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Home My WebLink About1/2/2003 - STAFF REPORTS DATE: January 2, 2003 TO: City Council FROM: Director of Finance and Treasurer REIMBURSEMENT OF EXPENDITURES FROM CONVENTION CENTER EXPANSION BOND ISSUE RECOMMENDATION: It is recommended that the City Council approve a resolution declaring its intent to reimburse expenditures from the proceeds of the Convention Center Expansion tax exempt bond issue. SUMMARY: The City will expend funds for engineering, architectural, legal and other matters for the Phase II expansion of the Convention Center. The construction of the Phase I project-refurbishing of the kitchen and remodeling of the Springs Theatre into meeting rooms — is currently underway. The Resolution of Intent will allow the City to reimburse itself for all or some of these expenses from the proceeds of the bond issue. BACKGROUND: The City Council has approved the Phase I project for the Convention Center and has approved the architects for the Phase II expansion. Phase I is expected to cost approximately$3.3 million. The expansion will cost approximately $20 million. Phase I is scheduled for completion by late spring, 2003. Phase II is scheduled to start construction in September, 2003 and be completed by November, 2004. The bond issue will probably close in July or August, 2003. In order to include project costs that were incurred to the bond issue, the City Council must approve a Resolution of Intent to Reimburse. However, the City is not required to reimburse itself for all costs. In effect, the City Council could choose to pay cash for some of the improvements. The decision on what to include can be made when the bond documents, including the size of the issue, come back to the Council for approval. The attached resolution, and a concurring resolution for the Palm Springs Financing Authority, were prepared by the City Attorney's office, and reviewed by the City's Financial Advisor, Harrell and Company. SUBMITTED BY: APPROVED: r Thomas M. Kanarr David H. Ready Director of Finance and Treasurer City Manager ATTACHMENTS: Resolution OFA RESOLUTION NO. A RESOLUTION OF THE PALM SPRINGS FINANCING AUTHORITY DECLARING ITS OFFICIAL INTENT TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF TAX EXEMPT OBLIGATIONS WHEREAS, the Palm Springs Financing Authority (the "Authority") is a Joint Powers Authority (a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the joint Powers Law (Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the California Government Code) (the "Act") and the powers of such authority include the power to issue bonds for any of its corporate purposes; and WHEREAS, the Authority desires to finance the construction and acquisition of the public facilities described below (collectively, the 'Project'); and WHEREAS, the Authority will be expending funds for the construction and acquisition of the Project; and WHEREAS, the Authority reasonably expects to reimburse such expenditures by authorizing the sale and delivery of one or more series of Bonds, as described below; NOW, THEREFORE, the Palm Springs Financing Authority hereby resolves as follows: Section 1. This Resolution is a declaration of official intent to reimburse expenditures pursuant to Treasury Regulations Section 1.150-2. Section 2. The Authority desires to finance the construction and acquisition of the Project consisting of a two-phase expansion of the Palm Springs Convention Center. Section 3. The Authority reasonably expects to incur expenditures in an amount not to exceed $3,750,000 in connection with the construction and acquisition of the Project. Section 4. The Authority reasonably expects to reimburse such expenditures through the sale and delivery of one or more series of bonds (the 'Bonds"), the interest component on which is excludable from gross income under Section 103 of the Internal Revenue Code. The maximum principal amount of Bonds expected to be issued for the Project is $30,000,000. Section 5. The reimbursement allocation to be made with respect to the expenditures will occur not later than eighteen (18) months after the later of(i) the date on which the expenditure is paid, or(ii) the date on which the Project is placed in service, but in no event more than 3 years after the expenditure is paid. IRV 927610 v1 TA )�3 -1- Section 6. This Resolution expresses the Authority's expectations as of this date with respect to the financing of the construction and acquisition of the Project. Future events or extraordinary circumstances beyond the control of the Authority may result in the Project being financed in a manner other than as described in this Resolution, and nothing contained herein constitutes an irrevocable commitment by the Authority to issue the Bonds. Section 7. The Secretary shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. Notwithstanding the foregoing, such certification and any of the other duties and responsibilities assigned to the Secretary pursuant to this Resolution may be performed by an Assistant Secretary with the salne force and effect as if performed by the Secretary hereunder. PASSED AND ADOPTED this_day of 12003. Chairman ATTEST: Secretary APPROVED AS TO FORM: David I Aleshire Authority Counsel IRV#27610 v1 _2_ RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DECLARING ITS OFFICIAL INTENT TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF TAX EXEMPT OBLIGATIONS WHEREAS, the City of Palm Springs (the "City") desires to finance the construction and acquisition of the public facilities described below (collectively, the "Project"); and WHEREAS, the City will be expending funds for the construction and acquisition of the Project; and WHEREAS, the City reasonably expects to reimburse such expenditures by authorizing the sale and delivery of one or more series of Bonds, as described below; NOW, THEREFORE, the City Council of the City of Palm Springs hereby resolves as follows: Section 1. This Resolution is a declaration of official intent to reimburse expenditures pursuant to Treasury Regulations Section 1.150-2. Section 2. The City desires to finance the construction and acquisition of the Project consisting of a two-phase expansion of the Palm Springs Convention Center. Section 3. The City reasonably expects to incur expenditures in an amount not to exceed $3,750,000 in connection with the construction and acquisition of the Project. Section 4. The City reasonably expects to reimburse such expenditures through the sale and delivery of one or more series of bonds (the "Bonds"), the interest component on which is excludable from gross income under Section 103 of the Internal Revenue Code. The maximum principal amount of Bonds expected to be issued for the Project is $30,000,000. Section 5. The reimbursement allocation to be made with respect to the expenditures will occur not later than eighteen (18) months after the later of(i) the date on which the expenditure is paid, or(ii) the date on which the Project is placed in service, but in no event more than 3 years after the expenditure is paid. Section 6. This Resolution expresses the City's expectations as of this date with respect to the financing of the construction and acquisition of the Project. Future events or extraordinary circumstances beyond the control of the City may result in the Project being financed in a manner other than as described in this Resolution, and nothing contained herein constitutes an irrevocable commitment by the City to issue the Bonds. / _1_ tw P IRV#27566 vl 1 ' Section 7. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect. Notwithstanding the foregoing, such certification and any of the other duties and responsibilities assigned to the City Clerk pursuant to this Resolution may be performed by an Assistant City Clerk/Deputy City Clerk with the same force and effect as if performed by the City Clerk hereunder. PASSED AND ADOPTED this day of 2003. Mayor ATTEST: City Clerk APPROVED AS TO FORM: David J. Aleshire City Attorney Fk 14 two %*2 IRV#27566 v1 -2-