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Sales Tax Increment Revenue Bonds_Flood Mitigation Program_$29MMasterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager Dubuque band AI- America City 1 2007 • 2012 • 2013 SUBJECT: Proceeding to set Public Hearing on the Issuance of Not to Exceed $29,000,000 Sales Tax Increment Revenue Bonds (Flood Mitigation Program) DATE: January 28, 2014 Finance Director Kenneth TeKippe, is providing the suggested proceeding to set the date of the public hearing on the proposed issuance of Sales Tax Increment Revenue Bonds prepared by Bond Counsel and to present a resolution for City Council to adopt entitled, "Resolution Fixing Date of a Meeting on the Proposition of the Issuance of Not to Exceed $29,000,000 Sales Tax Increment Revenue Bonds." I concur with the recommendation and respectfully request Mayor and City Council approval. Mic ael C. Van Milligen MCVM:sv Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Kenneth TeKippe, Finance Director THE CITY OF Dui Masterpiece on the Mississippi Dubuque trati M- America City �1111! 2007 • 2012 • 2013 TO: Michael C. Van Milligen, City Manager FROM: Kenneth J. TeKippe, Finance Director DATE: January 28, 2014 SUBJECT: Proceedings to set Public Hearing on the Issuance of Not to Exceed $29,000,000 Sales Tax Increment Revenue Bonds (Flood lvlitigation Program) INTRODUCTION The purpose of this memorandum is to provide the suggested proceedings to set the date of a public hearing on the proposed issuance of Sales Tax Increment Revenue Bonds prepared by our Bond Counsel and to present a resolution for City Council to adopt entitled "Resolution Fixing Date of a Meeting on the Proposition of the Issuance of Not to Exceed $29,000,000 Sales Tax Increment Revenue Bonds." The proceeds of the Bonds will be used to provide funds to pay costs of carrying out the Bee Branch flood mitigation projects as authorized by Section 418.14 of the Code of Iowa. A letter from attorney William Noth detailing information on the bond hearing is enclosed. BACKGROUND The State of Iowa Flood Mitigation Program was created in 2012 establishing a Flood Mitigation Sales Tax Increment Fund. The Sales Tax Increment Fund is to consist of the increase in the state share of the sales tax revenues from communities with qualifying applications. The maximum state share of sales tax increment that can be diverted from the state sales tax general fund and used for flood mitigation projects is $30 million a year. The maximum award for any qualifying single community is $15 million per year. To qualify for sales tax increment funding, federal financial assistance must have been secured for the project. The state sales tax increment cannot exceed 50% of the total project cost, so a local match is required to be pledged in the amount that federal financial assistance fell short of 50% of the total project cost. In April of 2013 the State Flood Mitigation Program Board was established. The State of Iowa Flood Mitigation Program Board approved $98,494,178 in state sales tax increment funding for the Bee Branch Watershed Flood Mitigation Project in December 2013. The Sales Tax Increment Revenue Bonds will allow the City of Dubuque to continue and complete construction on the Bee Branch Creek, replace the flood gates and construct other elements outlined in the Bee Branch Watershed Flood Mitigation Project. The Executive Summary of the Bee Branch Flood Mitigation Project application submitted to the State Flood Mitigation Program Board is attached for more information. This is the first bond of its kind being sold in the Iowa market. Financing for the project was reviewed by the City's financial advisor, PiperJaffray. The City has also selected an underwriter, R.W. Baird. The selected underwriter will be providing suggestions with respect to structure, timing and marketing of the bonds being sold in order to sell the bonds with the best possible structure and at the lowest interest cost. DISCUSSION Notice of this meeting must be published at least once in a legal newspaper, printed wholly in the English language, published at least once weekly, and having general circulation in the City. The date of publication is to be not less than four clear days nor more than twenty days before the date of said public meeting on the issuance of the Bonds. The bonds shall be payable from the City's flood project fund established under Iowa Code Section 418.12, into which there shall be deposited sales tax increment revenues received from the State of Iowa as part of the