Board of Trustees - Roads Workshop

AGENDA Village of Dundee Board of Trustees - Special Meeting Tuesday, April 2, 2024 A meeting of the Board of Trustees - Special Meeting will be held Tuesday, April 2, 2024 in the Council Chambers at 6:00 PM. 1. CALL TO ORDER 2. ROLL CALL 3. PLEDGE OF ALLEGIANCE 4. APPROVAL OF AGENDA 5. CITIZEN’S COMMENTS (PLEASE LIMIT YOUR COMMENTS TO 4 MINUTES PER PERSON) 6. UNIFINISHED BUSINESS 7. NEW BUSINESS 7.a Discussion on Long Term Road & Infrastructure Financing Options Funding Options Village of Dundee April 2024 Village of Dundee_Road Bond Presentation 20240116_PEC Dunham Neighborhood Total 20240116_PEC Toledo Neighborhood Total 8. CLOSED SESSION 9. ADJOURNMENT Please Note – The Village of Dundee is subject to the requirements of the Americans with Disabilities Act of 1990. Individuals with disabilities who plan to attend this meeting and who require certain accommodations, in order to allow them to observe and/or participate in this meeting, or who have questions regarding the accessibility of this meeting or the facilities, are requested to contact the Village Manager, at 734-529-3430 or manager@villageofdundee.net to allow the Village to make reasonable accommodations for those persons. Public comment can be made through the Public Comment Form located at https://dundeevillage.civicweb.net/Portal/CitizenEngagement.aspx Page 1 of 21 Page 2 of 21  Agenda Item #7.a Village of Dundee Overview of Road & Infrastructure Financing Options April 2, 2024 Page 3 of 21 © PFM 1  Agenda Item #7.a Possible Capital Funding Sources for Road Bonds  General operating or other general revenue • Funds generated by the municipality’s general operating levy (Authorized for maximum 12.5 mills, currently levying 6.9221) • Fund equity or reserves  Special Millages • Dedicated road millage (Village levied 4.4593 mills for roads in 2023, as a part of its Charter operating millage) • Unlimited tax millage (project specific vs. purpose oriented)  Special Assessments • Revenue derived from project providing a specific public improvement • Originate by property owner petition or imposed by municipality • Assessment applied to special roll made up only of benefitted property owners • Assessment becomes lien on property • The Village has indicated that it does not want to utilize this revenue source for roads  Tax Increment Captured Revenues • Tax increments from districts for the portion of the project within the district boundaries (ie DDA, LDFA)  Gas and Weight Tax Receipts • Fund from gas and weight tax receipts received from the State • Limit of 50% of tax receipts for debt payments Page 4 of 21  Any combination of above © PFM 2  Agenda Item #7.a Types of Municipal Bonds Capital Improvement Bonds • Voter approval is not required (45-day referendum period applies) • Total outstanding and proposed at time of issuance can not exceed 5% of SEV • Proceeds can be used for a broad variety of capital improvement projects • Municipal buildings, parking facilities, water & sewer projects, roads, bridges etc. • Debt service may be paid from a variety of sources but is ultimately backed by a pledge of general fund revenue Michigan Transportation Fund (MTF) Bonds/Notes • Pledge the gas and weight tax receipts from the State to repay the debt. • Limit of 50% of gas and weight tax receipts may be pledged • Exempt from legal debt margin Voted Unlimited Tax General Obligation Bonds • Voters authorize a specific dollar amount of bonds for projects identified in the ballot proposal • Unlimited Debt Millage • Issuer levies the number of mills on taxable property necessary to pay the annual principal and interest payments. • Debt service is normally paid by the debt millage, not the General Fund. Special Assessment Bonds • Voter approval not required • Debt service is paid by collection of special assessments against benefitting property • Assessments must bear reasonable relationship to the value of the benefit derived from the improvement • Full faith and credit pledge of municipality pledged for additional security Page 5 of 21 © PFM 3  Agenda Item #7.a Overview of Outstanding Debt  The Village has $12,273,061 of Bonds outstanding as of May 2, 2024, as summarized below: Issuance Par Final First Call Bond Series Date Outstanding Maturity Coupon Range Date Tax Status Security General Obligation Bonds: 2006 Capital Improvement Bonds, Series A 10/17/2006 $270,000 5/1/2027 4.45% - 4.50% -- Tax-Exempt LTGO 2013 Refunding Bond - Capital Improvement 8/6/2013 140,000 5/1/2027 2.39% 5/1/2023 Tax-Exempt LTGO Total General Obligation Bonds $410,000 Revenue Bonds: Sewage Disposal System Revenue Junior Lien Revenue Bonds, Series 2015 6/25/2015 $2,836,043 5/1/2036 2.50% 4/1/2017 Tax-Exempt REV Sewage Disposal System Revenue Junior Lien Bonds, Series 2017 4/10/2017 6,077,018 10/1/2038 2.50% 10/1/2019 Tax-Exempt REV Total General Obligation Bonds $8,913,061 Special Assessment Bonds: 2019 Special Assessment Bonds 8/20/2019 520,000 5/1/2034 2.81% 5/1/2026 Tax-Exempt LTGO Total General Obligation Bonds $520,000 Share of County Issued Bonds: Monroe County Water Supply System Refunding Bonds, Series 2010 7/15/2010 $520,000 5/1/2026 4.00% - 4.25% 5/1/2020 Tax-Exempt LGTO Monroe County Sewage Disposal System Refunding Bonds, Series 2019 6/11/2019 1,910,000 5/1/2034 4.00% 5/1/2029 Tax-Exempt LGTO Total Operating - Limited Tax GO Debt $2,430,000 Total All Debt $12,273,061 Page 6 of 21 Sources: Michigan Advisory Council (MAC) © PFM 4  Agenda Item #7.a Village’s Legal Debt Margin  Limited to 10% of the Village’s State Equalized Value  May include an equivalent for State Revenue Sharing (The constitutional and CVTRS State Revenue Sharing paying divided by the Village’s Operating Millage rate adjusted for distributions over 100%)  Certain bonds are exempt from inclusion in the legal debt limitation including: revenue bonds, special assessment bonds, Michigan Transportation Fund (MTF) bonds and notes, certain bonds to abate pollution, court ordered bonds, a portion of refunding bonds, and bonds without the Village’s full faith and credit pledge  Capital improvement bonds limited to 5% of SEV  Below is the Village’s legal debt margin remaining as of May 2, 2024 VILLAGE OF DUNDEE Legal Debt Limitation As of May 2, 2024 2023 State Equalized Value $327,156,906 2023 Equivalent IFT Value 3,175,083 2023 Revenue Sharing Equivalent Value 85,108,854 Equivalent Value $415,440,843 Legal Limit 10% Legal Debt Limitation $41,544,084 Total Bonded Debt Outstanding $12,273,061 Less: Revenue Bonds (8,913,061) Less: Special Assessment Bonds (520,000) Page 7 of 21 2,840,000 Legal Debt Margin Remaining $38,704,084 Sources: MAC and Wayne County 2023 Equalization Report © PFM 5  Agenda Item #7.a Summary of Options Provided • Unlimited Tax Bonds to fund the estimated amount needed to fund the project cost, issued in 5 series starting in 2025 Voted Bonds through 2037 is estimated to require a total bond authorization of $34.38 million, with an estimated millage rate of 4.61 mills (total of 27 levy years). Non-Voted Capital • 1.5704 mills of the existing road millage supports a $5.570 Improvement Bonds million 15-year bond issuance • If the Village were to pledge the maximum gas & weight tax receipts for the issuance of MTF Bonds, we estimate the Village Michigan Transportation could issue $3.99 million in MTF Bonds assuming a 15-year Fund (MTF) Bonds bond term. • Village’s annual MTF receipts = $724,630, so 50% limit pledged to debt Page 8 of 21 payments would be $362,315 Figures shown above are based on various assumptions as provided in the supporting schedules. Changes in interest rates and taxable value growth rates may impact the millage required. © PFM 6  Agenda Item #7.a Summary of Proposed New Money Authorization Ballot Info Maximum Increase Scenario Bond Estimated Total Estimated First Year Average Total Mills (Decrease) in Table No. Description Amount Bond Term Interest Cost Interest Rate Millage* Millage