Consideration and Adoption of Resolution No. 2014-27:  A resolution of the Mayor and Council of the City of Flagstaff, Arizona, declaring for purposes of Section 1.150-2 of the Federal Treasury Regulations, official intent to be reimbursed in connection with certain capital expenditures relating to the U.S. Geological Survey Campus Facilities Construction for the Innovation Mesa Business Accelerator. 

Approval of this resolution will allow the City to reimburse itself for expenditures made on behalf of this project before the financing is secured.

The expenditures for the Innovation Mesa Business Accelerator will be reimbursed from loan proceeds.  The loan will then be paid back from the  lease proceeds collected from the facility tenants.

Retain, expand, and diversify economic base

Effective governance

Yes.  May 18, 2004 election authorizing the U.S. Geological Survey Campus Facilities Construction of which this type of facility is a planned expansion.

• Approve the Reimbursement Resolution to allow the City the greatest flexibility in assuring expenditures are reimbursed and debt can be secured when most advantageous to the City
• Do not approve the Reimbursement Resolution and require that the debt be secured in advance of the proposed project

On May 18, 2004, a general election was held by the City of Flagstaff whereby the citizens authorized obligations to be issued in relation to ten capital projects.  Question 101 authorized $61,200,00 for the U.S. Geological Survey Campus Facilities Construction and Renovation which allows for the development within that campus for governmental, scientific research and related private sector uses.  Any debt issued under this authority is paid through lease revenues. 

To date, the City has issued $3,370,000 against this authority to construct the Northern Arizona Center for Entrepreneurship and Technology (NACET), leaving $57,830,000 in remaining authority.  This second issue is to fund the Innovation Mesa Business Accelerator and Alternate/Secondary Emergency Operations Center.

IRS regulations are very specific as to what capital expenditures are eligible for reimbursement.  These expenditures must be any cost of a type that is property chargeable to a capital account (or would be so chargeable with a proper election) under general federal income tax guidelines.

The entire project cost is estimated to be $8,162,500 and is funded as follows:

EDA grant -              $4,000,000
NAU contribution -   $1,100,000
City debt authority - $3,162,500

The final amount that the City will issue will depend on the final total construction cost as offset by the proportionate share paid by EDA.

The debt payments will be made through lease revenue receipts.

This resolution allows capital project timing to not be hampered by the issuance of the related debt.

Empower - The Citizens of Flagstaff approved this project through a majority vote at the General Election held May 18, 2004.

• Approve the Reimbursement Resolution to allow the City the greatest flexibility in assuring expenditures are reimbursed and debt can be secured when most advantageous to the City
• Do not approve the Reimbursement Resolution and require that the debt be secured in advance of the proposed project