award to the City under the Flood Mitigation Program, and to the extent necessary and provided for in the resolution authorizing issuance of said Bonds, funds collected by the City from a supplemental levy of debt service taxes. At the public hearing the Council will receive oral or written objections from any resident or property owner of said City to the above action. After all objections have been received and considered, the Council may at this meeting or at any adjournment thereof, take additional action for the issuance of said Sales Tax Increment Revenue Bonds or may abandon the proposal to issue said Bonds. The hearing and appeals therefrom will be held in accordance with and governed by the provisions of Section 384.83 of the Code of Iowa. RECOMMENDATION I respectfully recommend the adoption of the enclosed resolution setting the date of hearing on the Bond proposal. Prepared by: KT/eml Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Jennifer Larson, Budget Director THE CITY OF DUB Masterpiece on the Mississippi Bee Branch Watershed Flood Mitigation Project Executive Summary Imagine: you and your family are waiting out a tornado warning in the safety of your basement when suddenly heavy rains produce flash flooding and floodwaters start pouring in around you. Your choice: do you stay in your flooding basement or go upstairs and risk the tornado? Unfortunately, Bee Branch Watershed residents have been faced with this dire situation repeatedly. The Bee Branch Watershed, which includes Dubuque's most developed areas where over 50% of Dubuque's residents either live or work, is continually hit hard with flash flooding— and it's NOT just a little water in the basement. It's flooding that inundates water heaters, furnaces, and electrical boxes; it rushes down streets from curb to curb -- stalling vehicles, stranding motorists, blowing sewer covers, and ripping up pavement. Six Presidential Disasters directly impacting the watershed have been issued between 1999 and 2011 due to flash flooding, with estimated damages of $69.8 million. The Bee Branch Watershed encompasses historic neighborhoods offering some of the community's most affordable workforce housing. Most residents are working families, many are elderly -- those least able to recover from repetitive flood loss. For over a decade, businesses and homes have suffered losses from water damage and disinvestment. From 2004 to 2009, commercial property values grew by 39% citywide — but fell by 6%in the flood prone area. In response, the City has engaged consultants, state and federal partners, citizen advisory committees, and the general public to help create, fund, and implement a watershed plan to address the flooding. The plan outlines improvements throughout the Bee Branch Watershed, improvements that will benefit upstream as well as downstream properties, a plan consistent with both the Dubuque County Multi- Jurisdictional Hazard Mitigation Plan and the Dubuque County Comprehensive Emergency Management Plan. The Bee Branch Watershed Flood Mitigation Project is a multi - phased, fiscally responsible investment. It reflects a holistic approach to mitigate flooding as it will also improve water quality, stimulate investment, and enhance the quality of life. Having secured the necessary federal and state funding approvals, permits, and funding, Dubuque has pushed forward with planning, execution, and completion of three phases and the initiation of two more. The phases of the Bee Branch Watershed Flood Mitigation Project are as follows: Phase 1 1 1 2 3 4 5 6 7 8 9 10 11 12 Description Carter Road Detention Basin West 32" `' Street Detention Basin Historic Millwork District Lower Bee Branch Creek Restoration Flood Mitigation Gate Replacement Impervious Surface Reduction Upper Bee Branch Creek Restoration 22"`' Street Storm Sewer Improvements Flood Mitigation Maintenance Facility North End Storm Sewer Improvements Water Plant Flood Protection 17th Street Storm Sewer Improvements Status Complete Complete Complete Under Construction Under Design Under Construction Under Design Under Design Under Design Under Design Under Design Under Design Bee Branch Watershed Flood Mitigation Project - Executive Summary Individually, the 12 phases of the project may provide some benefit. But flash flooding can be expected to occur until all of the improvements are implemented. But it is also true that with the completion of each subsequent phase, the threat of flash flood damage is lessened and the resulting damage will be mitigated. Because of the public