................................................................................................ 2.8746665% Bond Yield for Arbitrage Purposes........................................................................................................................................ 2.8004584% All Inclusive Cost(AIC).......................................................................................................................................................... 2.9279997% IRS Form 8038 NetInterest Cost................................................................................................................................................................... 2.8064595% WeightedAverage Maturity................................................................................................................................................... 12.979 Years 2016 GO Bonds-$I OM(1)/SINGLEPUPPOSE/412312015/361 PM S �I li."i 1['11 it� t e(-'