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CITY COUNCIL <br />AGENDA ITEM 2A <br /> <br /> <br />STAFF ORIGINATOR: Sarah Cotton, Finance Director <br /> <br />MEETING DATE: April 27, 2020 <br /> <br />TOPIC: Consider Resolution No. 20-43, Providing for the Issuance and <br />Sale of General Obligation Utility Revenue Bonds, Series 2020A, <br />in the Proposed Aggregate Principal Amount of $4,800,000 <br /> <br />VOTE REQUIRED: 3/5 <br /> <br />BACKGROUND <br /> <br />On August 26, 2019, the City Council accepted bids and awarded a construction contract for the <br />2019 Water Tower No. 3 Project. Water Tower No. 3 is a 1.5 million gallon (MG) composite <br />tower located off Birch Street and Centerville Road (City Property). In order to finance these <br />improvements, the City planned to issue General Obligation Utility Revenue Bonds. <br /> <br />On September 9, 2019, the City Council adopted a resolution declaring the intent to reimburse <br />from future bond proceeds. The Internal Revenue Code requires cities to declare their intent to <br />reimburse project costs incurred prior to receipt of bond proceeds. Preliminary expenditures <br />such as architectural, engineering, surveying, bond issuance, and similar costs are exempt from <br />this provision. <br /> <br />On April 6, 2020, the City Council received preliminary information regarding the issuance of <br />bonds to finance Water Tower #3, including financing recommendations. Total project cost, <br />based on bids awarded and a construction contingency of 5%, is approximately $4,682,367. <br />The General Obligation Utility Revenue Bonds will be repaid over a 15-year period by utilizing <br />revenues from the City’s Area and Unit Trunk Utility fund. <br /> <br />The City’s fiscal advisor, Baker Tilly, has prepared a Pre-Sale Summary for the Issuance of <br />General Obligation Utility Revenue Bonds to finance the Water Tower No. 3 improvements. <br />Terri Heaton of Baker Tilly will be available to answer any questions that the City Council may <br />have relative to the recommended financing. <br /> <br />Approval of Resolution No. 20-43 provides for the issuance and sale of General Obligation <br />Utility Revenue Bonds, Series 2020A, in the proposed aggregate principal amount of <br />$4,800,000. If approved, bids would be received on June 8, 2020, with consideration of award <br />and sale by the City Council at its meeting the same day. <br /> <br />RECOMMENDATION <br /> <br />Staff is recommending approval of Resolution No. 20-43. <br /> <br />ATTACHMENTS <br /> <br />Baker Tilly Pre-Sale Summary for Issuance of Bonds