HomeMy WebLinkAbout5I - Reimburse Certain Expenditures from Proceeds of Bonds to be Issued by the City
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c" ~ 4646 Dakota Street S.E.
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I\rlNNESO~~ CITY COUNCIL AGENDA REPORT
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
ISSUES:
FINANCIAL
IMPACT:
ALTERNATIVES:
APRIL 5, 2010
51
STEVE ALBRECHT, DIRECTOR OF PUBLIC WORKS
CONSIDER APPROVAL OF A RESOLUTION DECLARING THE OFFI-
CIAL INTENT OF THE CITY OF PRIOR LAKE TO REIMBURSE CER-
TAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE IS-
SUED BY THE CITY
Introduction
This agenda item asks the City Council to adopt a resolution that declares
the City's intent to bond for certain projects.
Historv
Annually, the City has declared its intent to bond via several resolutions
throughout the year.
Current Circumstances
In an effort to streamline the City's bonding process, the Finance Director
has implemented standard resolution formats to be followed annually to
ensure compliance with State Statutes related to bonding.
Approval of this resolution only approves the City's intent to bond. It does
not approve the sale of bonds or projects. Those approvals follow stan-
dard City process and are done on an individual basis.
In order to satisfy federal regulations and state statute, the City Council
must adopt a resolution that provides a "notice of intent to bond." The res-
olution is necessary if the City intends to reimburse itself for costs incurred
on a project that will be funded by bonds but for which bonds have yet to
be issued.
1. Approval of a resolution declaring the official intent to reimburse certain
expenditures from the proceeds of bonds to be issued by the City.
2. Deny this agenda item for a specific reason and provide staff with di-
rection.
3. Table this item to a certain date in the future.
RECOMMENDED Alternatives #1.
MOTION:
ReVired by: I
.J~-
Frank BOYI& ~anager
www.cityofpriorlake.com
Phone 952'.44-'7:9800 Fax 952.447.4245
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C ~ 4646 Dakota Street S.E.
U .~ Prior Lake, MN 55372-1714
I\rINNESO~~
RESOLUTION 10-xx
A RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF PRIOR LAKE TO
REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY
THE CITY
Motion By:
Second By:
WHEREAS, The Internal Revenue Service has issued Treasury Reg. 1.150-2 (the" Reimbursement
Regulations") providing that proceeds of tax-exempt bonds used to reimburse prior
expenditures will not be deemed spent unless certain requirements are met; and
WHEREAS, The City expects to incur certain expenditures that may be financed temporarily from
sources other than bonds, and later reimbursed from the proceeds of tax-exempt
bonds; and
WHEREAS, The City has determined to make this declaration of official intent ("Declaration") to
reimburse certain costs from proceeds of bonds in accordance with the
Reimbursement regulations; and
WHEREAS, The total estimated general obligation bonds for 2010 are $1,220,000.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows:
1. The recitals set forth above are incorporated herein.
2. The City proposes to undertake the following projects (the "Projects"):
a. CR 42/McKenna Intersection Signal
b. Shady, Rustic and Lords Streets Reconstruction
c. CR 12 Phase III
d. CR 21 Phase II (42 North)
3. The City reasonably expects to reimburse the expenditures made for certain costs of the Projects
from the proceeds of bonds in an estimated maximum principal amount of the following:
a. CR 42/McKenna Intersection Signal - $50,000
b. Shady, Rustic and Lords Streets Reconstruction - $595,000
c. CR 12 Phase 111- $520,000
d. CR 21 Phase II (42 North) - $55,000
The City may declare other separate statements of reimbursement intent in connection with specific
public improvements projects as they are initiated under Minnesota Statutes, Chapters 429 and
444, or for other capital projects, with the understanding that such additional declarations of
reimbursement intent will supplement this resolution. All reimbursed expenditures will be capital
expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement
under Section 1.150-2( d)(3) of the Reimbursement Regulations.
4. This Declaration has been made no later than 60 days after payment of any original expenditure to
be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the
following expenditures: a) costs of issuance of bonds; b) costs in an amount not in excess of
$100,000 or five percent of the proce~fif!.l6~RHffaJ9[~~preliminary expenditures" up to an
R\Council\2010 Agenda Reports\04 05 1 O\iBle~ ~~.~?ol9~Qoi Fax 952.447.4245
amount not in excess of 20 percent of the aggregate issue price of the issue or issues that are
reasonably expected by the City to finance the project for which the preliminary expenditures were
incurred. The term preliminary expenditures" includes architectural, engineering, surveying, bond
issuance, and similar costs that are incurred prior to commencement of acquisition, construction or
rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to
commencement of construction.
5. This Declaration is an expression of the reasonable expectations of the City based on the facts and
circumstances known to the City as the date hereof. The anticipated original expenditures for the
Projects and the principal amount of the bonds described in paragraph 3 are consistent with the
City's budgetary and financial circumstances. No sources other than proceeds of bonds to be
issued by the City are, or are reasonably expected to be, reserved, allocated on a long term basis,
or otherwise set aside pursuant to the City's budget or financial policies to pay such Project
expenditures.
6. This Declaration is intended to constitute a declaration of the official intent for the purposes of the
Reimbursement Regulations.
PASSED AND ADOPTED THIS 5th DAY OF APRIL 2010.
YES
NO
Myser
Hedberg
Erickson
Keeney
Millar
Myser
Hedberg
Erickson
Keeney
Millar
Frank Boyles, City Manager
R:\Council\2010 Agenda Reports\04 05 10\Intent to Bond Resolution.doc