HomeMy WebLinkAbout2010 09 27 Consent 202 Adoption of Resolution 2010-53 Compliance with United States Treasury Regulation COMMISSION AGENDA
CONSENT X
INFORMATIONAL
ITEM 202 PUBLIC HEARING
REGULAR
September 27, 2010 MGR /DEPT
Meeting Authorization
REQUEST: The City Manager and Finance Department requests The City Commission consider
the adoption of resolution 2010 -53 expressing the intent for purposes of compliance
with United State Treasury regulation section 1.150- (2)(e) to reimburse the City for
any temporary loans for the reclaim water plant with the proceeds of a future financing
agreement.
SYNOPSIS:
On August 23, 2010 the City Commission approved the construction of the Lake Jesup Reclaimed Water
Plant. Funding for this project will ultimately come from a commercial note from a bank. However, there will
be a lag of approximately 2 months between the time the construction starts and the loan with the bank is
secured. The attached resolution establishes the City's right to pay itself back for any monies lent, from
reserves, to start the project before the bank loan monies are received /available.
CONSIDERATIONS:
1) The Lake Jesup reclaimed project was approved by the City Commission on August 23, 2010.
2) United State Treasury regulation section 1.150- (2)(e) requires that the City establish an official intent
to reimburse itself with future loan proceeds.
3) Government loan on issued on a tax exempt status making the use of the monies a target for review by
the IRS.
4) Without the resolution the City would still be able to lend the money to the project but could not use
any of the loan proceeds to pay itself back.
5) A commercial loan will be established by the end of November 2010 and the need for interim
financing will no longer be necessary.
6) The St. John's grant ($1,280,000) requires the Lake Jesup Reclaimed Project to be completed by April
of 2012 making the October 2010 start date critical.
FISCAL IMPACT:
With the passage of this resolution the Sewer and Water Fund will be able to begin the Lake Jesup Reclaimed
Project in October and provide interim financing using its reserves ($1.2 million) until loan proceeds are
available.
COMMUNICATION EFFORTS:
Copies of the signed resolution will be sent to the United States Treasury Department and PFM consulting.
The original will be held on file for future possible official inquiries by the IRS.
RECOMMENDATION:
It is the recommendation of the City Manager and the Finance Department that the City Commission
approve Resolution 2010 -53 to establish the right to be reimbursed for any interim financing solution
that maybe required to start the Lake Jesup Reclaimed Project.
ATTACHMENTS:
Resolution 2010 -53
RESOLUTION NO. 2010-53
A RESOLUTION EXPRESSING THE INTENT OF THE
CITY OF WINTER SPRINGS, FLORIDA TO CONSTRUCT
AND EQUIP A RECLAIMED WATER PLANT AND
RELATED IMPROVEMENTS; EXPRESSING THE INTENT
FOR PURPOSES OF COMPLIANCE WITH UNITED
STATES TREASURY REGULATION SECTION 1.150- (2)(e)
TO REIMBURSE WITH THE PROCEEDS OF A FUTURE
FINANCING, CAPITAL EXPENDITURES MADE WITH
RESPECT TO THE CONSTRUCTION AND EQUIPPING
OF SUCH IMPROVEMENTS; PROVIDING FOR THE
ISSUANCE BY THE CITY OF NOTES, BONDS OR OTHER
OBLIGATIONS IN ONE OR MORE SERIES IN AN
AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING
$3,850,000 TO PAY THE COST OF SUCH PROJECTS; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Winter Springs, Florida (the "City ") intends to finance the cost
of the construction and equipping of a City owned and operated reclaimed water plant and
related improvements (the "Projects "), and to finance the costs of such Projects with the proceeds
of its bonds, notes or other obligations to be issued in the future in one or more series (the
"Financing "); and
WHEREAS, the City expects to initially pay certain costs of the Projects with funds
other than proceeds of the Financing (the "Advanced Funds ") and to reimburse itself for such
expenditures with proceeds from the Financing;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA, THAT:
SECTION 1. AUTHORITY. This Resolution is adopted pursuant to Chapter 166,
Florida Statutes, and other applicable provisions of law (collectively, the "Act ").
SECTION 2. FINDINGS. The City Commission hereby finds, determines and declares
as follows:
A. The City is authorized under law, including, without limitation, the Act, to issue
the Financing for the valid public purpose of paying the cost of the Projects.
B. It is necessary, desirable, convenient and in the interest of the City that the
Projects be constructed, equipped and financed as contemplated in this Resolution.
C. The City intends to finance the cost of the design, permitting, construction,
equipping and installation of the Projects with the proceeds of its Financing to be issued in the
future.
{01575453;1 }
D. The City expects to pay certain costs of the Projects with Advanced Funds before
the issuance of the Financing.
SECTION 3. EXPRESSION OF INTENT. The City reasonably expects to use the
proceeds of the Financing to reimburse itself for all expenditures described herein made with the
Advanced Funds. Any such expenditures to be reimbursed have been paid not more than sixty
days earlier than the date of this Resolution or will be paid on or after the date of this Resolution.
