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CITY COUNCIL AGENDA ITEM NO. 14



Meeting Date: July 10, 2001

Subject/Title: General Obligation Bond Authorization for Police Station

Submitted by: Dennis Beougher, City Attorney; Pam Ehler, Finance Director 

Approved by: Jon Elam, City Manager


RECOMMENDATION
Staff recommends approval of two actions to seek voter approval of a general obligation bond to construct a new police station as follows: 

(1) Resolution determining that the public interest and necessity demand the acquisition, construction and completion by the City of Brentwood of the following municipal improvement to wit; a new police station, including construction of facilities, works, property or structures necessary or convenient for said municipal improvement for the city of Brentwood; and that the cost of said municipal improvement will require an expenditure greater than the amount allowed therefor by the annual tax levy. 
(2) An ordinance calling and providing for a municipal bond election for the purposes of submitting to the qualified electors of the City of Brentwood the proposition of whether bonded indebtedness of said city should be incurred for the purpose herein set forth; declaring the amount of bonds proposed to be issued and the maximum rate of interest to be paid thereon; making provisions for the levy and collection of taxes; fixing the date of said election and the manner of holding the same and the procedure for voting for or against said proposition; and providing for notice of said election.

BACKGROUND
City Council commissioned a space needs analysis for the City's Police Department. The study concluded that the police department is currently overcrowded and needs more space as soon as possible. The City's Police Department is currently located in two rental buildings separated by a public street that limits its efficiency and function. The most economical means to relieve the current space needs and plan for future growth needs is to construct a new police station. The expected price to build a new police station that meets both the current and future needs of the department is approximately $10 million. The City does not have the funds to construct a building that meets these needs.

PREVIOUS ACTION
A Council Sub Committee has met and approved a recommendation for the City to pursue a $6.0 million general obligation bond issue. The sub committee reviewed a number of alternatives structures. The $6.0 million amount is recommended, as it represents the amount which can be generated based on a level tax of approximately $29, assuming an average price for a new home of $300,000. Debt service on the bonds can escalate based on an average growth rate of 5%. Debt service will be collected on the tax roll, and the mill rate is expected to by $0.097 per thousand dollars of assessed value. The proposition will require a 2/3 affirmative vote at a November 2001 election.

ANALYSIS
The City staff and consultants have reviewed various funding sources to construct the new police station, i.e., certificates of participation, sale lease back/lease back, assessment bonds, tax increment bonds, or special tax bonds. The Council's sub-committee has recommended a general obligation bond. General obligation bonds pledge a city's general fund as security for payment of principal and interest to bond holders who purchase the city's bonds. The general framework for issuing such bonds is the Municipal Improvement Bond Act of 1901. The funds are generated by placing a levy on real property based upon its assessed valuation and collected with a property owners tax bill. A two-thirds voter approval is necessary for the issuance of general obligation bonds and they may be only be used to fund the acquisition or improvement of real property. Constitution art. XIIIA.

In order to proceed the City Council needs to find that the cost of acquisition, construction, and completion of the police station will be too great to be paid out of the ordinary annual income and revenue and the proposed police station will require an expenditure greater than the amount allowed by its annual tax levy and requires the bonded indebtedness. 

An ordinance also needs to be adopted, as attached hereto, to provide for the submittal of a proposition to voters, a declaration of the amount ($35 million) and maximum interest rate (12%) of the bonds to be sold, making provisions for the collection of levy with Contra Costa County officials, and fixing the date and appropriate notice for the vote. 



ORDINANCE NO. ___
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD, STATE OF CALIFORNIA, CALLING AND PROVIDING FOR A MUNICIPAL BOND ELECTION FOR THE PURPOSES OF SUBMITTING TO THE QUALIFIED ELECTORS OF SAID CITY THE PROPOSITION OF WHETHER BONDED INDEBTEDNESS OF SAID CITY SHOULD BE INCURRED FOR THE PURPOSE HEREIN SET FORTH; DECLARING THE AMOUNT OF BONDS PROPOSED TO BE ISSUED AND THE MAXIMUM RATE OF INTEREST TO BE PAID THEREON; MAKING PROVISIONS FOR THE LEVY AND COLLECTION OF TAXES; FIXING THE DATE OF SAID ELECTION AND THE MANNER OF HOLDING THE SAME AND THE PROCEDURE FOR VOTING FOR OR AGAINST SAID PROPOSITION; AND PROVIDING FOR NOTICE OF SAID ELECTION.

