HomeMy WebLinkAbout2018-092 Council Resolution"''N, CITY OF LINO LAKES, MINNESOTA
RESOLUTION NO. 18-92
DECLARING THE OFFICIAL INTENT OF THE
CITY OF LINO LAKES TO REIMBURSE
CERTAIN EXPENDITURES FROM THE PROCEEDS
OF BONDS TO BE ISSUED BY THE CITY
(Lake Drive Trunk Utilities)
WHEREAS, the Internal Revenue Service has issued Treas. 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 reimbursed from the proceeds of a tax-exempt bond;
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.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
LINO LAKES AS FOLLOWS:
1. The City proposes to undertake trunk utility improvements from Park Court
to Marshan Lane (the "Project").
2. The City reasonably expects to reimburse the expenditures made for certain
costs of the Project from the proceeds of bonds in an estimated maximum principal amount
of $466,000. 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.
3. This Declaration has been made not 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 5 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
finance or 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.
4. This Declaration is an expression of the reasonable expectations of the City based
on the facts and circumstances known to the City as of the date hereof. The anticipated original
expenditures for the Project and the principal amount of the bonds described in paragraph 2 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.
5. This Declaration is intended to constitute a declaration of official intent for
purposes of the Reimbursement Regulations.
Adopted by the Council of the City of Lino Lakes this 23th day of July, 2018.
The motion for the adoption of the foregoing resolution was introduced by Council Member
Rafferty and was duly seconded by Council Member Maher and
upon vote being taken thereon, the following voted in favor thereof:
Rafferty, Maher Manthey, Stoesz, Reinert
The following voted againsi same:
none
ATTEST:
Julianne : artell, City Clerk
Jeff Rein rt, 1 ayor
CITY COUNCIL
AGENDA ITEM lE
STAFF ORIGINATOR: Michael Grochala, Community Development Director
MEETING DATE: July 23, 2018
TOPIC: Consideration of Resolution No. 18-92, Declare Intent to
Reimburse from Bond Proceeds, Lake Drive Trunk Water Main
Improvements.
VOTE REQUIRED:
INTRODUCTION
3/5
Staff is requesting council approval to declare the City's intent to reimburse itself from bond
proceeds for the 2018 Lake Drive Trunk Utility Project.
BACKGROUND
On February 18, 2018 the City council authorized the preparation of plans and specification for the
Lake Drive Trunk Utility Project. The project includes the extension of trunk water main between
Park Court and Marshan Lane and between Pheasant Run South and Well No. 3. The estimated
project cost is $466,000.
The project is proposed to be financed by issuance of Utility Revenue Bonds. The Internal
Revenue Code requires cities to declare their intent to reimburse project costs incurred prior to
receipt of bond proceeds. Preliminary expenditures such as architectural, engineering, surveying,
bond issuance, and similar costs are exempt from this provision. However, the declaration must
be made prior to incurring land acquisition costs or hard construction costs.
Since the City will be considering easement acquisition for the improvements, passage of the
resolution is necessary to ensure reimbursement from bond proceeds, if necessary.
Approval of the Intent to Bond resolution does not obligate the City to issue bonds. Bond
issuance for this project may be combined with financing for the 2018 Street Reconstruction
project utilities.
RECOMMENDATION
Staff is recommending adoption of Resolution No. 18-92.
ATTACHMENTS
1. Resolution No. 18-92