support for the Bee Branch Watershed Flood Mitigation Project, the stated commitment of the City of Dubuque City Council to implement the various phases of the project, and because the City has already started implementing some of the improvements, non - public investment in the Bee Branch Watershed has already eclipsed $139 million since 2008 with an additional $215 million expected to follow in the next five years for a combined total of $354 million in non - public investment. Implementation of the complete Bee Branch Watershed Flood Mitigation Project is possible only with the requested Sales Tax Increment funding. The City of Dubuque has been fortunate to secure local, state, and federal financial assistance to the extent that the Bee Branch Watershed Flood Mitigation Project is eligible for funding through the State Flood Mitigation Program. The total commitment in the combination of local and federal funding will provide for 51% of the total project cost. The City has secured more than the requisite $30 million in federal financial assistance, with $49 million in financial assistance through the federal Clean Water Act and $1.2 million U.S. Economic Development Administration disaster relief grant, which is a federal program providing assistance specifically for hazard mitigation. And yet, even with the existing outside financial assistance, the cost of implementing all phases of the flood mitigation project is too steep for Dubuque citizens and businesses. Of the more than 30 stormwater utilities across Iowa, Dubuque residents currently pay the second highest rate in the state. And even with the requested Sales Tax increment, a rate increase is necessary. But to construct the Bee Branch Watershed Flood Mitigation Project without the requested Sales Tax Increment, the rate would need to be increased by 248% which would significantly burden Dubuque businesses. The City of Dubuque has carefully developed a fiscally conservative funding plan for the multi - phased project. The City is requesting less than $7 million in sales tax increment in any given year, with an average annual request of less than $5 million. The requested $98 million in Sales Tax Increment over 20 years is less than 59% of the City's projected 70% increment. State Flood Mitigation Board approval of the City of Dubuque's Project by December 31, 2013 is critical. Timely approval will benefit the lives of thousands of watershed residents, businesses and employees, as well as halt the disinvestment occurring in the watershed. If approval is delayed until 2014, however, the projected sales tax increment would be negatively impacted and the City may need to adjust the timing of project phases. The Bee Branch Watershed Flood Mitigation Project will prevent an estimated $582 million in damages over the 100 -year design life of the project, with a return on investment for the State of Iowa of $6.00 for each $1.00 spent! ii AHLERS a COONEY, P.C. 100 COURT AVENUE, SUITE 600 DES MOINES, IOWA 50309 -2231 PHONE: 515- 243 -7611 FAX: 515- 243 -2149 W W W.AHLERSLAW. COM William J. Noth wnoth ©ahlerslaw.com January 28, 2014 Mr. Ken TeKippe Finance Director City of Dubuque 50 West 13th Street Dubuque, Iowa 52001 RE: Not to exceed $29,000,000 Sales Tax Increment Revenue Bonds (Flood Mitigation Program) Dear Mr. TeKippe Direct Dial: (515)246 -0332 We have now prepared and are enclosing herewith suggested proceedings to be acted upon by the Council in fixing the date of a meeting on the proposition to issue the above mentioned Bonds and ordering publication of a notice of hearing consistent with the provisions of Code Sections 418.14 and 384.83. Notice of this meeting must be published at least once in a legal newspaper, printed wholly in the English language, published at least once weekly, and having general circulation in the City. The date of publication is to be not less than four clear days nor more than twenty days before the date of said public meeting on the issuance of the Bonds. In computing time, the date of publication should be excluded. If the last day falls on Sunday, the whole of the following Monday should be excluded. Also enclosed is an extra copy of the proceedings to be filled in as the original and certified back to this office, together with publisher's affidavit of publication of notice of hearing. We are also enclosing an extra copy of the notice of hearing to be delivered to the newspaper for publication purposes. A certificate to attest the proceedings is also enclosed. January 28, 2014 Page 2 Should you have any