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HomeMy WebLinkAboutReg 2014-04-07 Item 5D - Resolution - Reimbursement from Bond Proceeds for Interurban Avenue South ProjectCOUNCIL AGLNDA SYNOPSIS Initials MeetingDate Prepared / Mayorr rqien, Council review 04/07/14 PMC ITEM INFORMATION ITEM No. 5.D. 23 STAIT SPONSOR: PEGGY MCCARTHY ORIGINAL AGENDA DATE: 02/24/14 AG FINDA Priw TITLE Resolution declaring intent to reimburse the City from bond proceeds CATHGORY Discussion Mt Date L Motion Mt,gDate Z Resolution Mtg Date 04/07/14 Ordinance Mtc Date Bid Award Mtg Date _ Public. Hearing Mtg Date _ Other Mt,gDate SPONSOR Council Mayor C I-IR _ DCD Finance _ Fire IT PR _ Police _ Inv SPONSOR'S Resolution declaring intent to reimburse the City from bond proceeds for certain original SUMMARY expenditures related to the Interurban Avenue South Project - Project No. 90310402. RENA' W(71,1) BY COW Mtg. _ CA&P Cmte Utilities Cmte El] Arts Comm. DATE: 03/18/14 III F&S Cmte ] Transportation Cmte Comm. _ Planning Comm. CI-LAIR: SEAL Parks COMMITTEE RECOMMENDATIONS: SPONSOR/ADMIN. CommITTIT Finance Unanimous Approval; Forward to Consent Agenda COST IMPACT / FUND SOURCE EXPUNDITURU RHQUIRFD AMOUNT BUDGETED APPROPRIATION REQUIRED $0 $0 $0 Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 04/07/14 MTG. DATE ATTACHMENTS 04/07/14 Informational Memorandum dated 03/12/14 Resolution in Draft Form Minutes from the Finance and Safety Committee Meeting of 3/18/14 23 24 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton Finance & Safety Committee FROM: Peggy McCarthy, Finance Director BY: Vicky Carlsen, Deputy Finance Director DATE: March 12, 2014 SUBJECT: Resolution declaring intent to reimburse the City from bond proceeds ISSUE Approve Resolution declaring intent to reimburse the City from bond proceeds for certain original expenditures related to the Interurban Avenue South Project — Project No. 90310402 (Project). BACKGROUND The Project consists of design and construction of sidewalks, pavement restoration, drainage and lighting in Interurban Avenue South (S 143rd St — Fort Dent Way). The Project combines federal, state, local, bonds, and City funds for total project costs of $11,6 million. Final design was completed in 2013 with construction scheduled to begin in 2014. DISCUSSION A resolution declaring intent to reimburse the City from proceeds of bonds is necessary because the project is going to bid soon but bonds will not be sold until the fall of 2014. With this resolution in place, the City will be able to be reimbursed certain costs incurred prior to when the bonds are sold. While the Resolution states that the declaration of intent is made no later than 60 days after payment of original expenditure for the Project, the IRS does allow an exception for preliminary expenditures. Preliminary expenditures that can be reimbursed include architectural, engineering, surveying, soil testing, and similar costs incurred prior to commencement of acquisition, construction, or rehabilitation of the project other than land acquisition, site preparation, and similar costs incidental to commencement of construction. To date, the City has expended funds on design work, land purchase, and staff time, Total cost incurred that can be reimbursed is approximately $371K. The City anticipates selling a maximum of $3.5 million in bonds in the fall of 2014. RECOMMENDATION Council is being asked to approve the resolution declaring intent to reimburse the City from bond proceeds for the Interurban Avenue South Project and forward this item on the Consent Agenda at the April 7, 2014 Regular Meeting. ATTACHMENTS Draft Resolution 25 26 City of Tukwila Washington Resolution No. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, EXPRESSING OFFICIAL INTENT, PURSUANT TO TREASURY REGULATION SECTION 1.150-2, TO REIMBURSE THE CITY FROM THE PROCEEDS OF BONDS FOR CERTAIN ORIGINAL EXPENDITURES PAID IN CONNECTION WITH CERTAIN ARTERIAL STREET FUND PROJECTS; AND DESIGNATING AN AUTHORIZED REPRESENTATIVE TO MAKE DECLARATIONS OF OFFICIAL INTENT ON BEHALF OF THE CITY. WHEREAS, the City of Tukwila, Washington (the "City"), intends to make expenditures for the Project (identified below) from funds that are available but that are not, and are not reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside for those expenditures, and reasonably expects to be reimbursed for those expenditures from proceeds of bonds or other obligations issued to finance those expenditures; and WHEREAS, it is the intent of the City to pay certain capital expenditures incident to the acquisition and construction of the Project to be financed by the proceeds of the bonds from other funds of the City pending the sale and delivery of the bonds and the receipt of the proceeds thereof, and the City reasonably expects to reimburse the funds of the City from the proceeds of such bonds; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Description of Project for which Expenditures are to be made. This declaration of intent is made no later than 60 days after payment of the original expenditure for the Project. The Project is described as the Interurban Avenue South Project—a design and construction of sidewalks, pavement restoration, drainage, and lighting project at South 143rd Street and Fort Dent Way, Project No. 90310402—the "Project"). W:\Word Processing\Resolutions\Bond proceeds to reimburse for Interurban