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Home My WebLink About08-11-16 CC Mtg - A1. Resolution 4708 Page 1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Anna Rosenberry, Administrative Services Director Chuck Winn, Assistant City Manager SUBJECT: Resolution No. 4708 – A Resolution of the City Commission submitting to the qualified electors of the City of Bozeman, Montana, the question of authorizing the City to levy up to 18.21 mills per year for up to 20 years to raise approximately $1,634,500 per year for the purpose of paying 30.26% of the annual debt service of general obligation bonds of Gallatin County, Montana issued to finance the costs of the Joint City-County Law and Justice Facilities. MEETING DATE: August 11, 2016 AGENDA ITEM TYPE: Action RECOMMENDATION: Listen to staff presentation, take public comment, and adopt resolution with any changes recommended. PROPOSED MOTION: Having considered public comment and the information presented by staff, I hereby move to adopt Resolution No. 4708. SUMMARY: On June 27, 2016, after hearing a presentation from staff on the Joint Law and Justice Campus Project, the Commission directed us to prepare the attached resolution. This action will place a mill levy question to the voters of the City of Bozeman this November to pay the city-specific costs of the joint project. The requested resolution is attached, and includes the actual form of the ballot language. The resolution asks voters to vote “yes” or “no” on an increase to the City’s mill levy of up to 18.21 mills (raising up to approximately $1,634,500 per year) for up to 20 years to fund 30.26% of the debt service for the City’s share of the project’s construction costs to be funded with bonds. Those costs are estimated to total $20,667,580. The City Commission directed staff to fund ongoing operations and maintenance costs within the City’s authorized mill levy cap minus the nine mills set aside by the City Commission after the successful passage of the county-wide 9-1-1 mill levy. At the same time, Gallatin County will be asking voter across the county (including those living within the City of Bozeman) to approve the issuance of all of the construction bonds. BACKGROUND: Since February 2015, the City and County have been working together to design a joint law and justice Campus project. The project as submitted to the City Commission Page 2 on June 27th, 2016, consists of two buildings designed to provide facilities for the City and County’s criminal justice functions as follows; Law Enforcement Building (59,719 gross square feet): • Bozeman Police • County Sheriff and Coroner • Joint Evidence Functions • Drug Task Force Operations • Special Response Team • Law Enforcement Records Courts Building (121,940 gross square feet): • Municipal Courts and Clerks • Justice Courts and Clerks • District Courts and Clerks • City Prosecutors • County Attorney • Victim Services • Youth Court Services On July 11, 2016 the City Commission approved an interlocal agreement that describes the structure of land ownership, the City’s payment to the County for an interest in the land acquisition required for the project, funding mechanisms for the project, the allocation of construction costs and ongoing operations and maintenance costs, oversight and project management during construction and pre-construction phases of the project and future payment for services. Additionally, the interlocal agreement outlines a condominium governance structure with the City and County each having 50% voting interests in the condominium’s common elements. Based on the provisions outlined in the approved interlocal agreement, the County will ask all County voters to approve general obligation bonds for construction of the project, currently estimated at $68,300,000. The City will ask City voters to approve a mill levy to reimburse the County for the City’s proportional share of the project costs financed through the bond, currently estimated at $20,667,580. Both ballot measures must be approved by voters for the project to be constructed. UNRESOLVED ISSUES: None. ALTERNATIVES: As suggested by the City Commission. FISCAL EFFECTS: The immediate fiscal effects of putting this question to the voters will be the election costs that the city must reimburse to the Gallatin County election office. The FY17 budget contains $10,000 for that purpose. If approved, the measure would have property tax impacts on all city property owners. The city’s mill levy would go into effect in October 2017 (Fiscal Year 18) so that the City’s first annual payment could be made to the County prior to the setting of their debt service levy rate for taxes in October 2018. Statute requires that the mill levy ballot language express an estimated cost for property valued on the tax rolls at $100,000 and $200,000. We have also included the cost for our median