Res 99-298
RESOLUTION NO. 99-298
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
FEDERAL WAY, WASHINGTON, PROVIDING FOR THE
METHOD FOR EARLY REDEMPTION OF THE BONDS
FUNDED BY THE UTILITIES TAX.
WHEREAS, on December 19,1995 the Federal City Council passed Ordinance No.
95-257 providing for a 1.37% tax upon the privilege of conducting an electrical energy, natural gas,
storm drainage, garbage, cable television, cellular and other telephone and wireless communications
services business for the purpose of construction and maintenance of certain streets and
transportation improvements; and
WHEREAS, on December 3, 1996 the Federal City Council passed Ordinance No.
96-276 providing for a 3.63% increase of the utility tax, which totaled a 5% utility tax; and
WHEREAS, the Federal City Council directed City staff to apply a portion of the
revenues for the bonds authorized pursuant to Ordinance No. 97-292; and
WHEREAS, the City may redeem the bonds plus accrued interest before their
maturity on or after June 1, 2007; and
WHEREAS, the revenues generated by the utility tax have exceeded the amounts
necessary for the payment on the bonds in the amount of$1.45 million; and
WHEREAS, it is projected that $425 thousand excess will be collected in the future
years provided that the utility tax remains at the 5% level; and
Res. #.2!h29#age I
ORIGINAL
WHEREAS, the City deems it advisable and in the best interest of the public to provide a
mechanism for retiring the bonds before their maturity date, and thereby, reducing the total amount
of interest paid on the debt;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY
HEREBY RESOLVES AS FOLLOWS:
Section I. Any monies collected nom utilities taxes, which exceed the necessary
amounts for payments of bonds and the maintenance and operation of capital projects designated in
Exhibit "A" attached hereto and incorporated herein by this reference, shall remain in the Utility Tax
Fund for the purpose of redeeming said bonds.
Section 2. Severabilitv. If any section, sentence, clause or phrase of this resolution
should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity
or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence,
clause or phrase of this resolution.
Section 3. Ratification. Any act consistent with the authority and prior to the
effective date of the resolution is hereby ratified and affirmed.
Section 4. Effective Date. This resolution shall be effective immediately upon
passage by the Federal Way City Council.
RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY,
WASHINGTON, this 18th day of May
,19~.
CITY OF FEDERAL WAY
4~
MA ÝOR, RON GINTZ
Res. ~ Page 2
ATTEST:
APPROVED AS TO FORM:
~O:DI K. L~D~L
FILED WITH THE CITY CLERK: 5/17/99
PASSED BY THE CITY COUNCIL: 5/18/99
RESOLUTION NO. 99-298
k:\resolutilit.exc
Res. # 99-29Bage 3
EXHIBIT "A"
ADOPTED 1997 COMMUNITY INVESTMENT PROGRAM
Utility Tax (1) Other Sources Total Available as % of UT Tax
M&O CçitaL(2) M&O Capital M&O Cçital M&O Capital
1, 1995/1996 STREETS BOND
Street & Transportation - 7,500 - - - 7,500 0.00% 1.30%
M&O 41 - - - 41 - 0.05% 0.00%
1995/96 Bonds Subtotal 41 7,500 - - 41 7,500 0.05% 1.30%
1.35%
2A 1997 CIP
Public Safety (3) - 3,000 68 1,500 68 4.500 0.00% 0.36%
Sports Fields (4) 50 7,185 150 350 200 7,535 0.06% 1.21%
Civic Theater (5) 100 1,550 50 520 150 2,070 0.13% 0.26%
Downtown (6) 106 1,900 - 500 106 2,400 0.13% 0.32%
North Entry to Sports Fields - 290 - 500 - 790 0.00% 0.05%
Downtown ~6) - 725 - - - 725 0.00% 0.12%
New Facility Subtotal 256 14,650 268 3,370 524 18,020 0.32% 2.31%
2B ASPHALT OVERLAYS
Base Level - - 740 - 740 - 0.00% 0.00%
1997 & 1998, each year - - 200 - 200 - 0.00% 0.00%
1997 Utility Tax 800 - - - 800 - 1.01% 0.00%
Over1~ Subtotal 800 - 940 - 1,740 - 1.01% 0.00%
Subtotal 1997 Programs 1,056 14,650 1,208 3,370 2,264 18,020 1.34% 2.31%
L 3.65%
Grand Total 1,097 22,150 1,208 3,370 2,304 25,520 1.39%1 3.61%
5.00%
Notes and Assumptions:
1) 1% in utility tax is estimated to generate $790,000 per year.
2) The final borrowing rate was 5.4% with $132,500 per $1 million In annual debt service payment. This Is slightly
below the $135,000 or $140,000 per million used In March and Januray respectively.
3) $1.5 million other sources in Public Safety Building represnts present value of lease payment included in the departmenfs
operating budget. This portion of the bond will be financed over a 15 year period callable after the 9th year.
4) Sports fields maintenance and operations estimate is based on actual experience from Saghalie Park, In 1997 dollars.
5) The recommended utility tax support of civic theater operation will be capped at $100,000 per year.
6) Annual M & 0 for downtown is based on the assumption of $50,000 for beautification projects and $56,000 for new street lights.
k:Vinancelcounci~ FCL TY97B.xLS finales! 5/6/97 2:50 PM