HomeMy WebLinkAbout2019-109 Council ResolutionCITY OF LINO LAKES, MINNESOTA
RESOLUTION NO. 19-109
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
(Water Tower No. 3 Improvements)
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 to construct a 1.5
Million Gallon Water Tower (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
$4,700,000. 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 9th day of September, 2019.
The motion for the adoption of the foregoing resolution was introduced by Council Member
Rafferty and was duly seconded by Council Member Stoesz and
upon vote being taken thereon, the following voted in favor thereof:
Rafferty, SToesz, Maher, Manthey, Reinert
The following voted against same:
none
ATTEST:
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anne Bartell, City Cle
Jeff Reinert, Mayor
CITY COUNCIL
AGENDA ITEM 1E
STAFF ORIGINATOR: Michael Grochala, Community Development Director
MEETING DATE: September 9, 2019
TOPIC: Intent to Bond
VOTE REQUIRED:
INTRODUCTION
Consideration of Resolution No. 19-109, Declare Intent to
Reimburse from Bond Proceeds, West Shadow Lake Area Street
and Utility Improvements.
3/5
Staff is requesting council approval to declare the City's intent to reimburse itself from bond
proceeds for the proposed 2019 Water Tower No. 3 Project.
BACKGROUND
On January 22, 2019 the City Council authorized the preparation of plans and specifications for
the Water Tower No. 3 Improvement Project. The project The project includes construction of a
new 1.5 million gallon water tower. The estimated project cost is $4,700,000.
The project will be financed by 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.
Approval of the Intent to Bond resolutions does not obligate the City issue bonds.
RECOMMENDATION
Staff is recommending adoption of Resolutions No. 19-109.
ATTACHMENTS
1. Resolution No. 19-109