HomeMy WebLinkAboutResolution No. 2010-43Mc city al
KENAI.
CITY OF KENAI
RESOLUTION NO. 2010 -43
Suggested by: Administration
A RESOLUTION OF THE CITY OF KENAI, ALASKA, REQUESTING THE KENAI
PENINSULA BOROUGH TO ALLOCATE S2,500,000 OF ITS RECOVERY ZONE
FACILITY BOND VOLUME CAP TO THE CITY OF KENAI FOR THE ISSUANCE OF
REVENUE BONDS TO FUND THE CONSTRUCTION OF COMMERCIAL HANGARS AT
THE CITY'S AIRPORT.
WHEREAS, the American Recovery and Reinvestment Act of 2009 added 1400U -1
through 1400U -3 to the Internal Revenue Code authorizing state and local
governments to issue up to $15 billion in Recovery Zone Facility Bonds "RZFB and,
WHEREAS, the Internal Revenue Service has allocated RZFBs among the states and
counties and large municipalities; and,
WHEREAS, the Internal Revenue Service by Announcement 50 -2009 has allocated
5 7,315,000 of RZFB volume cap to the Kenai Peninsula Borough (the "Borough and,
WHEREAS, the Internal Revenue Service has determined that counties and large
municipalities to which RZFB volume cap has been allocated may allocate such
volume cap to ultimate beneficiaries in any reasonable manner as they shall determine
in good faith in their discretion; and,
WHEREAS, the City of Kenai (the "City was declared an Economic Recovery Zone by
Resolution 2010 -06 on February 3, 2010 in connection with issuance or Recovery
Zone Economic Development Bonds for expansion of the Kenai Community Library;
and,
WHEREAS, the City is requesting the Borough reallocate $2,500,000 of the Borough's
RZFB volume cap to the City for the City's conduit revenue bond financing of
commercial hangars at the City's Airport (the "Project and,
WHEREAS, it appears that the Project would qualify for financing with RZFBs, and
allocation of 52,500,000 of the Borough's RZFB volume cap to the City for that
purpose would be in the best interest of the City and its residents.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI,
ALASKA, that:
SECTION 1. The City requests the Borough to allocate $2,500,000 of the Borough's
RZFB volume cap to the City of Kenai for the City's conduit revenue bond
financing of the Project.
SECTION 2. The City Manager hereby is authorized, empowered and directed to do all
acts and things and to execute all documents as may be necessary to
carry out and comply with the provisions of this Resolution.
Resolution No. 2010 -43
Page 2 of 2
SECTION 3. This Resolution shall become effective upon adoption.
PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this seventh day of July
2010.
ATTEST:
Carol L. Freas, T ity Clerk
Approved by Finance:
at
PAT PORTER, MAYOR
1 To: Rick Koch, City Manager
if From: Terry Eubank, Finance Director
Date: July 1, 2010
Re: Recovery Zone Facility Bonds Resolution No. 2010 -43
the a of
KENAI, ALASKA
"l/iljag'e with a Past, Gcy with a Future
FINANCE DEPARTMENT
210 Fidalgo Avenue, Kenai, Alaska 99611 -7794
Telephone: 907 283 -7535 ext 221 FAX: 907 283 -3014
As part of the American Recovery and Reinvestment Act (ARRA) the Kenai Peninsula Borough
has been allocated the right to issue up to $7,315,000 of Recovery Zone Facility Bonds. The
entire State of Alaska was allocated $135,000,000. The allocation areas were determined by the
internal Revenue Service. As a jurisdiction within the Kenai Peninsula Borough, the Borough
can allocate all or a portion of its bond allocation to City.
Recovery Zone Economic Facility Bonds allow private entities to borrow at tax exempt rates
utilizing conduit debt programs through public entities. Tax exempt borrowing rates are
expected to reduce the cost of capital by 1.5% to the private entity.
The City has been approached by Global Challenger, LLC who has plans to lease property on the
City's Airport for construction and leasing of commercial hangar space. Global Challenger,
LLC has requested $2,500,000 in conduit financing through the Recovery Zone Facility Bond
Program.
Issuance of conduit debt by the City will not obligate the City for repayment of the debt at any
time. The City simply acts as the vehicle for a borrower to obtain financing at a reduced cost.
Traditionally conduit financing has only been available to not for -profit entities but was
expanded under the ARRA legislation to include private entities.
Global Challenger, LLC has agreed to reimburse the City for all cost associated with the
financing including the cost of the City's bond counsel.