valued Page 3 residence in Bozeman. As of our current tax roll, the median residence in Bozeman has a value for tax purposes of approximately $240,000 on the records of the Department of Revenue. The attached resolution includes ballot language that states the median value and cost of the 18.21 mill levy. City of Bozeman Levy Authorized Number of Mills Estimated Annual Levy Annual Dollar Cost of Levy to Median Home Monthly Dollar Cost of Levy to Median Home 18.21 mills $1,634,500 $58.93/year $4.91/month Ballot language is stated using the market values and taxable values in effect at the time of the vote (Fiscal Year 2017), and not at the time the measure goes into effect (Fiscal Year 2018). Ballot language also does not reflect the fact that our community’s taxable value has increased annually nearly every year. We expect that the annual cost to taxpayers will decrease as our tax base grows, because we will be able to levy fewer mills to generate the same dollars for debt payments. The project will be constructed only if both the County bond and the City mill levy are approved. As residents of Gallatin County, City residents will be required to pay both the County bond costs and the City mill levy if the project recieves voter approval. The table below, and the attached Tax Payer Impact Analysis, show the combined costs for a City of Bozeman property owner, should both measures pass. "Market value of taxable residential property" Annual County Allocation Annual City Allocation Total Cost - Annual Total Cost - Monthly $100,000 $ 20.33 $ 24.58 $ 44.91 $ 3.74 $200,000 $ 40.66 $ 49.16 $ 89.82 $ 7.49 $240,000 (median) $ 48.75 $ 58.93 $ 107.68 $ 8.97 Attachments: Resolution 4708 Estimated Mill Levy Impact – City of Bozeman Levy Report compiled on: August 5, 2016 CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and appointed City Clerk of the City of Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of a Resolution entitled: “A RESOLUTION OF THE CITY COMMISSION SUBMITTING TO THE QUALIFIED ELECTORS OF THE CITY OF BOZEMAN, MONTANA, THE QUESTION OF AUTHORIZING THE CITY TO LEVY UP TO 18.21 MILLS PER YEAR FOR UP TO 20 YEARS TO RAISE APPROXIMATELY $1,634,500 PER YEAR FOR THE PURPOSE OF PAYING 30.26% OF THE ANNUAL DEBT SERVICE OF GENERAL OBLIGATION BONDS OF GALLATIN COUNTY, MONTANA ISSUED TO FINANCE THE COSTS OF THE JOINT CITY-COUNTY LAW AND JUSTICE FACILITIES” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Commission at a special meeting on August 11, 2016, and that the meeting was duly held by the City Commission and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Resolution at said meeting, the following Commission Members voted in favor thereof: ________________________________ ______________________________ ; those Commissioners who voted against the same: _____________________________ . WITNESS my hand and seal officially this __ day of August, 2016. (SEAL) Robin Crough Bozeman City Clerk RESOLUTION NO. 4708 A RESOLUTION OF THE CITY COMMISSION SUBMITTING TO THE QUALIFIED ELECTORS OF THE CITY OF BOZEMAN, MONTANA, THE QUESTION OF AUTHORIZING THE CITY TO LEVY UP TO 18.21 MILLS PER YEAR FOR UP TO 20 YEARS TO RAISE APPROXIMATELY $1,634,500 PER YEAR FOR THE PURPOSE OF PAYING 30.26% OF THE ANNUAL DEBT SERVICE OF GENERAL OBLIGATION BONDS OF GALLATIN COUNTY, MONTANA ISSUED TO FINANCE THE COSTS OF THE JOINT CITY- COUNTY LAW AND JUSTICE FACILITIES BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”) as follows: Section 1. Recitals. 1.01. Authorization. A city council or commission is authorized pursuant to Section 15- 10-425, Montana Code Annotated, to increase its mill levies for a specific purpose by conducting a mill levy election as prescribed by law. 1.02. Proposed Project. The Board of County Commissioners of Gallatin County, Montana (the “County”) will submit to the electors of the County qualified to vote at bond elections the question of whether the County is authorized to sell and issue general obligation bonds of the County in one or more series in the aggregate principal amount of up to $68,300,000 (the “County Bonds”) for the purpose of providing funds to pay the costs of designing, constructing, equipping, and furnishing new court and law enforcement facilities in replacement of the existing facilities for use by the County and the City to consist of a new headquarters for County sheriff and City police operations, new courtrooms for the County and City and other offices necessary for the administration of justice and related improvements, and to pay costs associated with the sale and issuance of the bonds. The County will submit the bond proposition to eligible voters in the County at a special County election held in conjunction with the general election on November 8, 2016 1.03. Mill Levy. The City Commission has determined that in conjunction with the above County bond proposition it is equitable