CITY COMMISSION AGENDA ITEM

Department:	City Manager’s Office		Commission Meeting Date:  July 10, 2018
Staff Contact:	Casey Toomay, Assistant City Manager
Recommendations/Options/Action Requested:
Consider the following items related to an agreement between the City of Lawrence and the Lawrence Humane Society, Inc.: a) Adopt on first reading, Ordinance No. 9516, making certain findings; and authorizing the issuance of general obligation bonds of the City to finance a $2.5 million economic development grant to the Lawrence Humane Society, Inc.; b) Authorize the City Manager to execute an agreement with the Lawrence Humane Society to provide the grant to be used for construction of an animal shelter facility, and c) Authorize an initial payment of the grant funds in the amount of $500,000, if appropriate.
Executive Summary:		The City has a contract with the Lawrence Humane Society (LHS) to provide animal housing facilities per the City’s required statutory animal control functions.  The Humane Society’s current facility is inadequate for their mission of humanely providing space for homeless and abandoned animals in Lawrence.  The Humane Society is currently constructing a new $7.5M facility.  Recognizing the efficiency of continuing to partner with the Humane Society in lieu of constructing and operating a separate municipal shelter, the City Commission previously declared an intent to help participate in funding construction of the new facility.  Adopted in January of 2017, Resolution 7186 declared the intent to issue general obligation bonds in an amount not to exceed $5,000,000 to finance a portion of the cost of acquiring, constructing, and equipping a facility to be located in the City.  At that time, the City was going to provide $2.5 million toward the new facility as well as loan the Humane Society $2.5 million.  However, the Humane Society was able to obtain private financing so the loan from the City is no longer necessary.  Staff has worked with the Humane Society on the documents necessary to proceed with the City’s participation in the project. Ordinance 9516.  Using Home Rule powers, the City Commission is able to issue General Obligation Bonds to fund this project, provided they make certain findings about the project.  These findings are outlined in Ordinance 9516.  The Ordinance finds this project will stimulate and foster economic development in the City in order to enhance and provide for the public health, safety, and welfare of the City.  The Ordinance also finds that it is in the interest of the public health, safety and welfare of the City to make the grant to the Humane Society and authorize the issuance of general obligation bonds in an amount not to exceed $2.5 million to fund the grant.  Funding Agreement.  Staff worked with our Bond Counsel, Gilmore and Bell, and the Humane Society to draft a proposed agreement pursuant to which the City will provide $2.5 Million for construction of the new facility.  Under the terms of the agreement, the City will make one upfront payment of $500,000 and then monthly installment payments until the Humane Society obtains a certificate of occupancy, at which time the remaining balance of the funds will be paid.  Under the Agreement, the City has a purchase option on the building for a period of 20 years, which may be exercised by the City in the event the Humane Society defaults on any of their loans.  A memorandum of agreement is also proposed to be filed with the Register of Deeds. Ordinance 9516 and the Agreement both reference a payment of $500,000 to be made upon execution and delivery of the Agreement.
Strategic Plan Critical Success Factor		Effective Governance/Professional Administration Safe, Healthy, and Welcoming Neighborhoods Core Services Sound Fiscal Stewardship Collaborative Solutions Economic Growth and Security
Fiscal Impact (Amount/Source):		This item was in 2018 -2022 Capital Improvement Plan (CIP).  The fiscal impact to the City of issuing $2.5 million in debt is estimated to be $339,000 in annual debt service for ten years.  The first debt service payment is included in the City Manager’s Recommended Budget for 2019 and in the balanced financial forecast.
Attachments:		Grant Agreement - Added 07/10/18 Ordinance 9516 Memo of Agreement Resolution of Humane Society Board LHS Board Minutes from 4/25/18

Reviewed By: (for CMO use only)

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