Submitted by: Ron Brooks
Submitting Department: Finance
Agenda Section: Action
Item Title:
title
Hyattsville Resolution 2023-03: Authorizing the Issue and Sell of General Obligation Bond Anticipation Notes (INTRODUCTION & ADOPTION)
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Suggested Action:
recommendation
I move that the Mayor and Council introduce and adopt Hyattsville Resolution 2023-03, authorizing the renewal and modification of the City’s General Obligation Public Improvement Bond Anticipation Notes, Series 2022 in the original principal of $11,000,000, prescribing certain terms and conditions for the renewal and modification thereof and other details incident to the renewal and modification of the 2022 BAN; authorizing the delivery of an amended and restated 2022 BAN; authorizing the Treasurer to determine and fix certain terms and details in connection with the renewal and modification of the 2022 BAN through the delivery of the 2023 BAN; confirming the payment of the principal and interest on the BANs from the proceeds of the bonds in anticipation of which the BANS were issued secured by the full faith and credit and unlimited taxing power of the City; providing that the provisions of this resolution shall be liberally construed; and generally relating to the renewal and modification of the 2022 BAN through the delivery of the 2023 BAN (INTRODUCTION AND ADOPTION).
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Summary Background:
In 2019 the City issued bonds in the amount of $12,675,000 to fund improvements to the DPW facility and the renovation of 3505 Hamilton Street to become the new public safety building. Construction of the DPW facility began in late Fall 2019. The 3505 Hamilton Street construction project was anticipated to be solicited in 2020 with work beginning in late 2020. However, due to the COVID-19 pandemic the process to complete the design, review, and permitting for the 3505 Hamilton Street project was significantly delayed.
The project solicitation process began in mid-2021 and was completed in Spring 2022. The Council approved the contract with Whiting-Turner in April 2022 in an amount not to exceed $18.7M. The permits were issued by Prince George's County in early 2022. Unfortunately, the pandemic created significant supply chain delays and delays in production, shipping, and availability of building materials. There was also a shortage of available construction and contractor workforce. These issues among others, resulted 15% to 200% cost increases over pre-pandemic estimates. The pre-pandemic estimates were used when the initial cost and 2019 bond issuance projections were made.
The cost increases resulted in a funding shortfall of $10.6M on the Police & Public Safety Building. To accommodate this gap, we are asking the Council to renew the General Obligation Bonds Anticipation Notes (BANs) in the aggregate principal amount of $11,000,000. Includes interest on the BANs.
Additionally, in an effort to help reduce the costs for this project, the City has been awarded some bond bill funding and will request additional grant dollars in the next round of funding through our State Delegates and the Governor’s capital budget.
Next Steps:
Upon final Council approval to issue BANs bond underwriters will secure funding.
Fiscal Impact:
The City’s Annual Debt Service payments will increase approximately 10.8% a year.
City Administrator Comments:
Recommends approval.
Community Engagement:
N/A
Strategic Goals:
Goal 3 - Promote a Safe and Vibrant Community
Legal Review Required?
Complete