questions pertaining to these proceedings, please don't hesitate to contact me. Very truly yours, William J. Noth WJN:dc Encl. cc: Barry Lindahl (w /encl.) Jenny Larson (w /encl.) 00994503 -1 \10422 -148 K. 1.i fi (This Notice to be posted) NOTICE AND CALL OF PUBLIC MEETING Governmental Body: The City Council of Dubuque, Iowa. Date of Meeting: February 3 , 2014. Time of Meeting: 6:30 o'clock P .M. Place of Meeting: Historic Federal Building, 350 West 6th Street, Dubuque, Iowa. PUBLIC NOTICE IS HEREBY GIVEN that the above mentioned governmental body will meet at the date, time and place above set out. The tentative agenda for said meeting is as follows: Not to exceed $29,000,000 Sales Tax Increment Revenue Bonds (Flood Mitigation Program) • Resolution fixing date for a meeting on the proposition to issue. Such additional matters as are set forth on the additional 6 page(s) attached hereto. (number) This notice is given at the direction of the Mayor pursuant to Chapter 21, Code of Iowa, and the local rules of said governmental body. City ! lerk, Dubuque, owa February 3, 2014 The City Council of the City of Dubuque, Iowa, met in regualr session, in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the above date. There were present Mayor Roy D.Buol in the chair, and the following named Council Members: Karla Braig, Joyce Connors, Ric Jones, Kevin Lynch, David Resnick, Lynn Sutton Absent: 2 Council Member Lynch introduced the following Resolution entitled "RESOLUTION FIXING DATE FOR A MEETING ON THE PROPOSITION OF THE ISSUANCE OF NOT TO EXCEED $29,000,000 SALES TAX INCREMENT REVENUE BONDS (FLOOD MITIGATION PROGRAM) OF DUBUQUE, IOWA, AND PROVIDING FOR PUBLICATION OF NOTICE THEREOF ", and moved that the same be adopted. Council Member Connors seconded the motion to adopt. The roll was called and the vote was, AYES: Resnick, Sutton, Braig, Buol, Connors, Jones, Lynch NAYS: Whereupon, the Mayor declared the resolution duly adopted as follows: RESOLUTION NO: 27 -14 RESOLUTION FIXING DATE FOR A MEETING ON THE PROPOSITION OF THE ISSUANCE OF NOT TO EXCEED $29,000,000 SALES TAX INCREMENT REVENUE BONDS (FLOOD. MITIGATION PROGRAM) OF DUBUQUE, IOWA, AND PROVIDING FOR PUBLICATION OF NOTICE THEREOF WHEREAS, it is deemed necessary and advisable that the City of Dubuque, Iowa should issue Sales Tax Increment Revenue Bonds to the amount of not to exceed $29,000,000, as authorized by Section 418.14 of the Code of Iowa, for the purpose of providing funds to pay costs of carrying out the flood mitigation projects as hereinafter described; and WHEREAS, Section 418.14 provides that the City Council shall follow the bond authorization procedures set forth in Section 384.83 before issuing Sales Tax Increment Revenue Bonds under that Section, and it is therefore necessary that the action hereinafter described be taken and that the Clerk publish a notice of the proposal and of the time and place of the meeting at which the Council proposes to take action thereon and to receive oral and/or written objections from any resident or property owner �f said City to such action. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: 3 Section 1. This Council shall meet in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at 6:30 o'clock P.M., on the 17th day of February, 2014, for the purpose of taking action on the matter of the issuance of not to exceed $29,000,000 Sales Tax Increment Revenue Bonds (Flood Mitigation Program), the proceeds of which will be used to provide funds to pay costs of the acquisition, construction and installation and equipping of the Bee Branch Watershed Flood Mitigation Project, including those costs associated with the Lower Bee Branch Creek Restoration Project (Phases 4 and 7) and the Bee Branch Flood Control Pumping Station Gates and Replacement Project. Said Bonds shall be payable from the City's flood project fund established under Iowa Code Section 418.12, into which there shall be deposited sales tax increment revenues received from the State of Iowa as part of the award to the City under the Flood Mitigation Program, and to the extent necessary and provided for in the resolution authorizing issuance of said Bonds, funds collected by the City from a supplemental levy of debt service taxes. Section 2. The Clerk is hereby directed to cause at least one publication to be made of a notice of said meeting, in a legal newspaper, printed wholly in the English language, published at least once weekly, and having general circulation in said City, said publication to be not less than four clear days nor more