Subject
title
Adoption of a Resolution to Declare the Official Intent of the Mayor and Council to Reimburse Expenditures for Certain Projects from the Proceeds of Tax Exempt Obligations under U.S. Treasury Income Tax Regulation Section 1.150-2
end
Department
Finance
Recommendation
Staff recommends that the Mayor and Council adopt the attached resolution to declare the official intent of the Mayor and Council to reimburse expenditures for certain projects from the proceeds of tax-exempt obligations under U.S. Treasury Income Tax Regulation Section 1.150-2.
Discussion
The Fiscal Year (FY) 2026 Capital Improvements Program anticipates the support of tax-exempt debt in FY 2026 for project expenditures in the Water and Sewer funds. Federal tax law requires that the City declare its official intent to finance specific projects with bond proceeds prior to incurring expenditures that will later be reimbursed.
The proposed resolution accomplishes this declaration. The projects proposed for financing are listed in Exhibit A of the attached resolution.
Adopting this resolution does not mean the City must issue bonds for all of the projects or amounts that are listed. It simply means that if the Mayor and Council decide to issue bonds for any or all of the projects listed, the City will be able to reimburse prior expenditures with the proceeds from the sale of the bonds.
Mayor and Council History
The Mayor and Council adopted a similar resolution on May 6, 2024, for projects to be funded with bond proceeds in FY 2025.
Fiscal Impact
Adoption of the resolution will allow the City to be reimbursed for expenditures on specified capital projects from tax-exempt bond proceeds. This resolution allows the City to borrow up to a maximum of $16,487,344 million for the projects identified.
Next Steps
Staff currently anticipates its next bond issue for FY 2027 and will be working with the Office of the City Attorney, and the City’s bond counsel and financial advisor on these plans.