FC071321FINANCE COMMITTEE MEETING
July 13, 2021
Elected Officials Participating Virtually
Councilmember Vivian Olson
Councilmember Diane Buckshnis
CALL TO ORDER
Staff Participating Virtually
Dave Turley, Finance Director
Phil Williams, Public Works Director
Angie Feser, Parks, Rec., Cultural Arts & Human
Services Director
The Edmonds City Council virtual online Finance Committee meeting was called to order at 6:00 p.m.
by Councilmember Buckshnis.
2. COMMITTEE BUSINESS
1. May 2021 Monthly Financial Report
Mr. Turley presented the monthly budgetary financial report five months ended May 31, 2021
• What's happening in the Finance Department?
o Completed the SAO Financial Audit on June 30
o In the interview process for both the Systems Support Technician and the Deputy
Administrative Services Director positions
o First five months have gone according to budget, nothing negative to report. Sales tax and
REET continue to come in ahead of budget
o All governments who apply to GFOA for the GFOA Award Certificate have the same June
30 deadline. The City of Edmonds is the only government in Snohomish County to have
their audit completed in time to meet the June 30 deadline. All others had to file for an
extension.
• Noteworthy things in May report
o REET is up $998,080 from this point in time last year
o Sales tax is up 730,342 from this point in time last year
o Telephone utility tax is down $90,700 from this point in time last year
o Have not yet received the 1st quarter payment from Olympic View for their franchise
payment; received this payment in May of 2020
o Liquor Excise Tax is up $25,216 from this point last year
o Development Services revenues are down $26,062 from this point in time last year
o Plan Checking fees are up $107,685 from this point in time last year
o Parks & Recreation program fees are up $143,681 from this point in time last year
o May 2020 Engineering Overhead was not recorded until June 2020 which is the main
reason for the large difference between years. June 2020 Engineering Overhead totaled
$183,166
Mr. Turley responded to a question about the bond reserve fund.
Action: Consent Agenda
2. Discussion of City Financing Needs
07/13/21 Finance Committee Minutes, Page 2
Scott Bauer, Northwest Municipal Advisors, reviewed:
• Potential 2021 LTGO Bond
1. Provide $4 to $7 million for Civic Park and other capital improvements
2. Refund for savings the Water and Sewer Improvement and Refunding Revenue Bonds,
2011
o $8.045M to be refinanced, representing the callable maturities from 2022 to 2031
o No change in share or final maturity (12/1/2031)
3. Advance refund and restructure a portion of the City's LTGO refunding bonds, 2021 (the
"2012 bonds")
o Portion attributable to the EPFD
■ All outstanding debt to be refunded - $2.585M
o Avoid December 1, 2021 payment
o Extend the final maturity to 2041
■ Allows the PFD to receive the sales and use tax rebate until 2041
■ Lowers annual debt service payments
o Issued as taxable series due to federal tax law
o Unrefunded portion of the 2012 bonds would remain outstanding
• Graph of historical interest rates (Bond buyer 20-Bond General Obligation Index, 1990 to
present and July 2018 to present)
o Interest rates continue near historical low levels
o The charges show an index of 20 long-term, well -rated general obligation bonds
• Citv's Outstandina LTGO Bonds
LTGO Bonds
Par
Outstanding
Callable
Par
Final
Maturity
Coupon
Rate
Call Date
LTGO Ref 2012
$3,895,000
$2,635,000
12/1/2031
1.75%
12/1/2022
LTGO Ref 2016
1,968,013
1,008,918
12/1/2026
1.67%
12/1/2023
LTGO 2019
3,375,000
2,230,000
12/1/2039
2.125-5.00%
6/1/2029
Total LTGO Bonds
Debt
$9,238,013
$5,873,918
Limited Tax General Obliaation Bonds - PFD Portion
PFD
Par
Callable
Final
Coupon
Call Date
Outstanding
Par
Maturity
Rate
LTGO Ref 2012 (PFD
$2,585,000
$1,755,000
12/1/2026
1.75-3.00%
12/1/2022
Portion of 2012 Bonds)
• Outstandina Water and Sewer Revenue Bonds
Water and Sewer Bonds
Par
Outstanding
Callable
Par
Final
Maturity
Coupon Rate
Call Date
WS Improv and Ref Rev
2011
$ 8,705,000
$ 8,045,000
12/1/2031
