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Home My WebLink AboutCity Council Meeting - City Council Workshop - 02/06/2024 (2) Approved City Council Workshop • Workshop Regular Meeting KENT Minutes WAS M IN G 7 0 N February 6, 2024 Date: February 6, 2024 Time: 5:44 p.m. Place: Chambers I. CALL TO ORDER Council President Boyce called the meeting to order. Attendee Name Title Status Arrived Bill Boyce Council President Present John Boyd Councilmember Present Brenda Fincher Councilmember Present Satwinder Kaur Councilmember Present Marli Larimer Councilmember Present Zandria Michaud Councilmember Present Toni Troutner Councilmember Present II. PRESENTATIONS 1 Kent East Hill Operations Center Julie Parascondola 30 MIN. Paula Painter Finance Director Paula Painter presented an overview Funding the Kent East Hill Operations Center Project that included $24.5 Million that is included in the 2023-2024 adopted budget. Painter reviewed the presentation provided to the Operations and Public Safety Committee on May 16, 2023, including: Current state of maintenance shop/KEHOC site History of the KEHOC project Current project design Options for financing, including the addition of an additional estimated $25 million for the project The bid for the General Contractor went out on January 31, 2024, with bids due February 27, 2024. The current estimated costs just over $50 million Painter reviewed all funding sources, 2024 estimated fund balances and required fund balances. Painter indicated debt issuance is an option: Issue debt for all or portion of the project for 20 or 30 years. Reviewed bond ratings City Council Workshop Workshop Regular February 6, 2024 Meeting Kent, Washington Minutes ......................................................................................................................................................................................................................................................................................................._............................................................................................................................................................................................................... • Interest rates declined • Federal Reserve likely to reduce rates in 2024 Bond reimbursement for project expenditures - depends on timing of bond issue Painter walked the Council through the funding options, including use of fund balance and issuance of debt. Painter advised the next steps include: Bid Award likely to Council in March 2024 Finalize funding plan including partial use of: o Current project budget o Fund balance o Debt issuance (no more than $25 million) Determine timing of bond issue Create reimbursement resolution if applicable Painter provided details on the total that would be paid over the life of both 20- and 30-year bonds. Meeting ended at 5:57 p.m. Kiv�Loy A. Kotmotcr City Clerk ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Page 2 of 2 YY r. . � llr6 wry.'"i ._--`.. �.. �. Fi � • � �p -. - ' - r` - 71KENT P Kent East - y, L. r ' r V Operations nterF_ I OC)EH Fu idate a u Council Workshop - = February 6, 2024 AP i V b Recap and Current Status Recap and current status of project funding. Funding Options Including use of fund balance and issuance of debt. AGENDA 0 Fund Balance and Debt Service Current funds available to cover project costs and cost of ongoing debt payments. Next Steps What to expect next. KENT EAST HILL OPERATIONS CENTER WARMOUSE/ADMN BUff-DING • 2023-2024 Adopted Budget • $24.5 Million for IEHOC project • Operations and Public Safety Committee — May 16, 2023 • Current State of Maintenance Shop/IEIOC Site • 14istory of the IEHOC Project • Current Project Design • Options for Financing • Including the addition of an additional estimated $25 million for the project • General Contractor - Out to Bid — January 31 , 2024 • Bids Due: February 27, 2024 • Current estimated costs just over $50 million KENT EAST HILL OPERATIONS CENTER WARMOUSE/ADMN BUff-DING • Adopted Project Budget - $24. 5 million Fund Balance 2024 Estimated 2024 Required Beginning Fund Fund Balance Funding Source Current Fund Balance Criminal Justice Fund 2,000,000 Criminal Justice Fund 10,124,000 2,071 ,000 Capital Resource Fund 7,773,060 Capital Resource Fund 19,119,000 1 ,500,000 Parks Capital Resource Fund 3,276,920 Parks Capital Resource Fund 8,198,000 500,000 Water Fund 4,028,460 Water Fund 20,046,000 6,615,000 Sewer Fund 2,638,460 Sewer Fund* 5,542,000 8,148,000 Drainage Fund 4,783,100 Drainage Fund 15,971 ,000 5,638,000 24,500,000 79,000,000 24,472,000 • Debt Issuance *Sewer Fund required fund balance includes pass-through amount to King • Issue debt for: County. If excluded required fund balance would be $2.9 million. • All or a portion of the project costs • 20 or 30 years • Bond Ratings • Moody's AA2 • Standard &Poors AA+ • Interest rates declined about 80 basis points since November • Federal Reserve likely to reduce rates in 2024 • Bond reimbursement for project expenditures 0 Depends on timing of bond issue IENT EAST HILL OPERATIONS CENTER WiMUHOUSE/ADMN BUff-DING Project Budget and Funding Sources — Current and Modified Funding Source Current Estimated Criminal Justice Fund 2,000,000 2,000,000 Capital Resource Fund 7,773,060 11 ,236,200 Parks Capital Resource Fund 3,276,920 4,437,700 Water Fund 4,028,460 12,090,600 Sewer Fund 2,638,460 6,247,400 Drainage Fund 4,783,100 8,707,900 ARPA - 5,420,300 24,500,000 50,140,100 KENT EAST HILL OPERATIONS CENTER WARMOUSIE/ADMN B=ING Estimated Debt Service $25m $25m $50m 20-years 30-years 30-years Fund Capital Resource Fund 407,000 314,000 624,000 Parks Capital Resource Fund 137,000 105,000 209,000 Water Fund 682,000 526,000 1 ,044,000 Sewer Fund 317,000 245,000 486,000 Drainage Fund 372,000 287,000 570,000 Annual Payment 1,915,000 1,477,000 2,933,000 KENT EAST HILL OPERATIONS CENTER NFXr STIEPS • Bid Award (likely to Council March 2024) • Finalize Funding Plan including partial use of: • Current Project Budget • Fund Balance • Debt Issuance (no more than $25 million) • Determine timing of bond issue • Create reimbursement resolution (if applicable)