WHEREAS, the City Council (the "Council") of the City of Brentwood (the "City"), by resolution duly passed and adopted at a meeting of the Council duly and regularly held, by affirmative vote of more than two-thirds of all its members, did determine that the public interest and necessity demand the acquisition, construction and completion of the municipal improvement hereinafter mentioned; and did further determine that the cost of the acquisition, construction and completion of said municipal improvement will be too great to be paid out of the ordinary annual income and revenue of the City and that said municipal improvement will require an expenditure greater than the amount allowed therefor by the annual tax levy, and will require the incurring of a bonded indebtedness therefor;
NOW, THEREFORE, The City Council of the City of Brentwood does ordain as follows:
Section 1. A municipal bond election (the "Election") be and the same is hereby called to be held throughout the City of Brentwood on November 6, 2001, for the purpose of submitting to the qualified electors of the City the proposition of incurring bonded indebtedness of the City for the purpose and in the amount set forth in the following measure, to wit:
PROPOSITION __:(POLICE STATION) Shall the City of Brentwood be authorized to issue General Obligation Bonds in the amount of six million dollars ($6,000,000) principal amount to finance the construction, acquisition, and improvement of a new Police Station, and all costs incident thereto?

The current estimated cost of the municipal improvement as set forth in said Proposition __ (the “Proposition”) (including legal and all other fees incidental to or connected with the authorization, issuance and sale of the bonds evidencing the indebtedness proposed to be incurred for said municipal improvement and the costs of printing said bonds and all other costs and expenses incidental to or in connection with the authorization, issuance and sale of said bonds) is the sum of $6 million and the amount of the indebtedness proposed to be incurred for said municipal improvements is the sum of $6 million, or such lesser amount as shall be specified in an ordinance amending and supplementing this ordinance should the estimated cost of the municipal improvement decrease.
Section 2. 
(a) The Council does hereby submit the Proposition to the qualified electors of the City at the Election and hereby designates and refers to the Proposition in the form hereinabove set forth as the Proposition to be set forth on the ballots hereinafter prescribed for use at the Election.
(b) The Election shall be held and conducted, and the votes thereof received and canvassed, and the returns thereof made and the result thereof ascertained and determined as herein provided, and in all particulars not prescribed by this ordinance the Election shall be held as nearly as practicable in conformity with the election laws of the State of California providing for the holding of municipal elections. The Council hereby declares that the provisions of Elections Code Section 9285(a) shall apply to the Election called herein. Only qualified voters of the City may vote at the Election.
(c) The City hereby requests the Board of Supervisors of the County of Contra Costa, State of California (the "County") to consolidate the Election with any other election being conducted on the same date in the same territory or any territory which is in part the same. Pending approval of such request, the Election will be consolidated with any election held by the County. In any event, the Election will be held on November 6, 2001, from the hour of 7:00 a.m. to the hour of 8:00 p.m., during which period of time the polls will remain continuously open. At 8:00 p.m. the polls will be closed, except as provided in Section 14401 of the Elections Code, and the officers of the Election shall thereupon proceed to canvass the ballots cast thereat.
(d) The precincts and polling places therein and the election officers appointed to conduct said Election shall be the same as those selected by the County and set forth in the notice of election to be published by the County in [The Contra Costa Times] on or before _____, 2001.
(e) In addition to all other matters required by law to be printed thereon, the ballots to be used at the Election shall state the Proposition set forth in Section 1 hereof.
(f) [Voting machines will be used in the City. To vote in favor of the Proposition hereby submitted and to authorize the incurring of the indebtedness in the Proposition set forth, each elector shall turn down the voting pointer over or next to the word "YES"; and to vote against the Proposition and against the incurring of the indebtedness in the Proposition set forth, each elector shall turn down the voting pointer over or next to the word "NO".] [Note: Appropriate language for City of Brentwood election mechanics to be inserted here].
(g) The City Clerk of the City (the "City Clerk") shall supply, or arrange for the County Clerk of the County to supply, ballots, [voting machines], stationery and all other things necessary for the conduct of the Election to the proper officers of the Election.
