10.B.
City Council Meeting
- Meeting Date:
- 12/18/2012
- From:
- Barbara Goodrich, Management Services Director
Information
TITLE:
Consideration and Adoption of Resolution No. 2012-43: 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 Forest Health and Water Supply Protection and a Core Services Maintenance Facility.
RECOMMENDED ACTION:
Read Resolution No. 2012-43 by title only.
Adopt Resolution No. 2012-43.
Adopt Resolution No. 2012-43.
Policy Decision or Reason for Action:
Approval of this resolution will allow the City to reimburse itself for expenditures made on current voter approved bonded projects for expenditures made in advance of issuing the debt.
Financial Impact:
These expenditures will be reimbursed from proceeds of the sale of obligations or other financing mechanisms to be used in the future by or on behalf of the City.
Connection to Council Goal:
A sustainable community through economic vitality, environmental protection and social inclusion.
Effective governance.
Maintain and deliver quality, reliable infrastructure.
Effective governance.
Maintain and deliver quality, reliable infrastructure.
Has There Been Previous Council Decision on This:
Yes. The November 6, 2012 bond election authorized both the Forest Health Initiative and the Core Services Maintenance Facility. Through Resolution 2012-40 the Council officially adopted the results of that election.
Options and Alternatives:
Approve the reimbursement resolution as this allows the City the greatest flexibility in assuring expenditures are reimbursed and debt can be issued when it is most advantageous to the City.
Do not approve the reimbursement resolution and require that bonded debt be issued in advance of the proposed capital projects.
Do not approve the reimbursement resolution and require that bonded debt be issued in advance of the proposed capital projects.
Background/History:
On November 6, 2012, a Special Debt Authorization Election was held by the City of Flagstaff whereby the citizens authorized obligations to be issued for two projects. Question 405 authorized a total of $10,000,000 for the 'Forest Health and Water Supply Protection Project'. Question 406 authorized a total of $14,000,000 for the 'Core Services Maintenance Facility'.
The Forest Health and Water Supply work will begin in the near future and will continue for several years. A portion of this obligation is anticipated to be issued Spring 2013 for the first two years of estimated work.
The Core Services Maintenance Facility purchase contract is anticipated to be completed by the spring of 2013. In that case, the entire $14,000,000 will be issued and used for the land/facility and/or the infrastructure as appropriate.
The Forest Health and Water Supply work will begin in the near future and will continue for several years. A portion of this obligation is anticipated to be issued Spring 2013 for the first two years of estimated work.
The Core Services Maintenance Facility purchase contract is anticipated to be completed by the spring of 2013. In that case, the entire $14,000,000 will be issued and used for the land/facility and/or the infrastructure as appropriate.
Key Considerations:
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 properly chargeable to a capital account (or would be so chargeable with a proper election) under general federal income tax guidelines.
Community Benefits and Considerations:
This resolution allows capital project timing to not be hampered by bond issuance timing.
Community Involvement:
Empower - Citizens of Flagstaff approved these projects through a majority vote at the Special Debt Authorization Election held November 6, 2012.
Expanded Options and Alternatives:
Approve the reimbursement resolution as this allows the City the greatest flexibility in assuring expenditures are reimbursed and debt can be issued when it is most advantageous to the City.
Do not approve the reimbursement resolution and require that bonded debt be issued in advance of the proposed capital projects.
Do not approve the reimbursement resolution and require that bonded debt be issued in advance of the proposed capital projects.