HomeMy WebLinkAboutR-2005-10 Bayshore water/sewer replacement project
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REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested:
June 27 2005
Appropriation
Requested By: C nthia Alexander Director of Finane
N/A
Department: FINANCE
Account Number: N/A
Report:
Resolution: XX Ordinance:
Amount Budgeted:
Exhibits:
Resolution 2005-
Amount Requested:
N/A
Exhibits:
Budgeted Item:
Exhibits:
SUMMARY & RECOMMENDATION
The City of La Porte intends to issue Certificates of Obligation Bonds for the following projects:
Bayshore Water / Sewer Replacement
up to $ 350,000
While preliminary work has begun on these projects, it is not desirable for us to issue debt at this
time. However, because we are moving forward with construction and construction phase
services, we recommend the City Council approve a resolution that allows the City to reimburse
itself from future bond proceeds for expenditures that are made prior to the issuance of the debt.
This is a position that we have taken on several other projects in the past as recommended by
bond counsel and required by federal law .
The attached resolutions give us the option to reimburse ourselves from future bond proceeds for
certain costs associated with the above-mentioned projects.
This action will allow the City to reimburse the Utility Fund to improve its financial condition as
we have been drawing down the fund balance.
Recall that during last year's budget discussions we noted that this year Council would be
presented with a new utility rate model, with proposed increases, for your consideration.
Action Required bv Council: Approve resolutions declaring intention to reimburse certain
expenditures with borrowing proceeds.
6~~!ocr
Date I' I
RESOLUTION NO. 2005- IV
RESOLUTION DECLARING INTENTION TO REIMBURSE CERTAIN EXPENDITURES WITH BORROWING
PROCEEDS
WHEREAS, the City of La Porte, Texas (the "Issuer") desires to pay expenditures in connection with the design, planning,
acquisition, construetion, equipping, and/or renovating the project or facilities described as the Bayshore WaleI' ,I Sewer
Replacement project (the "Project").
WHEREAS, Article 717k-6, Vernon's Texas Civil Statutes, as amended ("Article 717k-6"), permits the Issuer to use the
proceeds of obligations to reimburse the Issuer for costs attributable to the Project paid or incurred before the date or
issuance of sllch obligations: and
WHEREAS, the Issuer finds, considers, and declares that the reimbursement of the Issuer for the payment of such
expenditures will be appropriate and consistent with the objectives of the Issuer's programs and, as such. chooses to
declare its intention, in accordance with the provisions of Seetion I. I 50-2 of the Treasury Regulations, to reimburse itsel l'
for such payments at sueh time as it issues obligations to finance the Project.
NOW, THERFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS THAT:
Section I. This Resolution declares the intent of the Issuer (0 reimburse the expenditures for the Project with the
proceed of obligations. The Issuer presently intends to reimburse the expenditure by incurring obligations issued under
Tl'\as law, the il,terest on which is excludable from gross income undcr Section I O~ or the Internal Revenue Code ,,1'
I 0S6, as <lmended.
Section 2. The Issuer reasonabl~i e\pects to incur debt. in one or more scries of obligations, in an aggregate
maximum principal amount now expected to be equal to 5350.000 for the purpose of paying the costs orthe Project.
Section 3. The Issuer intends to reimburse the expenditures hereunder not later than] S months after the date of the
original expellditure is paid or the date the Project is placed in service or abandoned, but in no event morc than thrce years
aner the original expenditure is paid unless the Project is a construction project for which the Issuer and a licensed
architect or engineer have certified that at least five years are necessary to complete lhe Project in which event the
maximum reimbursement period is five years after the date of the original expenditure.
Section 4. The Issuer intends that this Resolution satisfy the official intent requirement set forth in Section 1.150-2
or the TreasUl'Y Regulations and evidences its intentions under Article 7l7k-6.
Section 5. This resolution shall be liberally construed to evidence the intent of the Issuer to comply with state law
and federal income tax law in the issuance of tax-exempt obligations for the Project.
PASSED AND APPROVED this the 27lh day of June 2005.
V::t7~
Alton Porter, Mayor
ATTEST
APPROVED:
t.fll ~4J 114d/
City Secretary
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City Attorney