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HomeMy WebLinkAboutFin Bond Proceeds Expenditure Reimbursement____________________________________________________________________________________ FOR CITY CLERK ONLY File No.: 12-22 Council Meeting: 12/18/2017 Disposition: Resolution 14433 Agenda Item No: 4.f Meeting Date: December 18, 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Finance Prepared by: Mark Moses, Finance Director City Manager Approval: ______________ TOPIC: REIMBURSEMENT OF EXPENDITURES FROM BOND PROCEEDS SUBJECT: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DECLARING INTENTION TO REIMBURSE EXPENDITURES FOR CERTAIN CAPITAL PROJECTS FROM THE PROCEEDS OF TAX EXEMPT OBLIGATIONS RECOMMENDATION: ADOPT RESOLUTION BACKGROUND: Since the City Council approved the Essential Public Safety Facilities Strategic Plan on July 20, 2015, the City Council Finance Committee has received periodic reports from the City’s Financial Advisor, PFM, regarding the construction financing options for the funding of the first three projects: Public Safety Center, Fire Station 52 and Fire Station 57. Thus far, the projects have been funded on a pay as you go basis from a portion of the Measure E Transactions and Use Tax, of which one-third (1/4 percent of the 3/4 percent) of the proceeds have been, and continue to be, dedicated to these projects. The County of Marin also provides a share of the funding for Fire Station 57. The City expects to go the tax-exempt municipal bond market to finance the remainder of the projects in early 2018 at which time all three projects will be well underway. The source of repayment of the bonds will be the City’s General Fund, specifically those Measure E funds set aside by City Council direction. United States Income Tax Regulations generally limit the ability of public agency issuers to reimburse themselves for expenditures made prior to issuance of debt. Depending upon the exact timing of the bond issuance, it may be important to the funding of the projects to finance a portion of the project expenditures incurred prior to bond issuance from the bond proceeds. ANALYSIS: It is common for public agency issuers to adopt a reimbursement resolution prior to or at the time a bond sale is authorized. This is done to allow reimbursement of preliminary costs that precede the adoption of the reimbursement resolution by up to sixty days, and typically occurs contemporaneously with the issuance of debt. In the case of the Essential Public Safety Facilities projects, which have been financed on a pay as you go basis since 2015, there is significant project momentum as the timeframe for issuing debt approaches. Monthly expenditures are projected to exceed $2 million for the first time in December 2017 and approach $3 million in January 2018. With SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2 the growing cash demands of the project, it is prudent to pass a reimbursement resolution. Such a resolution does not obligate the City to reimburse itself for any specific expenditure for which it determines it is not in its interest to do so. FISCAL IMPACT: There is no direct cost associated with the recommended action. The action is recommended only to maintain maximum flexibility with respect to the financing of capital improvements associated with the Essential Public Safety Facilities projects. RECOMMENDED ACTION: Adopt Resolution ATTACHMENT: Resolution RESOLUTION NO. 14433 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DECLARING INTENTION TO REIMBURSE EXPENDITURES FOR CERTAIN CAPITAL PROJECTS FROM THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS WHEREAS, the City of San Rafael (the “City”) intends to issue, or to have the San Rafael Joints Powers Financing Authority issue, tax exempt bonds or certificates of participation (the “Obligations”) in order to provide funds to aid in the construction of the projects described in Exhibit A hereto (the “Projects”); and WHEREAS, United States Income Tax Regulations section 1.150-2 provides generally that proceeds of tax-exempt debt are not deemed to be expended when such proceeds are used for reimbursement of expenditures made prior to the date of issuance of such debt unless certain procedures are followed, one of which is a requirement that (with certain exceptions), prior to the payment of any such expenditure, the issuer declares an intention to reimburse such expenditure; and WHEREAS, the City intends to expend funds for the Projects and to reimburse itself, in whole or in part, from the proceeds of the Obligations; and WHEREAS, the City Council of the City wishes at this time to take the necessary actions to declare its official intent to reimburse the expenditures referenced herein from the proceeds of the Obligations. