Staff recommends that the City Council approve the attached resolution establishing compliance with the reimbursement bond regulations under the Internal Revenue Code and authorizing the financing of the proposed landfill improvements. Approval of this resolution will allow the City to reimburse eligible expenses related to the landfill improvement project that are incurred prior to the issuance of bonds.

The proposed resolution establishes the City of Billings’ compliance with federal reimbursement bond regulations related to the financing of planned landfill improvements. Under U.S. Treasury Regulations (Section 1.150-2), the City must adopt an official intent declaration in order to reimburse eligible project expenditures with future tax-exempt bond proceeds.

The resolution identifies the City’s intent to design, engineer, and construct improvements to the solid waste facility as outlined in the Solid Waste Master Plan, including a new landfill cell, a second leachate containment pond, and related infrastructure. The City expects to issue up to $14 million in bonds to finance these capital improvements and to reimburse qualifying project costs incurred prior to bond issuance. No prior expenditures have been made that would conflict with reimbursement requirements, and no long-term funds are currently allocated for the project outside the anticipated bond financing.

Adopting this resolution allows the City to preserve its ability to use future bond proceeds for reimbursement and ensures compliance with applicable federal regulations.

The City will be issuing bonds to finance the design, engineering, and construction of planned improvements to the City’s solid waste facility, including a new landfill cell, a second leachate containment pond, and related infrastructure. The City must begin incurring expenses for these improvements before the bond proceeds are available. Under federal reimbursement bond regulations, the attached resolution must be approved in order for the City to reimburse those pre-issuance expenses with the proceeds of the future bond sale

The proposed landfill improvements are expected to be financed through the issuance of up to $14 million in bonds. Because project expenses will begin before the bonds are issued, the City will need to temporarily use available cash or other short-term funding sources to cover early design, engineering, and construction costs. Approval of the attached reimbursement resolution preserves the City’s ability to repay those early expenditures with bond proceeds once the bonds are sold, ensuring that long-term project costs are aligned with the intended financing plan.

City Council may:
• Approve the resolution, allowing the project to move forward with the ability to reimburse pre-issuance expenses once the bonds are sold; or
• Not approve the resolution, in which case the City may need to delay or suspend certain design, engineering, or construction activities until bond proceeds are available.