HomeMy WebLinkAboutItem 06.h
March 16, 2020 Item No.
APPROVE RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF
LAKEVILLE TO REIMBURSE CERTAIN EXPENDITURES FROM BOND PROCEEDS
Proposed Action
Move to approve the Resolution Declaring the Official Intent of the City of Lakeville to Reimburse
Certain Expenditures from Bond Proceeds.
Overview
The Capital Improvement Plan (CIP) for 2020-2024 provides the financial framework for our
community’s infrastructure improvements for the next five years. The 2020-2024 CIP did not
reflect the $8.8 million of capital improvements associated with the Lakeville Arenas (i.e. parking
lot expansion and energy savings improvements to the arena facilities). The City Council has
discussed these projects at their workshops.
Approximately $1.5 million of water facility and infrastructure improvements and equipment were
included in the 2020-2024 CIP. During the 2020 budget and utility rate update, staff determined
that the City would need to issue bonds for these improvements.
The Internal Revenue Service has issued Treasury Reg. 1.150-2 which provides that proceeds of
tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain
requirements are met. To meet these requirements, the City should annually declare its intent to
bond for certain projects. The resolution includes projects that may use bonds as a funding source.
Primary Issues to Consider
• Does this resolution require the City to issue bonds for the projects? Approval of this
resolution only approves the City’s intent to bond. It does not approve the sale of bonds
or the projects. This declaration does not obligate the City to issue bonds for the
projects.
Supporting Information
• Resolution
Financial Impact: Budgeted: Y☒ N☒ Source:
Related Documents: (CIP, ERP, etc.):
Envision Lakeville Community Values: Good Value for Public Services
Report Completed by: Jerilyn Erickson, Finance Director
$10.3 million Various
2020-2024 CIP; 2020 Budget
CITY OF LAKEVILLE
RESOLUTION NO. ___
RESOLUTION DECLARING THE OFFICIAL INTENT OF THE CITY OF LAKEVILLE TO
REIMBURSE CERTAIN EXPENDITURES FROM BOND PROCEEDS
WHEREAS, the Internal Revenue Service has issued Treasury 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 later reimbursed from the proceeds of tax-exempt bonds;
and
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 Lakeville,
Minnesota as follows:
1. The recitals set forth above are incorporated herein.
2. The City proposes to undertake projects (the “Projects”) consisting of a) parking lot and
energy savings improvements to its arena facilities located at 19900 Ipava Avenue in the City
and 8525 215th Street West in the City at a cost of approximately $8.8 million and b) water
facility and infrastructure improvements and equipment acquisition at a cost of
approximately $1.5 million. The City reasonably expects to reimburse the expenditures made
for all or a portion of the costs of the Projects from the proceeds of tax-exempt bonds. All
reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other
expenditures eligible for reimbursement under the Reimbursement Regulations.
3. This Declaration has been made no 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 five 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 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 the date hereof. The anticipated original
expenditures for the Projects 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 expenditures.
5. This Declaration is intended to constitute a declaration of the official intent for the purposes
of the Reimbursement Regulations.
ADOPTED by the Lakeville City Council this 16th day of March 2020.
CITY OF LAKEVILLE
___________________________
Douglas P. Anderson, Mayor
ATTEST:
_____________________________
Charlene Friedges, City Clerk
VOTE Anderson Hellier Lee Volk Wheeler
Aye ☐ ☐ ☐ ☐ ☐
Nay ☐ ☐ ☐ ☐ ☐
Abstain ☐ ☐ ☐ ☐ ☐
Absent ☐ ☐ ☐ ☐ ☐