Ave Project 3-10-14 VC:bjs Page 1 of 2 27 28 Section 2. Maximum Principal Amount of Obligations Expected to be Issued for the Project The City expects that the maximum principal amount of bonds that will be issued to finance the Project will be three million five hundred thousand dollars ($3,500,000). Section 3. Declaration Reasonable. The City Council has reviewed its existing and reasonably foreseeable budgetary and financial circumstances and has determined that the City reasonably expects to reimburse itself for expenditures for the Project from proceeds of bonds because the City has no funds available that already are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside by the City for those expenditures on the Project. Section 4. Limitations on Uses of Reimbursement Amounts. For one year after the allocation of proceeds, the City will not use amounts corresponding to proceeds received from bonds issued in the future to reimburse the City for previously paid expenditures for the Project in any manner that results in those amounts being treated as replacement proceeds of any tax exempt bonds, i.e., as a result of being deposited in a reserve fund, pledged fund, sinking fund or similar fund other than a bona fide debt service fund that is expected to be used to pay principal of or interest on tax exempt bonds. The City will not use said amounts in any manner that employs an abusive arbitrage device to avoid arbitrage restrictions. Section 5. Designation of Authorized Representative. The Finance Director is hereby designated as the authorized representative of the City to declare in writing, in such form as may be approved by the City Council, the official intent of the City to reimburse original expenditures for the Project from proceeds of debt to be issued for purposes of and in accordance with Treasury Regulation Section 1.150-2. Section 6. Implementation. The Finance Director is hereby authorized to implement such administrative procedures as may be necessary to carry out the directions of this legislation. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2014. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk De'Sean Quinn, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Shelley M. Kerslake, City Attorney W:\Word Processing\Resolutions\Bond proceeds to reimburse for Interurban Ave Project 3-10-14 VC:bjs Page 2 of 2 Finance & Safety Committee Minutes March 18, 2014 — Page 2 B. Ordinances: Fire Code, Fire Sprinkler, and Fire Alarm. Staff is seeking Council approval of ordinances to amend Tukwila Municipal Code Chapters 16.16 (International Fire Code), 16.40 (Fire Alarm Systems), and 16.42 (Sprinkler Systems), with notable changes summarized as follows: • Adoption of the 2012 International Fire Code with certain exceptions and amendments applicable to Tukwila; • New language addressing adequate emergency service response capability with regard to automated entry gates and traffic calming devices; • Requirement for construction documentation for the installation of liquid propane containers holding more than 250 gallons; • Added section requiring standby personnel in the event of problematic systems or systems out of service; • New short term permit fee of $25.00 for food vendors desiring to use liquid propane or open flame cooking at events not exceeding three consecutive days; Added language designed to aid contractors with interpretations and installation guidelines for alarm systems; • New requirement for attic heat detection; • Outline of an appeals process involving the City Hearing Examiner; • Corrections relating to residential fire sprinklers; • Other clarifications and non - substantive housekeeping items as shown in markup. Committee members asked clarifying questions and were supportive of the proposed ordinances moving forward. UNANIMOUS APPROVAL. FORWARD TO MARCH 24, 2014 COMMITTEE OF THE WHOLE. C. Resolution: Reimbursement from Bond Proceeds for Interurban Avenue South Project Staff is seeking Council approval of a Resolution that declares intent to reimburse the City from bond proceeds for certain expenditures related to the Interurban Avenue South Project. This project consists of design and construction of sidewalks, pavement restoration, drainage and lighting in Interurban Avenue South between South 143rd Street and Fort Dent Way, funded by a combination of federal, state, bonds and City funds for a total of $11.6 million. Final design was completed in 2013 and construction is scheduled for this year. The project is going to bid soon but the bonds will not be sold until this fall, and with this Resolution in place, the City can be reimbursed certain costs. The City anticipates selling a maximum of $3.5 million in bonds. UNANIMOUS APPROVAL. FORWARD TO APRIL 7, 2014 CONSENT AGENDA. D. 2013 4th Quarter Cash and Investment Report Staff presented the 4th Quarter Cash and Investment Report for 2013, including information on the City's portfolio components, performance, policy compliance and liquidity analysis, fund cash and investment balances, and investment environment. At December 31, 2013, the portfolio totaled $46.5 million comprised of $39.6 million in cash and cash equivalents and $6.9 in longer term investments. This represents a $9 million increase from the December 31, 2012 balance of $37.5 million, due in part to the sale of bonds for Local Improvement District No. 33. INFORMATION ONLY. 29