Loading...
Res 2019-12 Interfund Loan Locke Park Water Treatment PlantRESOLUTION NO. 2019 - 12 A RESOLUTION AUTHORIZING AND APPROVING AN INTERFUND LOAN FOR THE LOCKE PARK WATER TREATMENT PLANT IMPROVEMENT PROJECT; AND ESTABLISHING COMPLIANCE WITH APPLICABLE BOND REIMBURSEMENT REGULATIONS BE IT RESOLVED, by the City Council (Council) of the City of Fridley, Minnesota (City) as follows: Section 1. Background. 1.01. On February 25, 2019, the Council authorized the creation of a Community Investment Fund — No. 450 (CI Fund) to support capital costs associated with the parks and public utilities maintained by the City, effective December 31, 2018. 1.02. Section 7.10 of the City Charter (Charter) requires the Council to adopt a resolution stipulating the structure and terms of any interfund loan. 1.03. The City shall issue an Interfund Loan (Loan) from the CI Fund to the Water Utility Fund — No. 601 (Utility Fund) to support the design, engineering, construction and other reasonable expenditures related to the Locke Park Water Treatment Improvement Project (Project), including any other activities included in Exhibit A. 1.04. The Utility Fund shall repay the CI Fund from revenues provided by utility rates and charges as determined by the Council, consistent with Section 11.02 of the Charter, or from bond proceeds issued by the City and payable from the Utility Fund, consistent with Section 7.02 and 7.12 of the Charter. Section 2. Authorization and Approval of the Loan. 2.01. The Council herby authorizes and approves the Loan from the CI Fund to the Utility Fund per the terms stipulated in Section 2.02. 2.02. The Utility Fund shall repay the Loan from the CI Fund as outlined below. Principal: Interest Rate: Loan Term: Annual Payment Amount: First Payment Due: Final Payment Due: Up to $3,600,000 3.00% Up to 10 Years Up to $422,030 December 31, 2020 December 31, 2029 Resolution No. 2019 —12 Page 2 2.03. The City shall administratively modify the Principal and Annual Payment Amount as listed above upon completion of the Project based on the actual expenditures as determined by the City Manager, and consistent with the eligible project activities as described in Section 1.03. These administrative modifications may not exceed the any of the Loan terms outlined in Section 2.02. 2.04. The outstanding Principal and all accrued interest payable under the Loan are pre— payable in whole or in part at any time by the Utility Fund without premium or penalty. No partial pre payment shall affect the amount or timing of any other regular payment otherwise required to be made under this Loan. 2.05. The City may amend the terms of the Loan as described in Section 2.02 at any time by a resolution of the Council, including a determination to forgive the outstanding principal amount and accrued interest to the extent permissible under law and Section 7.10 of the Charter. Section 3. Official Intent Declaration (Declaration). 3.01. The City reasonably intends to make expenditures for the projects described in Exhibit A, and may reimburse itself for such expenditures from the proceeds of debt to be issued by the City in the maximum principal amount described in Exhibit A. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Treasury Regulations, Section 1.150-2(d)(3) under the Internal Revenue Code of 1986 (Reimbursement Regulations). 3.02. This Declaration has been made not later than 60 days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of $100,000 or 5 percent of the proceeds of an issue; or (c) "preliminary expenditures" up to an amount not in excess of 20 percent of the aggregate issue price of the issue or issues that finance or are reasonably expected by the City to finance the project for which the preliminary expenditures were incurred. The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction Resolution No. 2019 —12 Page 3 3.03. This Declaration is an expression of the reasonable expectation of the City based on the facts and circumstances known to the City as of the date hereof. The anticipated original expenditures for the Project and the principal amount of the bonds described in Exhibit A are consistent with the City's budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City or use of the CI Fund are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the City's budget or financial policies to pay such project expenditures. 3.04. This resolution is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations and any successor law, regulation, or ruling. Section 4. Effective Date. 4.01. This resolution shall be effective upon the date of its approval. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 25TH DAY OF MARCH, 2019. SCOTT J. LUND - MAYOR ATTEST: DEBRA A. SKOGEN - CITY CLERK Resolution No. 2019 —12 EXHIBIT A Page 4 Declaration Date Project Description Maximum Principal Debt Amount March 11, 2018 Locke Park Water Treatment Plant $3,600,000 Improvement Project, including but not limited to: construction of improvements and indirect costs, such as legal, engineering, administrative, right—of—way acquisition and financing costs; and engineering costs including surveying, feasibility study, environmental documentation, permitting, preliminary and final design, preparation of plans and specifications, bidding administration, construction management, staking, inspection and material testing.