by Richard Uhlhorn
Dave Trageser, managing director for D.A. Davidson in Seattle, presented the City Council with the types of bonds the City could engage in. Currently, the City is considering bonding a 15 year, $2.5 million bond to partially fund the construction of its proposed Parks Maintenance Building/Public Restrooms project.
Trageser told the Council that a voter bond would require a 60 percent super majority to pass. “A voter bond gives you revenue bonds,” he said.
The types of bonds the City can consider are:
LIMITED TAX GENERAL OBLIGATION BOND (Non-voted)
• Secured by the General Fund/Current Expense Fund. (A Limited Tax General Obligation Bond is also known as “non-voted debt”. Any type of debt that is secured by the General Fund, is counted against the municipality’s “non-voted” Debt Capacity.)
UNLIMITED TAX GENERAL OBLIGATION BOND (Voted)
• Secured by the full faith, credit and taxing power of the municipality with a special excess voter-approved bond levy.
• Revenue bonds are payable from a specific source of revenue from the System operations (i.e., user fees such as Water and Sewer).
LOCAL IMPROVEMENT DISTRICT (“LID”) BOND
• Secured by the property assessments in the LID boundary that are receiving the benefits. The assessments cannot be greater than the improvement value.
SHORT TERM NOTES
• In addition to long-term fixed rate bonds, the City may issue interim financing via shortterm fixed or variable notes.
The City’s income metrics correlates closely to an AA- rating category. “You would get a Double A minus rating,” said Tragerser. This is based on 87% of the state median family income. He also pointed out that bond holders view a concentration of hotels/resorts negatively. However the City’s AV and population growth is comparatively strong and unemployment is not elevated which is favorable for credit.
His presentation also noted that credit analysts are also paying attention to climate change and the threat of wildfires. Also the City’s approach to debt has been conservative.
“The big fear for bond holders is inflation,” stated Trageser.
Trageser gave the Council a schedule of events if they chose to go after a $2.5 million dollar bond for the Parks Maintenance Building.
Action Week 1, D.A. Davidson (the “Underwriter”) would coordinate with City staff on compiling information on the City.
By Week 4, Davidson would release draft Preliminary Official Statement (the “POS”) for review and comments by City staff, administration and council. The bond attorney would send out a draft Bond Resolution for review and comments.
By Week 5 the City, Underwriter & Bond Attorney would provide comments to the draft POS. The City, Underwriter & Bond Attorney provide comments to the draft Bond Resolution.
Week 7 City Council approves the Bond Ordinance.
Week 8 Practice conference call and rating presentation (via conference all) with rating agency.
Week 9 Receive rating, release the POS, and begin marketing the Bonds to prospective investors.
Week 11 Set the final interest rates for the Bonds (based on comparable bond sales, spread to MMD index, market conditions), approve Contract of Purchase.
Week 13 Closing and Delivery of Bond Proceeds.
Grant writer options:
In conjuction with Trageser’s presentation the City has been considering the hiring of, or contracting with a Grant writer to seek grants that would fit the City’s CIP project list.
Annalisa Noble, a funding specialist with T-O Engineers in Spokane was on hand with a special presentation of how her company could help the City formulate a funding strategy for available grants.
Since 2016, Noble has procured $68.5 million in grant and loan funding for a variety of clients. She told the Council that she visited Chelan last month and met with several City directors and said, “So I am a little more familiar with your projects. Everybody needs funding.”
She shared her companies resume and added that it is a challenge to putting together a funding strategy. “I can help you guys prioritize which projects would be most likely to get,” said Noble.
There is generally a lot of red tape with grants and Noble stated she could also help figure out what is best for the community. ‘There is a lot of funding around and I can help you navigate that… help write proposals and help with the paperwork,” stated Noble.
Erin McCardle told Noble that, “we don’t know what to ask.” McCardle added that in her opinion that without a financial strategy, grant writing is the last step. “We don’t ever know what to write for.”
Mayor Goedde, who took a special class at Wenatchee Valley College on grant writing stated that composition was as important as being an idea man. “It never ceases to amaze me how much money is out there.”
It was brought up that million dollar grants came with a lot of requirements including matches by the receiving party. “A part of my job is to find out all the requirements of a grant,” Noble said.
Peter Jamtgaard asked how much time it takes to do a grant. Noble replied that it depends on the specific grant. “I prefer to do smaller grants at the local level,” said Noble. “In general they take about a month,” she added.
The process according to Noble is to match up funding for specific projects. “We can set it up anyway you guys want,” she said.
McCardle was concerned about the impact on staff and Goedde asked if the City should go after projects it wants or projects the City really needs. Jamtgaard was also interested in the cost of grant management.
City Administrator Wade Ferris told the Council that they could bring forward proposals they would like to see.
T-O Funding Services Available
• Assist with project development, funding research, eligibility, and best fit for funding
• Develop funding matrix, funding strategies, and provide professional recommendations • Assist with funding guidance, structure, collaboration, coordination, and communication
• Assist in writing, reviewing, editing, and submitting funding proposals
• Assist through funding award, funding administration process, and staff support for grant and loan administration Chelan Priority Projects / Funding Strategies • Water Line Extension to Chelan Airport; Affordable Housing Water/Sewer Project
Potential Funding Sources: IACC, FAA, PWB, CERB, USDA RD, ECY, DWSRF, CDBG, State Appropriations, BIL, ARPA
• Transportation Projects:
Woodin Bridge project
Pedestrian Pathway for new development (by Walmart)
2 Roundabouts (Sounder/Woodin, Saunders/Johnson)
Traffic Study / Planning, Street Maintenance
Potential Funding Sources: IACC, PWB, CERB, CDTC, TIB, WSDOT Local Programs, SRTS, PBP, DOT Federal Funding, BIL, State Appropriations, TBD, REET
• Parks and Recreation Projects:
Golf Course Irrigation System Rehabilitation
Park improvements, Skate Park, Parks Dept. Maintenance Building, Marina Upgrades Potential Funding Sources: CERB, RCO, USDA RD, State Appropriations, Dept. of Commerce, REET