and in the best interests of the City to seek authority to levy up to 18.21 mills per year for up to 20 years to raise approximately $1,634,500 per year for the purpose of paying 30.26% of the annual debt service on the County Bonds. Section 2. Calling of the Election. The City Commission hereby calls and directs that a special City election be held in conjunction with the general election on November 8, 2016, for the purpose of voting on the following question: 2 Shall the City Commission of the City of Bozeman, Montana (the “City”), be authorized to levy up to 18.21 mills per year for up to 20 years to raise approximately $1,634,500 per year for the purpose of paying 30.26% of the annual debt service on general obligation bonds of Gallatin County, Montana (the “County”) issued to provide funds to pay the costs of designing, constructing, equipping, and furnishing new law and justice facilities for use by the City and County, authorization for which bonds is sought simultaneously with this mill levy election? If this mill levy proposition is passed, using current assessed values of taxable property in the City, City property taxes on a home in the City valued at $100,000 would increase by approximately $24.58 per year, on a home in the City valued at $200,000 would increase by approximately $49.16 per year, and on a home in the City valued at $240,000 (the median home value in the City) would increase by approximately $58.93 per year. If this mill levy proposition passes and the County bond proposition fails, the City Commission will not proceed with the mill levy. Section 3. Conduct of Election. All qualified electors of the City shall be entitled to vote at the mill levy election. The City Clerk is hereby authorized and directed to give notice of the call and details of this election to the Gallatin County Election Administrator as soon as practicable and in any event on or before the date required by the Gallatin County Election Administrator. The Gallatin County Election Administrator is requested to give notice of the close of registration and thereafter prepare printed lists of the qualified electors in the City entitled to vote in the election in the City and to conduct the election in the form and manner prescribed by law. Section 4. Notice of Election. The City Clerk is hereby authorized and requested to cause notice of the call and holding of the election to be given by publishing notice at least three times no earlier than 40 days and no later than 10 days before the election in the Bozeman Daily Chronicle, a newspaper of general circulation in Gallatin County. The notice of election as published shall read substantially as shown on Exhibit A hereto (which is incorporated by reference and made a part hereof). Section 5. Form of Ballot. The ballot shall be printed in substantially the following form: 3 OFFICIAL BALLOT CITY OF BOZEMAN, MONTANA LAW AND JUSTICE FACILITIES MILL LEVY ELECTION TO BE CONDUCTED ON NOVEMBER 8, 2016 Shall the City Commission of the City of Bozeman, Montana (the “City”), be authorized to levy up to 18.21 mills per year for up to 20 years to raise approximately $1,634,500 per year for the purpose of paying 30.26% of the annual debt service on general obligation bonds of Gallatin County, Montana (the “County”) issued to provide funds to pay the costs of designing, constructing, equipping, and furnishing new law and justice facilities for use by the City and County, authorization for which bonds is sought simultaneously with this mill levy election? If this mill levy proposition is passed, using current assessed values of taxable property in the City, City property taxes on a home in the City valued at $100,000 would increase by approximately $24.58 per year, on a home in the City valued at $200,000 would increase by approximately $49.16 per year, and on a home in the City valued at $240,000 (the median home value in the City) would increase by approximately $58.93 per year. If this mill levy proposition passes and the County bond proposition fails, the City Commission will not proceed with the mill levy. MILL LEVY – YES MILL LEVY – NO 4 6. Notice to County Election Administrator. A copy of this Resolution will be provided to the Gallatin County Election Administrator as soon as possible after its adoption and approval in order to inform the Election Administrator of the details of the special election and the pertinent requests and authorizations as to the conduct of the special election. PASSED by the City Commission of Bozeman, Montana, this 11th day of August, 2016. CITY OF BOZEMAN, MONTANA ____________________________ Carson Taylor, Mayor Attest: ____________________________ Robin Crough, City Clerk (SEAL) Approved as to form: __________________________________ Greg Sullivan, City Attorney A-1 EXHIBIT A NOTICE OF MILL LEVY ELECTION CITY OF BOZEMAN, MONTANA LAW AND JUSTICE