All Debt Debt Levy Table_1a Unlimited Tax Vote in 2025 Series 2025 $5,045,000 15 yrs., 1 mo. $1,011,305 4.25% Series 2028 5,825,000 15 yrs., 1 mo. 1,405,918 4.25% Series 2031 6,735,000 15 yrs., 1 mo. 2,047,278 4.25% Series 2034 7,780,000 15 yrs., 1 mo. 3,452,204 4.25% Series 2037 8,995,000 15 yrs., 1 mo. 4,706,645 4.25% Total $34,380,000 $12,623,350 4.65 4.61 4.65 4.65 Table_2a Limited Tax $5,570,000 15 yrs., 1 mo. $2,233,340 4.25% n/a n/a 1.5704 Table_3a 50% Pledge of MTF Revenue $3,990,000 15 yrs., 1.5 mo. $1,511,718 4.25% n/a n/a n/a ASSUMPTIONS: - Bonds Dated March or May 2024. - an annual change in Taxable Value of 3.00% for 3 years and 2.00% thereafter. - IFT Value of $5,500,000 for 2024 - Estimated DDA Capture of $9,135,000 for 2023 Page 9 of 21 *The interest rates shown above are estimates. The actual interest rates will be determined at the time of sale. Changes in interest rates may impact the millage required. The final millage will be based on actual interest rates, actual bond payments and © PFM actual taxable values. 7  Agenda Item #7.a Bond Proposition Amount Scenarios  The table below provides estimated bond proposition scenarios at various estimated millage rates. All the scenarios assume: • Bonds issued in 5 series in 3-year increments from 2025 to 2037 for 15-year terms each at 4.25% interest rates • Taxable value growth rates of 3% for 3 years and 2% per year thereafter Estimated Estimated Bond Millage Proposition Rate Amount 3 mills $22,240,000 3.5 mills $25,990,000 4 mills $29,675,000 4.65 mills $34,380,000 Page 10 of 21 *The interest rates shown above are estimates. The actual interest rates will be determined at the time of sale. Changes in interest rates may impact the millage required. The final millage will be based on actual interest rates, actual bond payments and actual taxable values. © PFM 8  Agenda Item #7.a Voted Bond Issues  Voter Approval Required Voters authorize the Village to issue a not-to-exceed dollar amount of bonds to pay for improvements identified in the ballot proposal.  Unlimited Debt Millage The Village levies the number of mills on taxable property necessary to pay the annual principal and interest payments. Debt service is paid by the debt levy.  Items Required on Ballot • Maximum amount of bonds • Bond purpose • First year’s estimated millage rate for new bonds • Estimated simple average annual millage rate for new bonds • Maximum term of the bonds  2024 Election Dates and Lead Times Filing Election Village Approves Deadline Dates Ballot Language With County Aug. 6, 2024 May 7, 2024 May 14, 2024 Page 11 of 21 Nov. 5, 2024 August 6, 2024 Aug. 13, 2024 © PFM 9  Agenda Item #7.a Sample Ballot Language Road Improvements and Infrastructure Bond Proposal Shall the Village of Dundee, County of Monroe, Michigan, borrow the principal sum of not to exceed _____________________ Dollars ($__________), and issue its unlimited tax general obligation bonds, payable in one or more series, not to exceed fifteen (15) years from the date of issue of each series, to pay the cost of acquiring and constructing road improvements in the Village, including related water, sewer, stormwater and sidewalk improvements? If approved, the estimated millage to be levied in 2025 is ____ mills ($___ per $1,000 of taxable value) and the estimated simple average annual millage rate required to retire the bonds is ______ mills ($___ per $1,000 of taxable value). YES  Page 12 of 21 NO  © PFM 10  Agenda Item #7.a Bond Sale Process Outline Week Determine financing and sale method / Village Council adopts Bond Authorizing 1-3 Resolution Week Prepare Preliminary Official Statement and hold due diligence call to review 1-4 Week Apply for rating, call with rating agency, and receive bond rating 3-7 Week Preliminary Official Statement and Notice of Sale (if applicable) published 6-8 Week Bond Sale or Pricing / Interest Rates and Bond Structure Finalized 9 Week Final Official Statement prepared and published / closing