This Resolution is a declaration of the official intent of the City in that regard, within the
contemplation of Section 1.150- (2)(e) of the Income Tax Regulations promulgated by the United
States Department of the Treasury.
SECTION 4. MAXIMUM AMOUNT OF DEBT. The maximum principal amount of
the Financing expected to be issued to finance the cost of the Projects is $3,850,000.
SECTION 5. FURTHER ACTION. The officers and employees of the City are hereby
authorized to do all acts and things required of them by this Resolution for the full, punctual and
complete performance of all the terms, covenants and agreements contained herein or necessary
or convenient to the issuance of the Financing as provided herein.
SECTION 6. REPEALING CLAUSE. All resolutions of the City or parts thereof in
conflict with the provisions hereof are to the extent of such conflict hereby superseded or
repealed.
SECTION 7. EFFECTIVE DATE. This Resolution shall take effect immediately upon
its adoption.
PASSED AND ADOPTED at the regular meeting of the City Commission of the City of
Winter Springs, Florida on the 27th day of September 2010.
By:
Mayor
ATTEST:
ANDREA LORENZO - LUACES, City Clerk
Approved as to Form and sufficiency for the
City of Winter Springs only:
ANTHONY A. GARGANESE, City Attorney
{01575453,1} 2
RESOLUTION NO. 2010-53
A RESOLUTION EXPRESSING THE INTENT OF THE
CITY OF WINTER SPRINGS, FLORIDA TO CONSTRUCT
AND EQUIP A RECLAIMED WATER PLANT AND
RELATED IMPROVEMENTS; EXPRESSING THE INTENT
FOR PURPOSES OF COMPLIANCE WITH UNITED
STATES TREASURY REGULATION SECTION 1.150- (2)(e)
TO REIMBURSE WITH THE PROCEEDS OF A FUTURE
FINANCING, CAPITAL EXPENDITURES MADE WITH
RESPECT TO THE CONSTRUCTION AND EQUIPPING
OF SUCH IMPROVEMENTS; PROVIDING FOR THE
ISSUANCE BY THE CITY OF NOTES, BONDS OR OTHER
OBLIGATIONS IN ONE OR MORE SERIES IN AN
AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING
$3,850,000 TO PAY THE COST OF SUCH PROJECTS; AND
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City of Winter Springs, Florida (the "City ") intends to finance the cost
of the construction and equipping of a City owned and operated reclaimed water plant and
related improvements (the "Projects "), and to finance the costs of such Projects with the proceeds
of its bonds, notes or other obligations to be issued in the future in one or more series (the
"Financing "); and
WHEREAS, the City expects to initially pay certain costs of the Projects with funds
other than proceeds of the Financing (the "Advanced Funds ") and to reimburse itself for such
expenditures with proceeds from the Financing;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF WINTER SPRINGS, FLORIDA, THAT:
SECTION 1. AUTHORITY. This Resolution is adopted pursuant to Chapter 166,
Florida Statutes, and other applicable provisions of law (collectively, the "Act ").
SECTION 2. FINDINGS. The City Commission hereby finds, determines and declares
as follows:
A. The City is authorized under law, including, without limitation, the Act, to issue
the Financing for the valid public purpose of paying the cost of the Projects.
B. It is necessary, desirable, convenient and in the interest of the City that the
Projects be constructed, equipped and financed as contemplated in this Resolution.
C. The City intends to finance the cost of the design, permitting, construction,
equipping and installation of the Projects with the proceeds of its Financing to be issued in the
future.
{01575453;1 }
D. The City expects to pay certain costs of the Projects with Advanced Funds before
the issuance of the Financing.
SECTION 3. EXPRESSION OF INTENT. The City reasonably expects to use the
proceeds of the Financing to reimburse itself for all expenditures described herein made with the
Advanced Funds. Any such expenditures to be reimbursed have been paid not more than sixty
days earlier than the date of this Resolution or will be paid on or after the date of this Resolution.
This Resolution is a declaration of the official intent of the City in that regard, within the
contemplation of Section 1.150- (2)(e) of the Income Tax Regulations promulgated by the United
States Department of the Treasury.
SECTION 4. MAXIMUM AMOUNT OF DEBT. The maximum principal amount of
the Financing expected to be issued to finance the cost of the Projects is $3,850,000.
SECTION 5. FURTHER ACTION. The officers and employees of the City are hereby
authorized to do all acts and things required of them by this Resolution for the full, punctual and
complete performance of all the terms, covenants and agreements contained herein or necessary
or convenient to the issuance of the Financing as provided herein.
SECTION 6. REPEALING CLAUSE. All resolutions of the City or parts thereof in
conflict with the provisions hereof are to the extent of such conflict hereby superseded or
repealed.
SECTION 7. EFFECTIVE DATE. This Resolution shall take effect immediately upon
its adoption.
PASSED AND ADOPTED at the regular meeting of the City Commission of the City of
Winter Springs, Florida on the 27 day of September 2010.
a
By: 4& Z144
f ayor
ATTEST
AND %. • 0 • RENZO- LUACES, City Clerk
Approved as to Form and sufficiency for the
City of Wi ter Springs only:
ANTHONY A. GARGANESE, .City Attorney
{01575453,1} 2