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Home My WebLink About5F - Declaration of Intent to Bond o� P�O�P U 4646 Dakota Street SE Prior Lake,MN 55372 �INNESo�P CITY COUNCIL AGENDA REPORT MEETING DATE: FEBRUARY 23, 2015 AGENDA#: 5F PREPARED BY: JERILYN ERICKSON, FINANCE DIRECTOR PRESENTED BY: JERILYN ERICKSON AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF PRIOR LAKE TO REIMBURSE CERTAIN EX- PENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE CITY DISCUSSION: Introduction This agenda item asks the City Council to adopt a resolution that declares the City's intent to bond for certain projects. History 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. Conclusion The Council should adopt the resolution declaring its intent to issue bonds in 2015. ISSUES: Approval of this resolution only approves the City's intent to bond. It does not approve the sale of bonds or the projects. Those approvals follow standard City process and are done on an individual basis. In addition, this declaration does not obligate the City to issue bonds for the projects either. FINANCIAL In order to satisfy federal regulations and state statute, the City Council must IMPACT: adopt a resolution that provides a "notice of intent to bond." The resolution 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. ALTERNATIVES: 1. Approval of a resolution declaring the official intent to reimburse certain ex- penditures from the proceeds of bonds to be issued by the City. 2. Deny this agenda item for a specific reason and provide staff with direction. 3. Table this item to a certain date in the future. RECOMMENDED Alternative#1 MOTION: O� PRtpr ti U 4646 Dakota Street SE 4i1VJ.Ms0,'VP Prior Lake,MN 55372 RESOLUTION 15-xxx 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 2015 are$12,450,000. 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. Mushtown/Maple/Panama b. TH 13/ 150th Street c. Stemmer Ridge d. Duluth Avenue e. Credit River Road f. 2015 Reconstruction Projects g. Maintenance Center(Membrane Roofing) 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. Mushtown/Maple/Panama-$1,250,000 b. TH13/ 150th Street-$2,250,000 c. Stemmer Ridge-$3,650,000 d. Duluth Avenue-$800,000 e. Credit River Road-$1,100,000 f. 2015 Reconstruction Projects-$2,800,000 g. Maintenance Center(Membrane Roofing) -$600,000 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 proceeds of an issue;or c)"preliminary expenditures"up to an 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 23RD DAY OF FEBRUARY 2015. VOTE Hedberg Keeney McGuire Morton Thompson Aye ❑ ❑ ❑ ❑ ❑ Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ Frank Boyles, City Manager