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HomeMy WebLinkAboutReg 2019-05-20 Item 4G - Resolution - Appointing Finance Director to Designate Certain Expenditures for Reimbursement from Bond ProceedsCOUNCIL AGENDA &SYNOPSIS Initials- -- Meeting Date Prepared by Ma ore review Council review 05/20/19 Vicky 14 ITEM INFORMATION ITEM No, 4.G. ST1F1-; SPONSOR: VICKY CARLSEN ORIGINAL AGENDA DATE:5/20/19 AGENDA ITEM TITLE Adopt reimbursment Resolution appointing finance director to designate certain expenditures for from bond proceeds CATEGORY E Discussion Meg Date Motion Date 0 Resolution El Ordinance El Bid _Award Mtg Date E Public Hearing Mtg Date D Other Mtg Date Mtg Mtg Date 5/20/19 Mtg Date SPONSOR Council EMayor EHR DDCD V1Fzeance EjFzre [TS DP&K L1Polue IIPW DCourt SPONSOR'S Council is being asked to approve a resolution that would appoint the finance director to SUMMARY designate capital project expenditures to be reimbursed from bond proceeds REVIEWED BY El C.O.W. Mtg. E CDN Comm i: Trans &Infrastructure fl Arts Comm. DATE: 5/13/19 ri Finance Comm. 0 Public Safety Comm. Comm. El Planning Comm. CHAIR: MCLEOD El Parks COMMITTEE RECOMMENDATIONS: SPONSOR/ADMIN. COMMITME Finance Unanimous Approval; Forward to Consent Agenda COST IMPACT / FUND SOURCE EXPENDITURE REQUIREAMOUNT BUDGETED APPROPRIATION REQUIRED $ $ $ Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION MTG. DATE ATTACHMENTS 5/20 9 Informationale orandum dated 5/8/19 (Updated after Finance Committee) Draft Resolution Minutes o the Finance Committee meeting of 5/ 9 101 102 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Council Committee FROM: Vicky Carlsen, Finance Director CC: Mayor Ekberg DATE: May 8, 2019 SUBJECT: Appoint Finance Director to designate expenditures for reimbursement from bond proceeds Updated afterMaj 13,2019ggFinance Committee r testincg. ISSUE The proposed resolution would appoint the Finance Director to designate certain expenditures for reimbursement from bond proceeds. BACKGROUND Major high -cost capital projects that are not paid for with grants or dedicated revenue sources are often financed with bond proceeds. The City Council approves the capital project through two processes; (1) the budget or budget amendment process, and (2) the issuance of debt to fund the project. Shortly after the project is approved by City Council, departments can, and often do, incur costs associated with the project. These costs typically include planning and design and usually qualify to be covered by bond proceeds. However, it can take three to four months to go through the full legislative process to incur debt and receive the bond proceeds. In order to ensure that expenditures incurred prior to the receipt of bond proceeds can be reimbursed with bond proceeds, Council approves a reimbursement resolution that is specific to the project. Once a reimbursement resolution is approved, expenditures occurring up to 60 days prior to approval of the resolution can be reimbursed with the bond proceeds. This reimbursement resolution is typically included in the same legislative cycle and process to issue debt related to the capital project. DISCUSSION In order to streamline the process to finance certain capital projects with bond proceeds, staff is recommending approval of a resolution that would designate the Finance Director as the official responsible for issuing a statement of official intent to reimburse qualifying expenditures with issuance of debt; including bonds, notes, and leases. Approving this resolution would eliminate one step for future capital projects that are financed with debt proceeds. It is imRortantWeto note that this proposal does notpreµemptwethe City Council's legislative decision I akung duthority. The city. Council approves all capital _projects and debt issuancesintwo separate ste1psand neither of these pr ocessesewwill change. 103 INFORMATIONAL MEMO Page 2 RECOMMENDATION Council is being asked to forward this resolution to the May 20, 2019 Regular Meeting Consent Agenda. ATTACHMENTS Draft Resolution 104 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, APPOINTING THE FINANCE DIRECTOR FOR THE PURPOSE OF DESIGNATING CERTAIN EXPENDITURES FOR REIMBURSEMENT FROM BONDS THAT MAY BE AUTHORIZED AND APPROVED BY THE CITY FOR ISSUANCE IN THE FUTURE. WHEREAS, the City of Tukwila, Washington (the "City") issues tax-exempt obligations, including bonds, notes, and leases from time to time for the purpose of financing its governmental activities; and WHEREAS, the United States Department of the Treasury has promulgated Regulations limiting the ability of the City to use the proceeds of tax-exempt obligations for reimbursement of prior expenditures; and WHEREAS, 26 C.F.R. Section 1.150-2 of the Regulations permits the City to appoint one or more