than twenty days before the date of said public meeting on the issuance of said obligations. Section 3. The notice of the proposed action to issue said Sales Tax Increment Revenue Bonds shall be in substantially the following form: 4 NOTICE OF MEETING OF THE COUNCIL OF THE CITY OF DUBUQUE, IOWA, ON THE MATTER OF THE PROPOSED ISSUANCE OF NOT TO EXCEED $29,000,000 SALES TAX INCREMENT REVENUE BONDS (FLOOD MITIGATION PROGRAM) OF SAID CITY, AND THE HEARING ON THE ISSUANCE THEREOF PUBLIC NOTICE is hereby given that the Council of the City of Dubuque, Iowa, will hold a public hearing on the day of , 2014, at o'clock .M., in the Historic Federal Building, 350 West 6th Street, Dubuque, Iowa, at which meeting the Council proposes to take additional action for the issuance of not to exceed $29,000,000 Sales Tax Increment Revenue Bonds (Flood Mitigation Program) in order to provide funds to pay costs of the acquisition, construction and installation and equipping of the Bee Branch Watershed Flood Mitigation Project, including those costs associated with the Lower Bee Branch Creek Restoration Project (Phases 4 and 7) and the Bee Branch Flood Control Pumping Station Gates and Replacement Project. Said Bonds shall be payable from the City's flood project fund established under Iowa Code Section 418.12, into which there shall be deposited sales tax increment revenues received from the State of Iowa as part of the award to the City under the Flood Mitigation Program, and to the extent necessary and provided for in the resolution authorizing issuance of said Bonds, funds collected by the City from a supplemental levy of debt service taxes. At the above meeting the Council shall receive oral or written objections from any resident or property owner of said City to the above action. After all objections have been received and considered, the Council will at this meeting or at any adjournment thereof, take additional action for the issuance of said Sales Tax Increment Revenue Bonds or will abandon the proposal to issue said Bonds. The hearing and appeals therefrom shall be held in accordance with and governed by the provisions of Section 384.83 of the Code of Iowa. This notice is given by order of the Council of Dubuque, Iowa, as provided by Sections 418.14 and 384.83 of the Code of Iowa. Dated this day of , 2014. City Clerk of Dubuque, Iowa (End of Notice) 5 PASSED AND APPROVED this 3rd day of February, 2014. ATTEST: 6 STATE OF IOWA COUNTY OF DUBUQUE CERTIFICATE ) SS CIG -3 I, the undersigned City Clerk of Dubuque, Iowa,, do hereby certify that attached is a true and complete copy of the portion of the corporate records of said Municipality showing proceedings of the Council, and the same is a true and complete copy of the action taken by said Council with respect to said matter at the meeting held on the date indicated in the attachment, which proceedings remain in full force and effect, and have not been amended or rescinded in any way; that meeting and all action thereat was duly and publicly held in accordance with a notice of meeting and tentative agenda, a copy of which was timely served on each member of the Council and posted on a bulletin board or other prominent place easily accessible to the public and clearly designated for that purpose at the principal office of the Council (a copy of the face sheet of said agenda being attached hereto) pursuant to the local rules of the Council and the provisions of Chapter 21, Code of Iowa, upon reasonable advance notice to the public and media at least twenty -four hours prior to the commencement of the meeting as required by said law and with members of the public present in attendance; I further certify that the individuals named therein were on the date thereof duly and lawfully possessed of their respective city offices as indicated therein, that no Council vacancy existed except as may be stated in said proceedings, and that no controversy or litigation is pending, prayed or threatened involving the incorporation, organization, existence or boundaries of the City or the right of the individuals named therein as officers to their respective positions. WITNESS my hand and the seal of said Municipality hereto affixed this 4th day of February, 2014. SEAL 00994495 - 1110422 -148 e. City Cl -rk, Dubuque, Io 7 CERTIFICATE STATE OF IOWA ) SS COUNTY OF DUBUQUE `'' r I° •••, I, the undersigned, do hereby certify that I am now and was at the times hereinafter mentioned, the duly qualified and acting Clerk of the City of Dubuque, in the County of Dubuque, State of Iowa, and