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Label:
Ordinance
Authorize revenue bonds to provide not more than $53,430,000 to finance Veterans Memorial Coliseum projects
Passed
The City of Portland ordains:
Section 1. The Council finds:
- The City is authorized to issue revenue bonds for a public purpose under ORS 287A.150 (the “Act”). Revenue bonds issued under the Act may be payable from all or any portion of the “revenue” of the City, as defined in ORS 287A.001(17). ORS 287A.001(17) defines “revenue” to mean all fees, tolls, excise taxes, assessments, property taxes and other taxes, rates, charges, rentals and other income or receipts derived by a public body or to which a public body is entitled. The City is also authorized to issue revenue bonds to refund revenue bonds pursuant to ORS 287A.360 to 287A.375.
- The City may authorize revenue bonds under the Act by nonemergency ordinance. The City may not sell the revenue bonds under the Act until the period for referral of the nonemergency ordinance authorizing the revenue bonds has expired. If a nonemergency ordinance authorizing the revenue bonds is referred, the City may not sell the revenue bonds unless the voters approve the revenue bonds.
- The City has identified a need to make certain improvements to the Veterans Memorial Coliseum, including electrical and plumbing upgrades, improvements to seating areas, concourse, and restrooms, code compliance and safety improvements and upgrades, scoreboard and audio system replacement, meeting room, seismic and additional improvements and enhancements (the “Projects”) and has determined that there is a need for revenue bonds in an amount sufficient to provide not more than $53.43 million to finance the Projects plus additional amounts sufficient to pay costs related to the bonds, and that the Projects are public purposes.
NOW, THEREFORE, the Council directs:
- Revenue Bonds Authorized. The City hereby authorizes the issuance of revenue bonds pursuant to the Act in an amount sufficient to provide not more than $53.43 million for costs related to the Projects, plus additional amounts sufficient to pay capitalized interest, accrued interest on any interim financing and estimated costs related to the revenue bonds authorized by this Section 1.a. The principal amount of revenue bonds to be sold pursuant to this Section 1. is estimated not to exceed $54.3 million.
- Refunding Bonds Authorized. If all or any portion of the revenue bonds authorized by Section 1.a are issued to provide interim financing for the Projects, the City may issue revenue bonds to refund those interim financing bonds and pay associated costs pursuant to ORS 287A.360 to 287A.375. The revenue bonds that are authorized by this Section 1.b may be issued in amounts that are sufficient to refund any interim financing that is obtained under Section 1.a, plus additional amounts sufficient to pay the estimated costs related to issuing the refunding bonds authorized by this Section 1.b.
- Security and Use of Bond Proceeds. The revenue bonds authorized by Sections 1.a and 1.b of this Ordinance (the “Bonds”) shall be secured by the full faith and credit and available general funds of the City. Proceeds of the Bonds may be spent only to pay costs related to the Projects and costs related to issuing, paying and refunding the Bonds.
- No Additional Taxes Authorized. No Bonds shall be general obligations of the City and neither the authorization nor the issuance of any Bonds shall authorize the City to levy any additional taxes.
- Procedure. No Bonds may be sold and no purchase agreement for any Bonds may be executed until the period of referral of this nonemergency ordinance has expired and this ordinance takes effect. If this ordinance is referred, the City may not sell the Bonds unless the voters approve this ordinance.
- Delegation. After this ordinance takes effect the City’s Chief Financial Officer and the Director of the Bureau of Revenue and Financial Services, City Treasurer, Debt Manager, or the person designated by the Chief Administrative Officer of the Office of Management and Finance to act as Debt Manager under this Ordinance (any of whom is referred to in this ordinance as a “Debt Manager”) may, on behalf of the City and without further action of the Council:
- Issue the Bonds in one or more series, which may be sold at different times and in combination with other series of revenue bonds authorized by the Council.
- Issue one or more series of the Bonds to provide interim financing for the Projects, enter into lines of credit or similar documents which permit the City to draw Bond proceeds over time, and issue short or long term Bonds to refund the Bonds that provide interim financing for the Projects.
- Issue one or more series of the Bonds to provide long term financing for the Projects.
- Participate in the preparation of, authorize the distribution of, and deem final preliminary and final official statements or other disclosure documents for each series of the Bonds.
- Subject to the limits in this ordinance, establish the final principal amounts, maturity schedules, interest rates, sale prices, redemption terms, payment terms and dates, record dates and other terms for each series of the Bonds, and either publish a notice of sale, receive bids and award the sale of each series to the bidder complying with the notice and offering the most favorable terms to the City, or select one or more underwriters or lenders and negotiate the sale of any series with those underwriters or lenders.
- Undertake to provide continuing disclosure for any series of the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission.
- Finalize the terms of, execute, and deliver bond declarations or other documents that describe the terms of each series of the Bonds. The bond declarations or other documents may also contain covenants for the benefit of the owners and any credit enhancement providers.
- Appoint and enter into agreements with service providers for the Bonds.