3.00-4.00%
12/1/2021
WS Rev 2013
13,730,000
13,285,000
12/1/2038
4.00-5.00%
6/1/2023
WS Rev 2015
15,945,000
13,570,000
12/1/2040
2.00-4.00%
6/1/2025
WS Rev 2020
13,875,000
13,875,000
12/1/2045
2.00-2.25%
6/1/2030
Total Water & Sewer
Bonds Debt
$52,255,000
$48,775,000
• New Project Money Debt Service Comparison
o Monthly debt service and totals for $4 and $ 7million in net proceeds amortized over 10
and 20 years
• Considerations and additional items
o Based on the potential projects/refinancings to include in the bond issue, it appears the
bonds would be sold in two series
■ 2021A Tax Exempt: new money proceeds and refunding of the 2011 Water and Sewer
Bonds
■ 2021 B Taxable: Advance refunding of the Edmonds PFD's portion of the City's 2012
LTGO bonds
07/13/21 Finance Committee Minutes, Page 3
The new money and refundings could be structured individually, but would roll up to
their respective series
Costs of issuance
- Shared costs of issuance would be allocated based on size of each financing
- Specific costs, such as refunding trustee or the PFD's financial and legal advisors
(if any) would be allocated to the specific project or series
o Timing
■ Bond issues take about 3 months to complete
■ Starting now would allow us to close a bond issue around October which would
achieve both timing goals
- After September 1 for a current refunding of the City's 2011 Water and Sewer
bonds.
- Before December 1 for the Edmonds PFD to defer their December 1, 2021
payment
o Bank Qualification
■ Issuers who issue less than $10M tax-exempt bonds in a year are eligible to sell those
as "bank -qualified"
- Depending on the term, bank -qualified rates tend to be lower than non -bank
qualified rates
- The PFD portion of the 2021 Bonds, which are expected to be taxable, would not
count toward this limit
■ At between $12 and $15M in tax-exempt proceeds, the 2021A bonds would be non -
bank qualified
■ May be able to break up the issue into a $10 million bank -qualified series and the
balance as a taxable series, if it produces a benefit over an entirely non -bank qualified
bond
- Would need to be done as a negotiated sale for added control
■ Recommendation: Bank qualification need not drive the City's decision on the size of
the new money portion. If we are able to take advantage of bank -qualification, we will.
Questions and discussion followed regarding 2012 bonds originally issued as tax exempt, advantages
of refunding the 2012 bonds, bank qualification, other capital projects that could be funded by $4-7M
in new money, $4M and $7M provided as examples, ARPA money that could be used for
infrastructure, administration's recommendation regarding spending ARPA funds on green
infrastructure projects including a Perrinville Creek project, timing of portions of the Perrinville Creek
project, projects that qualify for ARPA funds, potential land acquisition in east Edmonds, citizens'
interest in financing needs not wants, anticipated future political support for open space purchases but
possibly not for building maintenance, cost of the first portion of the Perrinville project, 10-year versus
20-year bonds, amortizing a larger bond amount over a longer period, revenue source for debt
service, and caution with using REET as a source for debt service due to its volatility.
Suggestions:
• Finance Committee create a list of projects that could be funded by additional $4-7M in bonds
• Research whether ARPA funds would be eligible for the Yost stormwater mitigation project
• Schedule a special Finance Committee meeting to discuss projects for an additional bond
amount and to discuss bonds refunding with the PFD
Finance Committee Recommendations:
Sewer revenue bonds - recommend proceed
Refunding PFD Bonds - recommend proceed
Civic Field - recommend bond for the balance of the cost, need to decide on a dollar amount
and number of years
07/13/21 Finance Committee Minutes, Page 4
Action: Schedule special meeting to discuss projects for an additional bond amount and to discuss
bond refunding with the PFD
3. ADJOURN
The meeting was adjourned at 6:59 p.m.