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Rafael, as follows: Section 1. Issuance of Obligations. The City hereby confirms its intention to issue the Obligations to finance all or a portion of the Projects. Section 2. Reimbursement. The District hereby declares that it may (i) pay certain costs of the Projects prior to the date of issuance of the Obligations and, in such case, (ii) intends to use a portion of the proceeds of the Obligations for reimbursement of expenditures for the Projects that are paid before the date of issuance of the Obligations but not earlier than 60 days prior to the date of adoption of this Resolution. Section 3. Effective Date of Resolution. This Resolution shall take effect from and after the date of its passage and adoption. I, ESTHER C. BEIRNE, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of the City of San Rafael held on the 18th day of December, 2017, by the following vote, to wit: AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin, McCullough & Mayor Phillips NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ESTHER C. BEIRNE, City Clerk EXHIBIT A DESCRIPTION OF THE PROJECTS Replacement of Fire Station 57, located at 3530 Civic Center Drive The new 9,855 square foot, two-story fire station, will remain located at 3530 Civic Center Drive in San Rafael, California, and will house five on-duty fire fighters/paramedics. The new station is designed to accommodate six on-duty personnel should additional staffing be required to better serve the community. The core elements of the new station include three drive-through apparatus bays, apparatus support spaces, public lobby, accessible restroom, office, kitchen, dining, dayroom, laundry room, private sleeping quarters, unisex restrooms, mechanical, electrical, communications rooms and staff parking. Other notable site/adjacent improvements include access aprons and sidewalk replacement along Civic Center Drive, median(s) in front of the station on Civic Center Drive will be modified to align with the new apparatus bay location, a “keep clear” zone will be striped in front of the apparatus bay apron on Civic Center Drive. Prior to the commencement of demolition activity, and in order to maintain uninterrupted service to the community, personnel and equipment from Fire Station 57 were relocated to Fire Station 53 at 30 Joseph Court, San Rafael, California. Modest modifications to Fire Station 53 were implemented as part of the relocation effort. Replacement of Fire Station 52, located 210 3rd Street The new 10,973 square foot, two-story fire station, will remain located at 210 Third Street, San Rafael, California, and will house five on-duty fire fighters. The new station is designed to accommodate six on-duty personnel should additional staffing be required to better serve the community. The core elements of the new station include three drive-through apparatus bays, apparatus support spaces, public lobby, accessible restroom, office, kitchen, dining, dayroom, laundry room, private sleeping quarters, unisex restrooms, mechanical, electrical, communications rooms and staff parking. Other notable site/adjacent improvements include a second new structure will be a four-story training tower. The new 3,322 square foot, 46’ high, pre-engineered building will be located at the south/east corner of the site and will provide a variety of training scenario opportunities, not only for SRFD, but also for other neighboring fire departments. Finally, the third new building on the site will be a 1,297-square foot, 24-person, training classroom. The facility will serve as a training academy by day and will be utilized in the evening for certification training/meetings, CPR classes, and other fire prevention functions. Construction of Public Safety Center – 5th Avenue between C Street and D Street The project is a new, 44,000-square-foot Public Safety Center for fire, police and emergency services to replace the existing Fire Station 51 (Downtown Fire Station). The project includes a subterranean garage, public plaza and associated site and landscaping