FACILITIES November 8, 2016 NOTICE IS HEREBY GIVEN by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), that pursuant to a certain resolution duly adopted at a meeting of the Commission on August 11, 2016, a special city election of the registered voters of the City will be held in conjunction with the general election on November 8, 2016, for the purpose of voting on the following question: Shall the City Commission of the City of Bozeman, Montana (the “City”), be authorized to levy up to 18.21 mills per year for up to 20 years to raise approximately $1,634,500 per year for the purpose of paying 30.26% of the annual debt service on general obligation bonds of Gallatin County, Montana (the “County”) issued to provide funds to pay the costs of designing, constructing, equipping, and furnishing new law and justice facilities for use by the City and County, authorization for which bonds is sought simultaneously with this mill levy election? If this mill levy proposition is passed, using current assessed values of taxable property in the City, City property taxes on a home in the City valued at $100,000 would increase by approximately $24.58 per year, on a home in the City valued at $200,000 would increase by approximately $49.16 per year, and on a home in the City valued at $240,000 (the median home value in the City) would increase by approximately $58.93 per year. If this mill levy proposition passes and the County bond proposition fails, the City Commission will not proceed with the mill levy. The polls will be open between the hours of 7:00 a.m. and 8:00 p.m., and the polling places for the election will be the normal polling places for City residents during a general election. Beginning October 11, 2016, absentee ballots may be obtained at the office of the Gallatin County Election Administrator at Gallatin County Courthouse, 311 West Main, Bozeman, Montana, until 12:00 noon, November 7, 2016. Electors who miss the close of registration deadline may register late at the office of the Gallatin County Election Administrator at Gallatin County Courthouse, 311 West Main, Bozeman, Montana from October 12, 2016 through 12:00 pm (noon) on November 7, 2016, and on November 8, 2016 from 7:00 am through 8:00 pm. DATED this 11th day of August, 2016. /s/Charlotte Mills Gallatin County Election Administrator Publish: October 9, October 16, and October 23, 2016 D.A. Davidson & Co.Aug-16 GALLATIN COUNTY Estimated MILL LEVY IMPACT ANALYSIS GO Bonds - 20 Year Term Mill Levy Computation: conservative rate range County Allocation (69.74%) City Allocation (30.26%) Par Amount:$68,300,000 $47,630,481 $20,669,519 Total Estimated Interest Over Life of Bond (1):$39,730,417 $27,707,993 $12,022,424 EQUALS: Estimated Annual Debt Service $5,401,521 $3,767,021 $1,634,500 DIVIDED BY: FY 2016/17 Mill Value:$250,128.710 $250,128.710 $89,775.320 EQUALS: Estimated Number of Annual Mills Required:21.59 15.06 18.21 Estimated Tax Increase for Individual RESIDENTIAL TAXPAYER: 2016/17 Tax Year 2016/17 Tax Year Estimated Estimated Estimated "MARKET VALUE" of "TAXABLE VALUE" of "ANNUAL""ANNUAL""ANNUAL" Residential Property(2)Residential Property(2) Tax (3)Tax (3)Tax (3) $50,000 $675 $14.58 $10.17 $12.29 $100,000 $1,350 $29.15 $20.33 $24.58 $150,000 $2,025 $43.73 $30.50 $36.87 $200,000 $2,700 $58.31 $40.66 $49.16 $239,768 (City of Bozeman Median)$3,237 $69.90 $48.75 $58.93 $300,000 $4,050 $87.46 $60.99 $73.74 * All property owners (including farming and ranching operations, commercial businesses, home owners etc…) should use the following formula to calculate the estimated tax impact of the Bond issue. Look up the Property's "Taxable Value" from Personal Tax Statement or County Website (http://itax.gallatin.mt.gov/) "Taxable Value" X Mills/1,000 = Estimated Annual Tax Impact of the Bonds (1) Based on estimated true interest cost rates with conservative sample rates for 20-year NOT bank qualified bonds 3.11% and additional premium generated for the Project for costs. (2) Based upon Class 4 residential property. The "Market Valuation" for tax purposes will be different than the valuation of most residential real property for resale purposes. To better calculate the estimated tax impact of the bond issue, property owners should look up their exact taxable value as shown on their personal tax statement and use the formula shown above in grey. According to the 2014 reappraisal by the State Department of Revenue, the median home in Gallatin County was $242,390 and the City of Bozeman was $239,768. (3) Tax Impacts are based on property tax legislation adopted at the 2015 Legislative Session, which implemented the 2014 Department of Revenue reappraisal effective for the 2015/16 and 2016/17 tax years. Tax impact information varies every year depending on such factors as County Mill Value, method of calculating taxable valuation and actual debt service.