(h) The canvass of the Election shall be conducted by the officers of the Election and the return of the Election shall be certified to the Council, each such action to be taken at the time and in the manner provided by law. Thereafter, the Council shall declare the result of said Election at the time and in the manner provided by law.
Section 3. The principal amount of bonds proposed to be issued by the City in the event that the Proposition shall carry by two-thirds of the qualified voters voting on such Proposition at the Election is the sum of $6,000,000, or such lesser amount as shall be specified in an ordinance amending and supplementing this ordinance should the estimated cost of the municipal improvement decrease. Said bonds shall bear interest at the rate of not to exceed 12 percent (12%) per annum. If at the Election two-thirds of the electors of the City voting on the Proposition vote in favor of it, then bonds in an amount not exceeding the amount specified in such Proposition may be issued for the purpose set forth in such Proposition. Provision is hereby made for the payment of the principal of interest on said bonds as follows: For the purpose of paying principal of and interest on the Bonds, the Council shall, at the time of making the general tax levy after incurring the bonded indebtedness, and annually thereafter until the Bonds are paid or until there is a sum in the treasury of the City set apart for that purpose sufficient to meet all payments of principal and interest on the Bonds as they become due, levy and collect a tax sufficient to pay the interest on the Bonds and such part of the principal as will become due before the proceeds of a tax levied at the next general tax levy will be available; provided, however, that if it is expected that all or any part of the Bonds will be sold at such time that the principal of or interest on such Bonds will become due before the proceeds of a tax levied after such sale would be available to pay such principal or interest, the Council, at the time of fixing the annual tax levy, may levy a tax in an amount clearly sufficient to pay that portion of the principal of and interest on the Bonds which it is expected will become due before the proceeds of the next succeeding tax levy will be available. Such taxes shall be levied and collected as other City taxes and shall be in addition to all other taxes and shall be used only for payment of the principal of the Bonds and interest thereon. Said taxes as collected shall be forthwith paid into the fund for which the same were levied and collected and which shall be designated the “City of Brentwood General Obligation Bond Debt Service Fund” (the “Debt Service Fund”), and all sums to become due for the principal of and interest on the Bonds shall be paid from such Debt Service Fund.
Section 4. Notice of the Election shall be given by publication of this ordinance in the following named newspaper, to wit [The Ledgder Dispatch] (which the Council hereby finds and declares to be a newspaper of general circulation published in the City), once a day for seven consecutive days prior to the holding of the Election and the City Clerk is hereby ordered and directed to cause this ordinance to be so published. Such publication shall constitute notice of said Election.
Section 5. Pursuant to Elections Code Section 9280, the City Clerk is hereby directed to transmit a copy of the proposed Proposition __to the City Attorney who shall prepare the impartial analysis of Proposition __ as described in Section 9280. The City Clerk is also directed to cause to be prepared a tax rate statement as required by Elections Code Section 9401, which tax rate statement shall be reviewed by the City Attorney. 
Section 6. This ordinance being an ordinance calling and ordering an Election shall take effect from and after its final passage and approval.
The foregoing ordinance was p Introduced on the 10th day of July, 2001, and was passed and adopted by the City Council of the City of Brentwood, State of California on July 24, 2001, by the following vote:

EXHIBIT A

CITY OF BRENTWOOD
NOTICE OF ELECTION - NOTICE OF PROPOSITION TO BE VOTED ON

Notice is hereby given that the following described Proposition __ is to be voted on at the municipal election to be held in the City of Brentwood, on November 6, 2001, from the hour of 7:00 A.M. to the hour of 8:00 P.M. PROPOSITION __ reads: 
“Shall the City of Brentwood be authorized to issue General Obligation Bonds in the amount of six million dollars ($6,000,000) principal amount to finance the construction, acquisition, and improvement of a new Police Station, and all costs incident thereto?”
The deadline for submission of ballot arguments for or against Proposition __, after which time no arguments for or against Proposition __ may be submitted for printing and distribution to the voters as provided in the California Elections Code, is _______________, at _____ p.m.; proposed arguments should not exceed 300 words and should be submitted in writing at the office of the City Clerk.
Dated: __________, 2001.