that as such Clerk and by full authority from the Council of the City, I have caused a NOTICE OF MEETING OF THE COUNCIL OF THE CITY OF DUBUQUE, IOWA, ON THE MATTER OF THE. PROPOSED ISSUANCE OF NOT TO EXCEED $29,000,000 SALES TAX INCREMENT REVENUE BONDS OF SAID CITY, AND THE HEARING ON THE ISSUANCE THEREOF of which the clipping annexed to the publisher's affidavit hereto attached is in words and figures a correct and complete copy, to be published as required by law in the Telegraph Herald, a legal newspaper published at least once weekly, printed wholly in the English language, published regularly and mailed through the post office of current entry for more than two years and which has had for more than two years a bona fide paid circulation recognized by the postal laws of the United States, and has a general circulation in the City, and that the Notice was published in all of the issues thereof published and circulated on the following date: February 7 , 2014 WITNESS my official signature at Dubuque, Iowa, this 4th day of February ,2014. (SEAL) 00994501 -1 \10422 -148 City Cler; , City of Dubuque, State of Iowa CITY OF DUBUQUE, IOWA OFFICIAL NOTICE NOTICE OF MEETING At the above meeting he :Council shall re- ceive oral or written objections from any resident or property THE CITY of DUBU- owner of said City to QUE, IOWA, ON THE the above action. After MATTER OF THE PRO- all objections have POSED ISSUANCE OF been received and con - NOT TO EXCEED ad, the Council will $29,000,000 SALES will at this meeting or TAX INCREMENT at any adjournment REVENUE BONDS thereof, take ke additional (FLOOD MITIGATION action for the issuance PROGRAM) OF SAID of said Sales Tax Incre- CITY, AND THE HEAR- merit Revenue Bonds ING ON THE ISSU- or will abandon the ANCE THEREOF proposal to issue said PUBLIC NOTICE is Bonds. The hearing and Hereby given that the appeals therefrom Council of he City of shall be held in accord- ance with and gov- ho d apublic hearing erned by the provisions oh the 17th day of Feb- of Section 384.83 of the ruary, 2014, at 6:30 Code of Iowa. o'clock P.M., in the His- This notice is given by torte Federal Building, order of the Council of 350 West 6th Street, Dubuque, Iowa, ec pro - Dubuque, Iowa, at videtl by Sections which meeting the _ 41814 and 384.83 of Council proposes to the Code of Iowa. take additional action Written comments re for the issuance of riot garding the above pub- lic exceed $29,000,000 hearings may be Sales Tax Increment submitted to the City Revenue Bonds (Flood Clerk's Office on or be- Mitigation Program) 'in fore said time of public order to provide funds hearing. At said time to pay costs of the ac and place of public'' quisition, construction hearings all interested and installation and citizens and equipping of the Bee parties' Branch Water�fia + ill be given an oppor Flood Mitigation Proj ra `s actions 1s, ect, including those or against said actions. costs associated with Copies of supporting the Lower Bee Branch documents for the pub- Creek Restoration Proj- lie hearing are on file in ect (Phases 4 and 7) the City Clerk's Office and the iBee Branch and may be viewed Flood Control Pumping during normal working Station Gates and Ite hours. placement Project. Any visual or hearing Said Bonds shalt be impaired persons payable from the City's needing special assts flood project fund es Lance or persons with Codehed under Iowa special accessibility Code Section 418.12, needs should contact into which there snail the City Clerk's Office least 48 hours prior to be deposited sales tax at (563) 589 -4100 or increment revenues re- TTY (563) 690 -6678 at the meeting. ceived from the Staff of Iowa as part of the award to the City un February, 2014. day �, der the Flood Mitiga- Kevin S. Firnstahl: tion Program, and to City Clerk of Dubuque, the extent necessary and provided for in the Iowa resolution ! authorizing issuance of said Bonds, funds collected by the City from a supplemen- tal levy of debt service taxes. STATE OF IOWA {SS: DUBUQUE COUNTY CERTIFICATION OF PUBLICATION I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general circulation published in the City of Dubuque, County of Dubuque and State of Iowa; hereby certify that the attached notice was published in said newspaper on the following dates: February 07, 2014, and for which the charge is $40.61. Subscribed to before me, a Notary Public in and for Dubuque County, Iowa, this 7 day o , 20 s Notary Public in and for Dubuque County, Iowa. MARY K. WESTERMEYER Commission Number 154885 My Comm. Exp. FEB. 1, 2017