HomeMy WebLinkAboutResolutions - 2019-15 - 2019-15 Resolution _ Limited Tax General Obligation Bond Authorization - 8/8/2019City of East Wenatchee Resolution 2019-15 Page 1 of 3 Retain Resolution until no longer needed for City-business, then transfer to Washington State Archives (GS50-05A-16 Rev. 1)
City of East Wenatchee, Washington
Resolution No. 2019-15
A Resolution of the City of East Wenatchee, Washington authorizing
the Finance Director to begin the process of securing a limited tax
general obligation bond in an amount not to exceed $5 Million.
1. Alternate format.
1.1. Para leer este documento en otro formato (español, Braille, leer en
voz alta, etc.), póngase en contacto con el vendedor de la ciudad al
alternateformat@east-wenatchee.com, al (509) 884-9515 o al 711
(TTY).
1.2. To read this document in an alternate format (Spanish, Braille, read
aloud, etc.), please contact the City Clerk at alternateformat@east-
wenatchee.com, at (509) 884-9515, or at 711 (TTY).
2. Authority.
2.1. RCW 35A.11.020 and RCW 35A.12.190 authorize the City Council to
organize and regulate its internal affairs and to define the powers,
functions and duties of its officers and employees.
3. Recitals.
3.1. Long-term debt is a commonly used means of financing large capital
assets such as infrastructure, buildings, and large pieces of
equipment. Issuing debt increases the total cost of the asset through
the payment of interest, but it also allows the City to acquire or build
capital assets sooner by borrowing up front for assets that they could
not otherwise fund from existing cash resources.
3.2. A general obligation (GO) debt is secured by the full faith and
credit of the City. The City pledges its tax revenues unconditionally to
pay the interest and principal on the debt as it matures. If the debt is
in the form of a bond, the bond owners have a legal claim on all the
general income of the City if a default occurs. The limitations on
general obligation indebtedness are provided for in chapter 39.36
RCW.
3.3. A limited tax general obligation (LTGO) bond (also called
"councilmanic" bond or non-voted debt), may be issued by a vote of
City of East Wenatchee Resolution 2019-15 Page 2 of 3 Retain Resolution until no longer needed for City-business, then transfer to Washington State Archives (GS50-05A-16 Rev. 1)
the City Council. Because the voters have not been asked to approve a
tax increase to pay for the principal and interest, general fund
revenues must be pledged to pay the debt service on LTGO. LTGO
debt does not provide any additional revenue to fund debt service
payments but must be paid from existing revenue sources.
3.4. According to the Washington Constitution and to state law,
non-voted debt cannot exceed 1.5% of the assessed value of taxable
properties within the City.
3.5. Also, according to state law, the total amount of debt cannot
exceed 2.5% of the assessed value of taxable properties within the
City.
3.6. According to the Douglas County Assessor, the 2019 regular
assessed value of taxable properties within the City is
$1,338,734,494.
3.7. The amount of the City’s current debt is $351,614.83.
3.8. The City has the current capacity to obligate itself to debt in the
amount of $53,114,379 (voted and non-voted debt).
3.9. The City has the current capacity to obligate itself to non-voted
debt in the amount of $19,863,517.
THE CITY COUNCIL OF THE CITY OF EAST WENATCHEE DO RESOLVE
AS FOLLOWS:
4. Authorization. The City Council authorizes the Finance Director to
begin the process of securing a limited tax general obligation bond in an
amount not to exceed $5 Million.
5. Recording. The City Council directs the City Clerk to record the
original, fully executed Interlocal Agreement with the Douglas County
Auditor.
6. Effective date. This Resolution becomes effective immediately.