City Clerk 
City of Brentwood


CLERK'S CERTIFICATE
I, Karen Diaz, City Clerk of the City of Brentwood, California, do hereby certify as follows:
The foregoing is a full, true and correct copy of an ordinance introduced at a regular meeting of the City Council of the City of Brentwood (the "City Council") duly and regularly held at the meeting place on July 10, 2001 and duly adopted by the City Council, at a regular meeting of said City Council duly and regularly and legally held at the regular meeting place thereof on July 24, 2001, of which meeting all of the members of said City Council had due notice and at which two-thirds thereof was present.
At said meeting said ordinance was introduced by Council Member __________ and read by title only, and was thereupon, upon motion of Council Member __________, seconded by Council Member __________, adopted by the following vote:
AYES: Councilmembers
NOES: 
ABSENT: 

I have carefully compared the same with the original minutes of said meeting on file and of record in my office and said ordinance is a full, true and correct copy of the original ordinance adopted at said meeting and entered in said minutes.
The original ordinance has not been amended, modified or rescinded since the date of its introduction and adoption and the same is now in full force and effect.
Dated: ____, 2001.


Karen Diaz, CMC
City Clerk, City of Brentwood


(SEAL)

RESOLUTION NO. ___
RESOLUTION DETERMINING THAT THE PUBLIC INTEREST AND NECESSITY DEMAND THE ACQUISITION, CONSTRUCTION, AND COMPLETION BY THE CITY OF BRENTWOOD OF THE FOLLOWING MUNICIPAL IMPROVEMENT, TO WIT: A NEW POLICE STATION, INCLUDING CONSTRUCTION OF FACILITIES, WORKS, PROPERTY OR STRUCTURES NECESSARY OR CONVENIENT FOR SAID MUNICIPAL IMPROVEMENT FOR THE CITY OF BRENTWOOD; AND THAT THE COST OF SAID MUNICIPAL IMPROVEMENT WILL REQUIRE AN EXPENDITURE GREATER THAN THE AMOUNT ALLOWED THEREFOR BY THE ANNUAL TAX LEVY.

BE IT RESOLVED by the City Council of the City of Brentwood, as follows:
1. That the public interest and necessity demand the acquisition, construction, and completion by said City of the following municipal improvement, to wit: police station improvements, including construction of facilities, other works, property or structures necessary or convenient for said municipal improvement.
2. That the acquisition, construction and completion of said municipal improvement is necessary and convenient to carry out the objects, purposes and powers of said City.
3. That the cost of the acquisition, construction and completion of said municipal improvement is currently estimated to be $35 million and will be too great to be paid out of the ordinary annual income and revenue of said City, and that said municipal improvement will require an expenditure greater than the amount allowed therefor by the annual tax levy and that said City should incur a bonded indebtedness therefor.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting on the 10th day of July, 2001, by the following vote:
AYES: Councilmembers
NOES: 
ABSENT: 



Michael A. McPoland, Sr.
Mayor

ATTEST:
_______
Karen Diaz, CMC
City Clerk


PROPOSITION __: (Resolution No. ____)

(NEW POLICE STATION)
Shall the City of Brentwood be authorized to issue General Obligation Bonds in the amount of $6 million dollars ($6,000,000) principal amount to finance the construction, acquisition, and improvement of a new Police Station, and all costs incident thereto?

CLERK'S CERTIFICATE
I, Karen Diaz, City Clerk of the City of Brentwood, do hereby certify as follows:
The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a regular meeting of the City Council of said City duly and regularly held at the regular meeting place thereof on the 10th day of July, 2001, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:
AYES: Councilmembers
NOES: 
ABSENT: 
An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.
I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.
Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.
Dated: _____________, 2001.
______________________________
Karen Diaz, CMC
City Clerk
(SEAL)

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