officials for the purpose of identifying and qualifying capital projects for reimbursement purposes; and WHEREAS, any such declaration of official intent to reimburse must not be made as a matter of course or in an amount substantially in excess of the amount expected to be necessary for the proposed project; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The City Council hereby appoints and designates the Finance Director a "Designated Official," as the official responsible for issuing statements of official intent in compliance with Treasury Regulation 26 C.F.R. Section 1.150-2. Section 2. Upon a determination by the Designated Official that the costs of a particular capital project may be reimbursed from the proceeds of tax-exempt obligations of the City, the Designated Official is authorized and directed to execute a certificate of official intent, substantially in the form attached hereto as Exhibit A. Each W:\Legislative Development\Finance Director as Designated Official re Bond expenditures 4-15-19 VC:bjs Review and analysis by Barbara Saxton Page 1 of 2 105 certificate so executed shall become a part of the official records of the City available for public inspection and review. Section 3. This resolution will take effect from and after its adoption as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2018. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Kathy Hougardy, Council President APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Resolution Number: Pacifica Law Group LLP, Bond Counsel Attachment A: Exhibit A —Form of Official Intent Certificate W:\Legislative Development\Finance Director as Designated Official re Bond expenditures 4-15-19 VC:bjs Review and analysis by Barbara Saxton 106 Page 2 of 2 EXHIBIT A FORM OF OFFICIAL INTENT CERTIFICATE Pursuant to Resolution No. of the City Council of the City of Tukwila, Washington (the "City"), the undersigned, Finance Director of the City, hereby states as follows: Section 1. The undersigned is a "Designated Official" of the City as defined in Resolution No. for the purposes of this Official Intent Certificate. Section 2. The City reasonably expects to reimburse the expenditures described herein with the proceeds of debt to be incurred by the City (the "Reimbursement Bonds"). Section 3. The maximum principal amount of Reimbursement Bonds expected to be issued is $ Section 4. The expenditures with respect to which the City reasonably expects to be reimbursed from the proceeds of Reimbursement Bonds will be made from the City's [name of fund or account] for project costs related to the City's [description of the project]. Dated this day of , 20 Name Title 107 108 City of Tukwila City Council Finance Committee FINANCE COMMITTEE Meeting Minutes May 13, 2019 - 5:30 p.m. - Hazelnut Conference Room, City Hall Councilmembers: Thomas McLeod, Chair; Verna Seal, De'Sean Quinn Staff: David Cline, Vicky Carlsen, Jeff Friend, Bruce Linton, Jay Wittwer, Laurel Humphrey CALL TO ORDER: Chair McLeod called the meeting to order at 5:30 p.m. I. PRESENTATIONS II. BUSINESS AGENDA A. Resolution: Appointing the Finance Director as Designated Official for Bond Expenditures Staff is seeking Council approval of an ordinance that will appoint the Finance Director to designate certain expenditures for reimbursement from bond proceeds. This step currently requires a reimbursement resolution to be adopted by Council, so this will streamline the process by designating the Director to be responsible for issuing a statement of official intent to reimburse qualifying expenditures with issuance of debt. The City Council will still retain its authority to approve the capital project and to issue debt to fund the project. The Committee requested that the memo include additional language to clarify this point. UNANIMOUS APPROVAL. FORWARD TO MAY 20, 2019 REGULAR CONSENT AGENDA. B. March 2019 Departmental Budget-to-Actuals Report Staff presented the Committee with the March 2019 Financial Report, which describes the general state of departmental expenditures and highlights significant trends. General Fund expenditures totaled $16.4 million as compared to the allocated budget of $17.9 million. The allocated budget reflects year-to-date spending patterns of the previous year. 11 of 14 General Fund departments were under their allocated budget. Fire, Street Maintenance & Operations, and Community Development have overages due to pipeline positions and overtime costs, February snow events, and structural code compliance review respectively. Councilmember Quinn asked that the memo be updated to reflect the actual cost associated with the four unbudgeted pipeline positions. The Committee will be presented with a more in-depth review of the Fire Department budget at its next meeting. DISCUSSION ONLY. 109