- Issue any qualifying series of Bonds as “tax-exempt bonds” bearing interest that is excludable from gross income under the Internal Revenue Code of 1986, as amended, (the “Code”) and enter into covenants for the benefit of the owners of those series to maintain the excludability of interest on those series from gross income under the Code.
- Issue any qualifying series of Bonds as “tax credit bonds,” “federal subsidy bonds” or other obligations that are eligible for federal tax credits, federal interest rate subsidies or other federal benefits, and enter into any covenants and take any actions that are required to qualify for those federal benefits.
- Issue any series of Bonds as “taxable bonds” bearing interest that is includable in gross income under the Code.
- Apply for and purchase municipal bond insurance or obtain other forms of credit enhancement for any series of Bonds, enter into agreements with the providers of credit enhancement, and execute and deliver related documents.
- Execute any documents and take any other action in connection with the Bonds that the Debt Manager finds will be advantageous to the City.
Official record (Efiles)
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed by Council
Auditor of the City of Portland
Simone Rede
Impact Statement
Purpose of proposed legislation and background information
The proposed legislation authorizes the issuance of revenue bonds in an amount sufficient to provide not more than $53.43 million to finance improvements to the Veterans Memorial Coliseum plus additional amounts sufficient to pay costs related to the bonds (the “VMC Bonds”). Improvements to be financed with proceeds of the VMC Bonds include electrical and plumbing upgrades, improvements to seating areas, concourse, and restrooms, code compliance and safety improvements and upgrades, scoreboard and audio system replacement, meeting room, seismic and additional improvements and enhancements (the “Projects”).
The Bonds will be issued under terms of the Visitor Facilities Intergovernmental Agreement (the “VFIGA”), an intergovernmental agreement among the City, Multnomah County, Metro, and tourist industry representatives. The VFIGA provides for the collection of a 2.5% surcharge on transient rentals and vehicle rentals (the “Surcharge Revenues”). The Surcharge Revenues and earnings thereon, less Multnomah County’s costs of collection and administration, are collected by Multnomah County and deposited into the Visitors Facilities Trust Account (“VFTA”) held by Multnomah County. The VFIGA provides that these Surcharge Revenues may be used to repay certain bonds issued to finance improvements to visitor facilities.
The VFIGA has provided for City bonds issued for the expansion of the Convention Center, improvements to the Portland Center for the Performing Arts, and Civic Stadium (now Providence Park). The most recent amendment, the Second Amended and Restated VFIGA (the “Second Amendment”), includes provisions for the issuance of additional City bonds to support renovation projects at the Veterans Memorial Coliseum and the Portland’5 Centers for the Arts.
Currently, the City’s bonds issued for the Convention Center and Metro’s bonds issued for the Oregon Convention Center Hotel Project remain outstanding and receive disbursements from the VFTA at a priority above of the proposed VMC Bonds.
As discussed in the VFIGA, the City has agreed to limit the interest cost to the VFTA by securing the VMC Bonds with the City’s full faith and credit (all legally available resources, including the City’s General Fund); however, the VMC Bonds will be paid from the Surcharge Revenues. The borrowing is being done in conformance with debt limitations established in the City’s Debt Management Policy (FIN 2.12). The proposed financing is considered self-supporting indebtedness (i.e., paid by non-General Fund resources) under the City’s Debt Management Policy. The VMC Bonds are expected to be sold via competitive sale in March 2024.
Financial and budgetary impacts
The VFIGA includes a formula for the amount of VMC Bonds that may be issued for the Projects and paid with the Surcharge Revenues. For FY 2023-24, that amount approximately $53.43 million. The VFIGA allows for additional amounts for bond issuance and financing costs.
The Bonds are planned to be issued with a 20-year amortization schedule. Debt service is expected to be approximately level annual debt service, however is subject to change based on the financing goals. Based on current market conditions, annual debt service on the Bonds is estimated at $4.65 million, which is expected to be paid from Surcharge Revenues. The City will request to Multnomah County the transfers from the VFTA as needed to pay debt service. If the fund balance of the VFTA is insufficient to make 100% of debt service requirements of the VMC Bonds, the City will be required to pay any such deficiency from any legally available funds of the City.
Community impacts and community involvement
This is an administrative action taken to authorize the issuance of the Bonds, the proceeds of which will be used to finance the Projects. There is no community impact or involvement anticipated.
100% renewable goal
Not applicable.
Financial and budget analysis
Analysis provided by City Budget Office
This ordinance authorizes the issuance of Revenue Bonds, which would be backed by revenues within the Visitor’s Facility Trust Fund (managed by Multnomah County). The fund generates $22 million in revenue annually, which should cover the annual debt service costs of these additional bonds. Should annual revenue be insufficient, there exists $19 million in reserves within the Spectator Facilities Fund managed by the City of Portland—further mitigating the exposure to the City’s General Fund should annual revenue be insufficient to cover the cost of the $4.65 million annual payments 2025 through 2035.