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Home My WebLink About38-03 RESOLUTION• • • RESOLUTION NO. 38-03 A RESOLUTION EXPRESSING THE INTENT OF THE CITY OF FAYETTEVILLE, ARKANSAS, TO REIMBURSE CERTAIN EXPENDITURES OF THE CITY PERTAINING TO THE FINANCING AND ACQUIRING OF CERTAIN CAPITAL EXPENDITURES WITH THE PROCEEDS OF AN ISSUE OR ISSUES OF TAX-EXEMPT BONDS OR TAX EXEMPT LEASES TO BE ISSUED BY THE CITY; AND STATING OTHER MATTERS PERTAINING THERETO WHEREAS, the City of Fayetteville, Arkansas, (the "City") intends to utilize financing provisions authorized in the various amendments to the Arkansas Constitution (Amendment 62, Amendment 65 and Amendment 78) to acquire certain capital equipment for use by the Fayetteville Fire Department and Fayetteville Solid Waste Division (Acquisition Program); and WHEREAS, the City presently intends to finance the costs of planning, designing, acquiring, constructing, and equipping of some of the capital equipment purchases through the issuance of one or more series of tax-exempt bonds or through the issuance of one or more tax exempt capital lease agreements of the City (the "Bonds/Leases"); and WHEREAS, the City has determined the need to expend its funds to pay certain costs associated with this Acquisition Program prior to the issuance of the Bonds/Leases, and WHEREAS, in order to utilize the proceeds of tax-exempt bonds to reimburse original expenditures made by the City with respect to the Acquisition Program, it is necessary under the Internal Revenue Code of 1986, as amended (the "Code") and the U.S. Treasury Regulation Section 1.150-2 that the City make a present declaration of its official intent to make such reimbursement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City intends to issue its Bonds/Leases in one or more series in aggregate principal amount not to exceed $10 million under the constitution and laws of the State of Arkansas to finance a portion of the costs of planning, designing, acquiring, constructing, and equipping the Acquisition Program. Section 2. That the City intends to utilize a portion of the proceeds of the Bonds/Leases to reimburse itself for certain expenditures made by the City prior • �. Page 2 Res. No. 38-03 to the issuance of the Bonds with respect to the planning, designing, acquiring, constructing, and equipping of the Acquisition Program. Section 3. That the City intends this resolution to be its declaration of "official intent" under the Code and U.S. Treasury Regulation Section 1.150-2 to reimburse certain original expenditures with respect to the Acquisition Program. PASSED and APPROVED this the 18th day of March, 2003. t II -, • i• is ► • ties • u.e an r: e i a ;, Al'•TES'I° Sondra Smith, City Clerk APPROVED: By: A COODY, Mayor NAME OF FILE: CROSS REFERENCE: Item # Date • Resolution No. 38-03 Document • 1 03/18/03 Res. 38-03 2 02/14/03 Staff Review Form w/attachments: 2/23/03 memo to mayor/city council draft resolution 3 03/20/03 memo to Steve Davis NOTES: FAYETTEdi LLE THE CITY OF EAYETTEVINE. ARKANSAS DEPARTMENTAL CORRESPONDENCE • To: Steve Davis Finance & Internal Services ,�d�pp From: Clarice Buffalohead-Peamian City Clerk Division Date: 3/20/2003 Re: Res. No. 38-03 Attached please find an executed copy of the above resolution passed by the City Council on March 18, 2003, expressing the intent of the city to reimburse certain expenditures of the city pertaining to the financing and acquiring of certain capital expenditures with the proceeds of an issue or issues of tax-exempt bond or leases issued by the city. If anything else is needed please let the city clerk's office know. /cbp cc Nancy Smith, Intemal Auditor • XX AGENDA REQUEST CONTRACT REVIEW GRANT REVIEW • STAFF REVIEW FORM For the Fayetteville City Council Meeting of: • i8 Marctyt; 2003 Ess 3/is 38-63 FROM: Stephen Davis Name Finance & Internal Services Dir. Finance & Internal Services Division Department ACTION REQUIRED: Approval of the Resolution Of Intent to Reimburse for bond issue(s) and lease agreement(s) for 2003. COST TO CITY: No cost with this item Cost of this request Account Number Project Number Not Appicable Funds Used to Date Not Applicable Remaining Balance Program Category / Project Name Program / Project Category Name Fund Name N/A Budgeted Item 2 t/'O3 Date Budget M4&fSager Budget Adjustment Attached CONTRACT/GRANT/LEASE REVIEW: fha LiciA Accounting Man ger City Attorney a/dyieteo3 Da (14c4nMZTD Internal ^t` l/aQ� ^ 41y4i 1 �.1"^Q Date ditor Purchasing Manager D`.' ate a(pIC) 3 Date STAFF RECOMMENDATION: Staff recommends approval of resolution. Cross Reference Division Head New Item: Department Director E4 `dtrTh Finance & Intern- Services Dir. /.iii / AKA A /1 Chie•i •ministr. ive :f 44—af / icer Mayor A:\Resolution of Inte to imburse Date Date Date Date Yes Previous Ord/Res#: Orig. Contract Date Orig. Contract Number No 2/24/2003 Description • • Staff Review Form - Page 2 Comments: Budget Manager Accounting Manager City Attorney Purchasing Manager ADA Coordinator Internal Auditor Grants Coordinator Meeting Date March 4, 2003 Reference Comments: A:\Resolution of Intent to Reimburse 2/24/2003 FAYETTEEIVILLE THE CITY OF FAYETTEVILLE, ARKANSAS DEPARTMENTAL CORRESPONDENCE • TO: Mayor Dan Coody and Fayetteville City Council THROUGH: Hugh Earnest, Chief Administrative Officer FROM: Stephen Davis, Financc & Internal Services Director DATE: February 23, 2003 SUBJECT: Bond/Lease Program: Approval of Resolution of Intent to Reimburse Background The Citizens of Arkansas approved, at the General Election in 2000, Amendment 78 to the Arkansas Constitution. Amendment 78 provides, in part, authorization for cities to enter into short -tem bond issues and capital lease agreements that are supported by the general revenues of the city. City Councils are authorized to execute these debt instruments