documents prepared 10-12 Page 13 of 21 Week Bond closing / Village receives bond proceeds / Bond proceeds invested 12 © PFM 11  Agenda Item #7.a Questions? Kari Blanchett Sarah Moore Patrick F. McGow Managing Director Senior Managing Consultant Principal PFM Financial Advisors LLC PFM Financial Advisors LLC Miller Canfield (734) 794-2523 (734) 794-2527 (313) 496-7684 blanchettk@pfm.com moores@pfm.com mcgow@millercanfield.com Page 14 of 21 © PFM 12  Agenda Item #7.a Disclosures ABOUT PFM PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. Financial advisory services are provided by PFM Financial Advisors LLC, a registered municipal advisor with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) under the Dodd-Frank Act of 2010. Swap advisory services are provided by PFM Swap Advisors LLC which is registered as a municipal advisor with both the MSRB and SEC under the Dodd-Frank Act of 2010, and as a commodity trading advisor with the Commodity Futures Trading Commission. Additional applicable regulatory information is available upon request. Consulting services are provided through PFM Group Consulting LLC. PFM’s financial modelling platform for strategic forecasting is provided through PFM Solutions LLC. For more information regarding PFM’s services or entities, please visit www.pfm.com. Page 15 of 21 © PFM 13 Page 16 of 21  Street PASER Age of Agenda Item #7.a Age of Rating Water Sanitary Main Sewer Adams 2-4 58-68 74 years years Dunham 1-3 34 years 34 years Midway 3 107 74 years years Penfield 1-2 72 years 74 years Van Nest 2-4 34-94 31-74 years years Ypsilanti 2 40-107 74 years years Cass 2-4 74 years 74 years Franklin 2-5 74 years 74 years Sidney 3 24-29 34-74 years years Page 17 of 21 Page 18 of 21  Agenda Item #7.a PRELIMINARY ESTIMATE OF COST DUNHAM NEIGHBORHOOD ROAD RECONSTRUCTION VILLAGE OF DUNDEE MONROE COUNTY, MI Geotechnical, Full time Sewer TV, Construction Topographic Engineering, Construction Material Administration Survey and Bidding Staking Testing and Inspection Contingency Street Construction (2%) (6%) (1.5%) (1.5%) (9.5%) (10%) Grand Total Dunham $2,459,700.00 $0.00 $2,000.00 $37,000.00 $37,000.00 $135,200.00 $25,100.00 $2,696,000.00 Midway $1,260,910.00 $24,000.00 $76,000.00 $19,000.00 $19,000.00 $120,000.00 $126,090.00 $1,645,000.00 Penfield $1,793,150.00 $36,000.00 $106,200.00 $27,000.00 $27,000.00 $170,000.00 $180,650.00 $2,340,000.00 Adams $3,822,870.00 $76,000.00 $227,800.00 $58,000.00 $58,000.00 $363,000.00 $384,330.00 $4,990,000.00 Van Nest $2,860,770.00 $57,000.00 $172,000.00 $43,000.00 $43,000.00 $272,000.00 $287,230.00 $3,735,000.00 Ypsilanti $2,207,370.00 $44,000.00 $135,000.00 $34,000.00 $34,000.00 $209,000.00 $221,630.00 $2,885,000.00 Total $14,404,770.00 $237,000.00 $719,000.00 $218,000.00 $218,000.00 $1,269,200.00 $1,225,030.00 $18,291,000.00 *costs for water main and sanitary sewer replacement are included in construction costs. Prices for water main and sanitary sewer were provided by Vern Moore of Mannik & Smith. Page 19 of 21 Page 20 of 21  Agenda Item #7.a PRELIMINARY ESTIMATE OF COST TOLEDO NEIGHBORHOOD ROAD RECONSTRUCTION VILLAGE OF DUNDEE MONROE COUNTY, MI Geotechnical, Full time Sewer TV, Construction Topographic Engineering, Construction Material Administration Survey and Bidding Staking Testing and Inspection Contingency Street Construction (2%) (6%) (1.5%) (1.5%) (11%) (10%) Grand Total Sidney $2,010,450.00 $40,000.00 $119,000.00 $30,000.00 $31,000.00 $190,000.00 $201,550.00 $2,622,000.00 Franklin $1,954,830.00 $39,000.00 $115,900.00 $29,000.00 $30,000.00 $185,000.00 $196,270.00 $2,550,000.00 Cass $829,850.00 $16,000.00 $50,000.00 $12,000.00 $13,000.00 $78,000.00 $83,150.00 $1,082,000.00 Total $4,795,130.00 $95,000.00 $284,900.00 $71,000.00 $74,000.00 $453,000.00 $480,970.00 $6,254,000.00 *costs for water main and sanitary sewer replacement are included in construction costs. Prices for water main and sanitary sewer were provided by Vern Moore of Mannik & Smith. Page 21 of 21