EXHIBIT D
NOTIC m', F INTENT USE
V TENT T US
CS 'VERY 9®N
VOLUME NE
VOLUME CAP
EXHI MT
AIDEA Form N RZF70
TO Y.'E COMPLETED AND DELfVERED ON OR EFORE 11:59 P,M, JUNE 29, 20111
Pursuant to sec. 6(e), ch. 68 SLA 2010 and Section 70 of the Manual of the Alaska Industrial Development and
Export Authority Regarding Recovery Zone Facility Bonds dated June 14, 2010, adopted under 3 AAC 99.907
(the "Manual"), a borough that k an original recipient of Recovery Zone Facility "RZF bond volume cap or a
city within the borough or another eligible issuer that receives RZF bond volume cap from the borough may
preserve RZF bond volume cap from involuntary waiver and loss by delivering written notice to the Alaska
industrial Development and Export Authority "AIDEA on or before 11:59 p.m., Alaska time, on June 29, 2010,
at the address set forth below stating that the borough intends to use the RZF bond volume cap before August 31,
2010.
To: AIDEA, A ttn: Executive Director
813 West Northern Lights !oulevard
Anchorage, AK, 9930E
Or by email to: 12ZFBondsna.aldea.org Or by fax to: 907-771-3044
Recipient (Borough) of Orlglnal Allocation: KENAI PENINSULA BOROUGH
Name of Chief Elected Official; David R. Carey, mayor telephone: 907 -710 -2150
Name of Authorized Representative (if applicable): Fax: 9o7- 714 -23/7
Mailing Address: 146 N. Binklay 52. E-Mail: mayor @boroughh .kenai. ak.us
City: So Ldorna
State: Alaska Zip Code: 99669
Original allocation of RZF bond volume cap to Borough: 7,315,000
If the issuer of the RZF bond volume cap is not the original recipient, attach completed AH:tt(EA's M'Ianuat
Exhibit it (Notice of Waiver of Recovery Zone Facility Bond Volume Cap to a City or Other Eligible
Issuer) and proof of delivery of Manual Exhibit B to AIDEA on or before close of business on June 30,
2010,
Amount of RZF bond volume cap to ay/Web Ibis Notice applies (the "Noticed RZF Bond Volume Cap
2,500,000
AIDEA requests, but does not require, a copy of issuer's bond resolution authorizing issuance of bonds using the
RZF bond volume cap.
The undersigned hereby certifies that (1) he or she is an officer of City of Kenai (the
"Issuer authorized to deliver this Notice and make these certifications on behalf of the issuer; (2) the
issuer Is either the Borough identified above that was the original recipient of the Noticed RZF It: and
Volume Cap or is the recipient by waiver from that Borough of the Noticed RZF Boud Volume Cap; and
(3) the issuer intends to issue bonds using the Noticed RZF Bonds Volume Cap before August 31, 2010.
m.
Dated: r II 2010. ISS
Page 10 of 10
This notice is subject to ratification by the City Counsel,
which is scheduled to meet July 7, 2010.
Dated: i r 2010.
EXHI
LCE F WAIF SE C VERY ZONE
F !ITV 1 N VOLUME CA r TO A CITY
OR T ER ELIGU LE ISSUER
AIDEA Form It RZFSO
TO BE COIMIFLETELD AN DELIVERED TO AIDEA ON OR BEFORE
CLOSE OF BUSINESS ON JUNE 30.291Q
Under federal law, a borough that is an original recipient of Recovery Zone Facility "RZF bond volume cap
may voluntarily waive all or part of its RZF bond volume cap to a city within the borough or to another eligible
issuer for a project located within the borough on any date before close of business on June 30, 2010. Pursuant to
sec. 6(e), ch. 68, SLA 2010 and Section 50 of the Manual of the Alaska Industrial Development and Export
Authority Regarding Recovery Zone Facility Bonds dated June 14, 2010, adopted under 3 AAC 99.907 (the
"Manual the information required by this notice must be given to the Alaska Industrial Development and
Export Authority ("AIDEA").
To: AIDEA, Attn: Executive Director
813 West Northern Lights D oulevard
Anchorage, AK 99503
Or by email to: RZFBonds ra,aldea.org Or by fax to: 907 -771 -3044
YOU ARE HEREBY NOTIFIED that the Kenai Peninsula Borough (the "Borough") HEREBY
WANED 2,500,000 of its RZF bond volume cap to (a) the city of Kenai (the "City or (b)
"Eligible Issuer for a project to be located within the Borough, In connection
with this waiver, the Borough (i) affirms that the RZF bond volume cap is available for this waiver and has not
been otherwise used and (ii) acknowledges that the Borough will no longer be able to use the waived RZF bond
volume cap from and after the date of receipt of this notice by AIDEA. This notice is subject to ratification
by the borough assembly, which is scheduled to meet July 6, 2010.
Borough Authorized R David R. Carey
Title of Authorized P?epresentative° Borough (layer
Mailing Address: Loa N. 6tnkley Street
City: Soldotna, AK 99609
State: Zip Code:
Borough
Te"ephomet (00 7 714 -2150
Fax: C07) 714 -2377
E-Mat mayor@borougn.kenai.ak. us
By: Authori2ed Representajive
*Authorization is subject to ratification
by the Kenai Peninsula Borough Assembly.
If the assembly fails to ratify this action,
the Notice of Waiver shall be null and void.
EXHIBIT Page 8 of 10