Ordinance 18-26(A)(S)(A) General Obligation Bonds for Police Station and Sales Tax to Voters

CITY OF HOMER
HOMER, ALASKA

Council/Mayor

ORDINANCE 18-26(A)(S)(A)

AN ORDINANCE OF THE CITY COUNCIL OF HOMER, ALASKA, AUTHORIZING THE CITY TO ISSUE GENERAL OBLIGATION BONDS IN THE PRINCIPAL AMOUNT NOT TO EXCEED $5,000,000 TO FINANCE THE ACQUISITION AND CONSTRUCTION OF A POLICE STATION; AMENDING HCC 9.16.010 TO PROVIDE FOR AN INCREASE IN THE RATE OF THE CITY SALES TAX FROM 4.5% TO 4.85% WITH 0.3% OF THE INCREASED RATE TO PROVIDE FUNDS TO PAY DEBT SERVICE ON THE GENERAL OBLIGATION BONDS WITH 0.3% OF THE SALES TAX RATE INCREASE EXPIRING ON DECEMBER 31 OF THE YEAR WHEN THE CITY HAS RECEIVED SUFFICIENT FUNDS FROM THAT 0.3% SALES TAX RATE INCREASE TO PAY ALL OF THAT DEBT SERVICE; AND SUBMITTING THE QUESTION OF THE ISSUANCE OF SUCH BONDS AND SUCH SALES TAX RATE INCREASE TO THE QUALIFIED VOTERS OF THE CITY AT A SPECIAL ELECTION TO BE HELD ON THE JUNE 26, 2018.

WHEREAS, The City of Homer (the “City”) is in need of a new police station; and

WHEREAS, The City Council views the acquisition and construction of a new police station and related capital improvements authorized herein as necessary and beneficial to the community, and determines that to fund such improvements general obligation bonds of the City should be authorized, issued and sold; and

WHEREAS, The City Council also deems it necessary to increase the rate of the City sales tax to provide funds to pay costs of public safety operations and capital improvements, including without limitation part of the debt service on such general obligation bonds; and

WHEREAS, Under the provisions of AS 29.47.190 the City may incur general obligation debt only after a bond authorization ordinance is approved by a majority of those voting on the question at a regular or special election; and

WHEREAS, Under the provisions of AS 29.45.700(b) and AS 29.45.670, the City may increase the rate of its sales tax only after an ordinance authorizing the increase is approved by a majority of those voting on the question at a regular or special election; and

WHEREAS, Submitting the aforementioned questions to the voters at a special election will ensure that the project has the full support of the voters before investing additional design dollars and allow the project to take advantage of precious additional months of construction season.

NOW, THEREFORE, THE CITY OF HOMER ORDAINS:

Section 1.  It is hereby determined to be for a public purpose and in the public interest of the City to incur general obligation bonded indebtedness in an amount not to exceed Five Million Dollars ($5,000,000) for the purpose of paying the cost of planning, designing, and constructing a new police station and related capital improvements.

Section 2.  The City is authorized to borrow the sum of Five Million Dollars ($5,000,000) to finance the capital improvements described in Section 1, and the borrowing shall be evidenced by the issuance of general obligation bonds of the City.  The full faith and credit of the City are pledged for payment of the principal of and interest on the bonds, and ad valorem taxes upon all taxable property in the City shall be levied without limitation as to rate or amount to pay the principal of and interest on the bonds when due.

Section 3.  Homer City Code 9.16.010 is amended to read as follows:

9.16.010  Levied.

a. A consumer’s sales tax in the amount of three and three-quarters percent is levied by the City on all sales, rents and services within the City except as the same may be otherwise exempted by law.

b. An additional consumer’s sales tax in the amount of three-quarters percent is hereby levied by the City of Homer on all sales, rents and services within the City except as the same may be otherwise exempted by law, for the purpose of funding debt retirement of the sewer treatment plant improvements, and to the extent revenues from such tax exceed such debt retirement obligations, for the purpose of funding water and sewer systems.

c. An additional consumer’s sales tax in the amount of thirty five hundredths of one percent (0.35%) is hereby levied by the City of Homer on all sales, rents and services within the City, except as the same may be otherwise exempted by law, for the purpose of funding public safety operations and infrastructure within the City, including without limitation construction of a police station, with 0.3 percent of the sales tax rate providing funds to pay debt service on general obligation bonds authorized by Ordinance 18-26(A)(S) and expiring on December 31 of the year when the City has received sufficient funds from that  sales tax rate to pay all of that debt service.

Section 4.  A special election shall be held in and for the City on June 26, 2018, at which the City shall submit the following proposition to the qualified voters of the City.  The proposition must receive an affirmative vote from a majority of the qualified voters voting on the question to be approved.

PROPOSITION NO. 1

GENERAL OBLIGATION BONDS FOR
A NEW POLICE STATION AND RELATED CAPITAL IMPROVEMENTS;
0.35% SALES TAX RATE INCREASED FROM 4.5% TO 4.85%

Shall the City of Homer incur debt and issue general obligation bonds in an amount not to exceed Five Million Dollars ($5,000,000) to finance the planning, design and construction of a police station and related capital improvements; and shall the rate of City sales tax be increased by thirty five hundredths percent (0.35%) for the purpose of funding public safety operations and infrastructure within the City, including without limitation construction of a police station, with 0.3% of the sales tax rate increase to pay debt service on the general obligation bonds with the 0.3% sales tax rate increase expiring on December 31 of the year when the City has received sufficient funds from that 0.3% sales tax rate increase to pay all of that debt service?

The bonds shall be secured by a pledge of the full faith and credit of the City.  (Ordinance 18-26(A)(S)(A))

Section 5.  The proposition, both for paper ballots and machine ballots, shall be printed on a ballot which may set forth other general obligation bond propositions, and the following words shall be added as appropriate next to a space provided for marking the ballot for voting by hand or machine:

PROPOSITION NO. ____

O Yes

O No

Section 6.  Section 2 of this ordinance shall become effective only if the proposition described in Section 4 is approved by a majority of the qualified voters voting on the proposition at the June 26, 2018 special City election.  Section 3 of this ordinance shall become effective January 1, 2019, but only if the proposition described in Section 4 is approved by a majority of the qualified voters voting on the proposition at the June 26, 2018 special City election.  The remaining sections of this ordinance shall become effective upon passage.

Section 7.  Section 3 of this Ordinance is of a permanent and general character and shall be included in the City Code.  The remainder of this ordinance is not of a permanent nature and as such, shall not be codified.

ENACTED BY THE CITY COUNCIL OF THE CITY OF HOMER, ALASKA, this _____ day of _______ 2018.

CITY OF HOMER

______________________
BRYAN ZAK, MAYOR

ATTEST:

____________________________

MELISSA JACOBSEN, MMC, CITY CLERK

YES:

NO:

ABSTAIN:

ABSENT:

First Reading:

Public Reading:

Second Reading:

Effective Date:

Reviewed and approved as to form:

                                                                                                                                                                                                               
Katie Koester, City Manager                                                                  Holly C. Wells, City Attorney

Date: _________________________                                                Date: _________________________