Adopt Resolution #15-02-051 Resolution Establishing Procedures Relating to Compliance With Reimbursement Bond Regulations Under the Internal Revenue Code

Purpose:  The City will be issuing Road Reconstruction debt in late May to fund the construction of Garnet Street/168th Avenue and bituminous overlays.  A reimbursement resolution allows the city to pay itself back for any funds expended prior to receiving bond funds.

Background:  The authorization of bids for the construction of Garnet Street and 168th Avenue will not be brought forward to City Council until May 26, 2015 and Bituminous Overlay bids in June.  Until these stated times of authorization, the city could experience costs related to such items as legal, engineering, publishing, etc. These soft costs were calculated into the total project costs of the road projects in determining the bonding amount. 
 
As the city will be expending funds prior to receiving the bond funds (proposed funding mechanism), the city is only allowed to "reimburse" itself if it has a bond reimbursement resolution in place.

 

The resolution that is attached was drafted by the city's bond council of Briggs & Morgan.  The reimbursement incorporates all of the reimbursement requirements as mandated by the IRS.

The adoption of this resolution does NOT obligate the City to pay for the soft costs with the bond funds.  This resolution simply ALLOWS the City to reimburse itself if so chooses and as stated, these costs were included in the total project costs to be bonded.

Funding for the construction of Garnet Street/168th Avenue and bituminous overlays is proposed to be funded from the issuance of
Street Reconstruction Plan bonds.

Recommendation is to approve the attached Reimbursement Resolution #15-02-051.

Adopt Resolution #15-02-051 Establishing Procedures Relating to Compliance with Reimbursement Bond Regulations Under the Internal Revenue Code (Allows the City to pay itself back for expenditures prior to receiving bond funds).