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Shoreline staff outlines up to $38.36 million LTGO bond plan for sidewalks and surface-water projects
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Summary
City staff presented Ordinance 1057 proposing limited-term general obligation bonds not to exceed $38,360,000 to finance sidewalk improvements and surface-water capital projects, with staff recommending adoption at the April 6 meeting and an anticipated bond sale in May.
Shoreline staff on March 23 presented Ordinance 1057, which would authorize limited-term general obligation (LTGO) bonds to fund the next phase of the city’s sidewalk program and capital projects for the surface water utility.
"This ordinance addresses several components of debt," Director Joe said, describing staff work with bond counsel Deanna Gregory and municipal advisor Maggie Marshall. The ordinance would authorize the issuance of bonds with an aggregate principal amount up to $38,360,000 and would also allow defeasance of the 2019 B series bonds.
Staff said they anticipate needing about $36.8 million for projects — roughly $6.0 million for surface-water projects and $30.8 million for the next phase of sidewalks — and that the issuance would be one combined sale covering two separate programs. Staff emphasized that Transportation Benefit District (TBD) sales tax revenue (the 0.2% TBD levy) can be used only for debt service and that the city typically receives about $3,000,000 annually from the TBD.
Director Joe said the combined issuance should reduce borrowing costs by attracting more bidders and noted the TBD is scheduled to end in 2038. He added the city is mindful of IRS rules on building cash balances within the TBD and described a plan to defease the 2019 bonds to reduce the TBD cash balance.
Council members asked about current market rates and whether the city could delay issuance to seek lower rates. Director Joe said staff anticipates an early‑May issuance timeline, a rating call with S&P in mid‑to‑late April, and that while rates have ticked up they remain within the ordinance’s 4% true interest cost cap. "I don't think they would be super advantageous for us to wait much longer on this," he said, adding that public-works schedules create a need for funding this summer.
Staff recommended adoption of the ordinance on April 6 so the city can proceed with the rating call and a May bond sale; no ordinance adoption vote occurred on March 23.
If the council adopts the ordinance on April 6, staff said they expect to conduct a bond sale in early–mid May and receive proceeds before June 1.
