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Item Coversheet Page 1 of 2 <br /> � <br /> Financial Management <br /> DATE: 6/9/2016 <br /> MEMO: LETTER to the DECATUR CITY COLJNCIL Financial Managment Department 2016-11 <br /> TO: Honorable Mayor Julie Moore Wolfe and City Council <br /> FROM: Tim Gleason,City Manager <br /> Gregg D.Zientara,City Treasurer and Director of Finance <br /> SUBJECT: Resolution Authorizing the City Manager to Enter into a Debt Instrument to Finance Local Street Resurfacing and <br /> Reconstruction <br /> SUMMARY RECOMMENDATION: <br /> It is recommended that the City Council approve the attached resolution, which authorizes the City Manager to enter into a debt <br /> instrument to finance local street resurfacing and reconstruction projects funded by local motor fuel taac revenues. <br /> This resolution will be presented to Council at the June 20�`meeting of the City Council. <br /> BACKGROUND: <br /> The City Council approved Council Ordinance 2016-08 on February 16, 2016 creating a local motor fuel tax effective April 1, <br /> 2016. The taac imposed is 5 cents per gallon of non-diesel fuel and 1 cent per gallon of diesel fuel purchased at retail or at bulk <br /> within the City of Decatur. <br /> The tax collected will be deposited into the City Local Streets and Roads Fund,for use earmarked specifically as defined in City , <br /> Code Chapter 51.4 Paragraph 8. Tax proceeds will be used to pay for the construction and maintenance of municipal streets and ' <br /> extensions, sidewalk repairs and maintenance, curbing, grade extension and approaches, and engineering services related to the <br /> same. <br /> Proposed Investment <br /> Current plans are for investment of$7.5 million,scheduled as follows: <br /> 2016 projects $1.5 million <br /> 2017 projects $3.0 million <br /> 2018 projects $3.0 million <br /> City will enter into a debt instrument,preferably with a local financing institution,to fund the capital cost up to$7.5 million,with <br /> term limit not to exceed nine(9)years,with a not to exceed interest rate of 5.0%,with loan conditions and covenants as necessary <br /> to secure the debt instrument. <br /> Project Funding <br /> The local motor fuel ta�c is expected to generate an annual revenue stream approaching$1.5 million.City intends to allocate up to <br /> $1 million annually for debt service. <br /> POTENTIAL OBJECTIONS: There are no known objections to this resolution. <br /> INPUT FROM OTHER SOURCES: None. <br /> STAFF REFERENCE: Tim Gleason,City Manager Rick Marley,Director of Public Warks Gregg D.Zientara,City Treasurer& <br /> Director of Finance <br /> https://decatur.novusagenda.com/AgendaWeb/CoverSheet.aspx?ItemID=680 6/20/2016 <br />