without a public vote. The Arkansas Constitution limits the debt to no more than five (5) years and to no more than five (5%) per cent of the assessed value of taxable property within the city. The City of Fayetteville approved a Debt Management Policy on November 5, 2002 (Resolution 173-02) that established the policy and underlying analysis that must be completed prior to initiating any debt agreements. On November 7, 2002 the City of Fayetteville advertised and solicited requests for qualifications (RFQ) for Bond Counsel Services and solicited requests for proposals (RFP) for Underwriter Services and Leasing Services. The City of Fayetteville Debt Committee (established by Resolution 173-02) received the responses to the request for qualifications and request for proposals in January, 2003. The Debt Committee selected Gordon Wilboum of Kutak Rock as Bond Counsel, Dennis Hunt of Stephens, Inc and Crews and Associates as Bond Underwritcr(s) and Bank of America (BOA) Leasing for leasing services. Agreements with each of these service providers will be developed and submitted to City Council for consideration and approval. Discussion The Fayetteville Fire Department and Fayetteville Solid Waste Division have identified the need to replace fire fighting apparatus and solid waste vehicles. Both of these asset replacements lend themselves to tither the short-term bond program options or capital lease options available through Amendment 78. Staff proposes to use BOA Leasing to develop a multi-year fire apparatus purchasing program. The City's Five Year Capital Improvement Program currently has planned on replacing two fire K:\Steve Davis\Bond_Icase Program_Resolurion of Intent to Rcimbursc.doc • • apparatus. The need exists for four units in 2003. Three of the units will be replacing current, front line fire fighting apparatus and the fourth unit will be an expansion apparatus for Fire Station Seven. Manufacturers of fire apparatus equipment generally require payment for the chassis at the time of placing the order. Approval of the Resolution of Intent to Reimburse will enable the City to pay for the chassis and when the completed fire apparatus is accepted, submit invoices to BOA Leasing for reimbursement. BOA Leasing will, in -turn, develop a lease payment schedule of no more than five years that accumulates all of the cost associated with the fire apparatus acquisition program. The funds to make the annual lease payments will be from a portion of the City sales tax dedicated for capital improvements. Staff proposes to utilize a revenue bond/lease program to fund the cost of the new residential collection trucks and possibly the cost of the residential carts. The City has budgeted funds to fully pay the cost of the new collections trucks and residential carts. The primary purpose in proposing a revenue bond/lease to pay these items is to preserve as much cash flow for the Solid Waste Fund as possible. The preservation of existing cash is to provide more flexibility to the City in future decision especially considering the uncertain nature of the current economy. All lease agreements and bond issues will be brought to City Council for approval. Recommendation Staff recommends approval of the Resolution of Intent to Reimburse. K:\Steve Davis\Bond_leasc Program_Resolution of Intent to Reimbursc.doc • • RESOLUTION NO. • • A RESOLUTION EXPRESSING THE INTENT OF THE CITY OF FAYETTEVILLE, ARKANSAS, TO REIMBURSE CERTAIN EXPENDITURES OF THE CITY PERTAINING TO THE FINANCING and ACQUIRING OF CERTAIN CAPITAL EXPENDITURES WITH THE PROCEEDS OF AN ISSUE OR ISSUES OF TAX-EXEMPT BONDS OR TAX EXEMPT LEASES TO BE ISSUED BY THE CITY; AND STATING OTHER MATTERS PERTAINING THERETO. WHEREAS, the City of Fayetteville, Arkansas, (the "City") intends to utilize financing provisions authorized in the various amendments to the Arkansas Constitution (Amendment 62, Amendment 65 and Amendment 78) to acquire certain capital equipment for use by the Fayetteville Fire Department and Fayetteville Solid Waste Division (Acquisition Program); and WHEREAS, the City presently intends to finance the costs of planning, designing, acquiring, constructing, and equipping of some of the capital equipment purchases through the issuance of one or more series of tax-exempt bonds or through the issuance of one or more tax exempt capital lease agreements of the City (the "Bonds/Leases"); and WHEREAS, the City has determined the need to expend its funds to pay certain costs associated with this Acquisition Program prior to the issuance of the Bonds/Leases, and WHEREAS, in order to utilize the proceeds of tax-exempt bonds to reimburse original expenditures made by the City with respect to the Acquisition Program, it is necessary under the Internal Revenue Code of 1986, as amended (the "Code") and the U.S. Treasury Regulation Section 1.150-2 that the City make a present declaration of its official intent to make such reimbursement. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section I. That the City intends to issue its Bonds/Leases in one or more series in aggregate principal amount not to exceed $10 million under the constitution and laws of the State of Arkansas to finance a portion of the costs of planning, designing, acquiring, constructing, and equipping the Acquisition Program. Section 2. That the City intends to utilize a portion of the proceeds of the Bonds/Leases to reimburse itself for certain expenditures made by the City prior to the issuance of the Bonds with respect to the planning, designing, acquiring, constructing, and equipping of the Acquisition Program. Section 3. That the City intends this resolution to be its declaration of "official intent" under the Code and U.S. Treasury Regulation Section 1.150-2 to reimburse certain original expenditures with respect to the Acquisition Program.