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Item No. 13 memo�andum TO: Mayor & City Council FROM: John Godwin, City Manager SUBJECT: BOND ELECTION DATE: February 5, 2013 BACKGROLTND: Concurrent with discussions and work on developing a ten-year capital improvements program (CIP), we have discussed the need to conduct a bond election in 2013 to approve up to $50 million in general obligation bonds. Such elections may occur on one of two state-mandated uniform election dates — Saturday, May 11 or Tuesday, November 5. At the January 28 council meeting we discussed three separate bond propositions, for streets, drainage, and utilities system improvements. The council instructed the staff to proceed with preparing final proposition and bond language for a May 11 election, with the goal to formally call the special election on February 11. STATUS OF ISSUE: Since the January meeting, we have discussed the desirability of making the bond election as easy to understand as possible, while also ensuring there is no need to increase any rates, fees, or taxes to fund the new debt. As a result, we are recommending only one bond proposition, which would allocate funds to replace water and sewer lines, and to repair and replace roads damaged by that construction. Second, we are proposing reducing the amount of the requested bonds from $50 million down to $45 million. Based on retirement of old bonds in 2011 and 2012, plus bonds that will be retired in 2014 and 2020, this is the amount of bonds that can be sold with no rate increases, now or in the future. Finally, we have tried to make the ballot language a bit simpler by not only reducing the number of propositions, but by changing the language to describe water and sewer lines instead of "waterworks" improvements, which can include a lot of different things we are not interested in. We also added language to the election resolution to indicate no need or desire to increase any fees or rates. BUDGET: Repayment of the bonds will depend on when they are actually sold. We would likely sell approximately half in 2013 and the other half three to four years later. RECOMMENDATION: Call special election for May 11, and authorize submittal of all appropriate ballot language.