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HomeMy WebLinkAbout11684RESOLUTION NO. 11684 A RESOLUTION DECLARING AN OFFICIAL INTENT TO REIMBURSE THE CITY OF PUEBLO, COLORADO'S SEWER ENTERPRISE FROM THE PROCEEDS OF A FUTURE BORROWING FOR CAPITAL EXPENDITURES AND PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City of Pueblo, in the County of Pueblo and State of Colorado (the "City "), is a municipal corporation duly organized and existing as a home rule city pursuant to Article XX of the Constitution of the State of Colorado (the "State ") and the home rule charter of the City (the "Charter "); and WHEREAS, under the Charter, the City is possessed of all powers which are necessary, requisite or proper for the government and administration of its local and municipal affairs, all powers which are granted to home rule municipalities by the Colorado Constitution, and all rights and powers that now or hereafter may be granted to municipalities by the laws of the State; and WHEREAS, the City owns and operates a municipal sanitary sewer system (the "Sewer Enterprise "); and WHEREAS, the legislative powers of the City are vested in a governing board of council members, known as the city council (the "City Council "), which also operates as the governing body of the Sewer Enterprise; and WHEREAS, the City Council, sitting as the governing body of the Sewer Enterprise, has determined that it is to the benefit of the users of the Sewer Enterprise that the City finance the construction of facilities to remove ammonia at the water reclamation facility, install a dewatering system, install an ultraviolet radiation disinfection system and install a solar photovoltaic array (collectively, the "Project "); and WHEREAS, the City's Sewer Enterprise reasonably expects to expend its funds for capital expenditures related to the Project in the future; and WHEREAS, the City, acting by and through its Sewer Enterprise, currently intends and reasonably expects to participate in a borrowing to finance the Project, including moneys to reimburse the Sewer Enterprise or third parties for capital expenditures made by either of them for the Project prior to the availability of funds from such borrowing; and WHEREAS, the initial expenditure of funds of the Sewer Enterprise or the third parties for the Project will likely occur on a date that is prior to such borrowing; and WHEREAS, such borrowing by the Sewer Enterprise shall occur within 18 months of either the date that the Sewer Enterprise or the third parties first expended funds for the Project or the date that the Project is placed in service, whichever is later (but in no event more than three years after the date of the original expenditure of Sewer Enterprise or third party funds for the Project); and WHEREAS, the City Council, sitting as the governing body of the Sewer Enterprise, hereby desires to declare its official intent, pursuant to 26 C.F.R. § 1.150 -2, to reimburse the Sewer Enterprise or third parties for expenditure of funds for the Project from the proceeds of a future borrowing of the City, acting by and through its Sewer Enterprise. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, COLORADO, that SECTION 1 . Dates of Capital Expenditures. All of the capital expenditures covered by this Resolution were or will be made not earlier than 60 days prior to the date of this Resolution. SECTION 2 . Declaration of Official Intent. The City, acting by and through its Sewer Enterprise, presently intends and reasonably expects to participate in a borrowing within 18 months of either the date of the first expenditure of funds by the Sewer Enterprise or third parties for the Project or the date that the Project is placed in service, whichever is later (but in no event more than three years after the date of the original expenditure of Sewer Enterprise or third party funds for the Project), and to allocate an amount not to exceed $10,000,000 of the proceeds thereof to reimburse the Sewer Enterprise or the third party for its expenditures in connection with the Project. SECTION 3 . Resolution Number. This is the first resolution of the City, acting by and through its Sewer Enterprise, declaring its intent to reimburse itself or third parties for the Project from proceeds of a borrowing. SECTION 4 . Confirmation of Prior Acts. All prior actions of the officials and agents of the City and its Sewer Enterprise that are in conformity with the purpose and intent of this Resolution and in furtherance of the Project shall be and the same hereby are in all respects ratified, approved and confirmed. SECTION 5 . Effective Date of Resolution. This Resolution shall take effect immediately upon its adoption. INTRODUCED AND ADOPTED at a duly called and held meeting of the City Council, sitting as the governing body of the Sewer Enterprise, on August 24, 2009. A77TSTDD SY: CITY CLERK INTRODUCED: August 24, 2009 BY: Judy Weaver } C � OUNCILPERSON APPR D' } �- PRESIDENTaf City Council Background Paper for Proposed RESOLUTION AGENDA ITEM # M -12 DATE: AUGUST 24, 2009 DEPARTMENT: WASTEWATER DEPARTMENT GENE MICHAEL, DIRECTOR TITLE A RESOLUTION DECLARING AN OFFICIAL INTENT TO REIMBURSE THE CITY OF PUEBLO, COLORADO'S SEWER ENTERPRISE FROM THE PROCEEDS OF A FUTURE BORROWING FOR CAPITAL EXPENDITURES AND PROVIDING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH ISSUE Should the City Council adopt a resolution declaring an official intent to reimburse the City of Pueblo, Colorado's Sewer Enterprise from the proceeds of a future borrowing for capital expenditures and providing certain other matters. RECOMMENDATION Approve this Resolution. BACKGROUND The Sewer Enterprise is undertaking major improvements to the James R. Dilorio Water Reclamation Facility in order to comply with new regulations, to increase the safety and reliability of the disinfection process, and to provide for alternative energy generation. These improvements will be funded through loan programs provided by the Federal and State governments. Under the terms of the loan agreements, the City will make payments to contractors, and then will be reimbursed from approved loans for the cost of those payments. This resolution provides the City with a legal instrument allowing it to accept reimbursements from the loans. FINANCIAL IMPACT City Council has previously authorized the amount of $4,500,000 to be spent from the cash reserves of the Wastewater utility for preliminary work necessary to begin the project. It is anticipated that any monies spent from the reserves will be replenished from proceeds of future loans and borrowings. This Resolution will authorize the reimbursement. If not passed and approved by Council, any amount spent in advance of the loan closing will be permanently spent from the cash reserves of the Wastewater fund.