improvements. STAFF REPORT APPROVAL ROUTING SLIP Staff Report Author: Mark Moses Date of Meeting: 12/18/2017 Department: Finance Topic: REIMBURSEMENT OF EXPENDITURES FROM BOND PROCEEDS Subject: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL DECLARING INTENTION TO REIMBURSE EXPENDITURES FOR CERTAIN CAPITAL PROJECTS FROM THE PROCEEDS OF TAX EXEMPT OBLIGATIONS Type: (check all that apply) ☒ Consent Calendar ☐ Public Hearing ☐ Discussion Item ☐ Resolution ☐ Ordinance ☐ Professional Services Agreement ☐ Informational Report *If PSA, City Attorney approval is required prior to start of staff report approval process Was agenda item publicly noticed? ☐ Yes ☒No Date noticed: ☐Mailed ☐Site posted ☐Marin IJ Due Date Responsibility Description Completed Date Initial / Comment DEPARTMENT REVIEW FRIDAY noon 12/1 Director Director approves staff report is ready for ACM, City Attorney & Finance review. 10/16/2017 ☒ MM CONTENT REVIEW MONDAY morning 12/4 Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will review items, make edits using track changes and ask questions using comments. Items will be returned to the author by end of day Wednesday. Click here to enter a date. 12/4/2017 10/23/2017 ☒ ☒ LG ☒ MM DEPARTMENT REVISIONS FRIDAY noon 12/8 Author Author revises the report based on comments receives and produces a final version (all track changes and comments removed) by Friday at noon. Click here to enter a date. ☒ ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL MONDAY morning 12/11 Assistant City Manager City Attorney Finance ACM, City Attorney & Finance will check to see their comments were adequately addressed and sign-off for the City Manager to conduct the final review. Click here to enter a date. 12/12/2017 11/13/2017 ☒ ☒ LG ☒ MM - Cristine wants to hold this until Dec 18 TUES noon 12/12 City Manager Final review and approval 12/13/2017 ☒ JS CITY OF SAN RAFAEL NOTICE OF PUBLIC HEARING CONSIDERATION OF AN ORDINANCE OF THE CITY OF SAN RAFAEL APPROVING EXECUTION OF A SITE LEASE AND A LEASE AGREEMENT RELATING TO THE SAN RAFAEL JOINT POWERS FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2018 (PUBLIC SAFETY FACILITIES PROJECT) AND THE FINANCING OF CERTAIN PUBLIC SAFETY FACILITIES LOCATED IN THE CITY DATEfTIME: LOCATION: PURPOSE: Tuesday, January 16, 2018 at 7:00 p.m. City Council Chambers, 1400 Fifth Avenue, San Rafael, CA To receive public comments and consider introduction of an ordinance approving a Site Lease and a Lease Agreement between the City of San Rafael and the San Rafael Joint Powers Financing Authority (SRJPFA), in connection with a proposal for the SRJPFA to issue bonds for the purpose of raising funds necessary to finance the construction of the City's new public safety center and two replacement fire stations Under the Site Lease, the City would lease to the SRJPFA certain real property and improvements, initially consisting of the City's new public safety facility, the City's Fire Station 52, and the City's Fire Station 57, including land and improvements thereon. Under the Lease Agreement, the SRJPFA would lease the same property back to the City in consideration for payment of rent by the City. The SRJPFA proposes to authorize issuance of Lease Revenue Bonds, Series 2018 (Public Safety Facilities Project) and to use the lease payments to pay debt service on the bonds. IF YOU CANNOT You may send a letter to Esther Beirne, City Clerk, City of San ATTEND: Rafael, P.O. Box 151560, San Rafael, CA 94915-1560. You may also hand deliver a letter prior to the meeting. FOR MORE INFORMATION: You may contact Mark Moses, Finance Director, at (415) 458-5018 for more information, Monday through Friday, 8:00 a.m. to 5:00 p.m. SAN RAFAEL CITY COUNCIL lsi Esther Beirne ESTHER BEIRNE CITY CLERK, CITY OF SAN RAFAEL American Sign Language interpreters and assistive listening devices may be requested by calling (415) 485-3198 (TOO) or (415) 485-3085 (Voice) at least 72 hours in advance. Copies of documents are available in accessible formats upon request. Public transportation is available through Golden Gate Transit, Line 20 or 23. Paratransit is available by calling Whistlestop Wheels at (415) 454-0964. To allow individuals with environmental illness or multiple chemical sensitivity to attend the meeting/hearing, individuals are requested to refrain from wearing scented products. (Please publish in the Marin Independent Journal on Friday, January 5, 2018.)