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HomeMy WebLinkAbout2005-055 Council Resolution• • CITY OF LINO LAKES, INIINNESOTA RESOLUTION NO. 05-55 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 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 the following project (the "Project "). Well No. 5 Improvements 2. The City reasonably expects to reimburse the expenditures made for certain costs of the Project frorn the proceeds of bonds in an estimated maximum principal amount of $750,000.00. 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. Approved by the City Council of the City of Lino Lakes this 1 lth day of April, 2005. Attest: SJB- 254624v1 LN 140 -87 - 11 0 - CITY OF LINO LAKES, MINNESOTA May., John ergeson • AGENDA ITEM 6HH STAFF ORIGINATOR: James E. Studenski, City Engineer COUNCIL MEETING DATE: April 11, 2005 TOPIC: Resolution No. 05 -55, Declare Intent to Bond, Well No. 5. VOTE REQUIRED: 3/5 Vote required BACKGROUND: The City is required to declare its intent to reimburse project costs from bond proceeds prior to encumbering project costs. This is a non - binding declaration that must take place in order to finance projects in this manner. The Well No. 5 Improvements project may be financed through bond proceeds. At this time, it is uncertain if the City will bond for the well drilling or the. pumphouse structure construction. The City Finance department is reviewing the Tong -term cash flow of the Trunk and Area Fund that will pay for this project and they want to have the bonding possibility if it means the most financially responsible payment of this project. Again, this is a non - biding declaration. OPTIONS: 1. Return to staff for further review. 2. Adopt Resolution No. 05 -55, Declare the City's Intent to Bond for Well No. 5. 3. Not adopt Resolution No. 05 -55. RECOMMENDATION: Option No. 2 - Staff recommends that Resolution No. 05 -55 be adopted.