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HomeMy WebLinkAboutResolution 3967-02-2011A Resolution NO. 3967 -02 -2011 STATEMENT EXPRESSING OFFICIAL INTENT TO REIMBURSE EXPENDITURES WITH PROCEEDS OF FUTURE DEBT WHEREAS, the City of Fort Worth, Texas (the "City ") is a home -rule municipality and political subdivision of the State of Texas; WHEREAS, the City expects to pay from available funds expenditures in connection with the acquisition of fire equipment and vehicles, and golf equipment in connection with the operation of municipal golf courses by the City (together, the "Project ") prior to the issuance of obligations by the City in connection with the financing of the Project; WHEREAS, the City finds, considers, and declares that the reimbursement of the City for the payment of such expenditures will be appropriate and consistent with the lawful objectives of the City and, as such, chooses to declare its intention, in accordance with the provisions of Section 1.150 -2 of the Treasury Regulations, to reimburse itself for such payments at such time as it issues obligations to finance the Project; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS: Section 1. The City reasonably expects it will incur debt, as one or more series of obligations, with an aggregate maximum principal amount not to exceed $5,000,000, for the purpose of paying the aggregate costs of the Project. Section 2. All costs to be reimbursed pursuant hereto will be capital expenditures. No tax - exempt obligations will be issued by the City in furtherance of this Statement after a date which is later than 18 months after the later of (1) the date the expenditures are paid or (2) the date on which the property, with respect to which such expenditures were made, is placed in service. Section 3. The foregoing notwithstanding, no tax - exempt obligation will be issued pursuant to this Statement more than three years after the date any expenditure which is to be reimbursed is paid. Adopted this 81h day of February, 2011. ATTEST: By: I - -- - - - -- - Marty Hendrix, City Secr ary ORT WOW fi APPROVE CITY COUNCIL FEB 0 8 2011 Cft sew*" of the a�►�I lbCt wfoAt� rwoas City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Appr©vecl`"on 218/2011 - Resolution No. , 3907 -02 -2011 DATE: Tuesday, February 08, 2011 REFERENCE NO.: G -17198 LOG NAME: 1311 FIRE GOLF REIMB RES SUBJECT: Adopt Resolution Expressing Official Intent to Reimburse Costs of Acquiring Approximately $340,000.00 of Golf Course Maintenance Equipment and Approximately $4,400,000.00 of Fire Equipment and Vehicles RECOMMENDATION: It is recommended that the City Council adopt a resolution expressing official intent to reimburse costs of acquiring approximately $340,000.00 of golf course maintenance equipment and approximately $4,400,000.00 of Fire equipment and vehicles. DISCUSSION: The Golf Division is in need of new golf course maintenance equipment that it can purchase at discounted prices through the buy board. Lease - purchase financing was originally considered but would have cost the City an interest rate between 4.5 percent and 5.0 percent. Projected interest rates on issuing Certificates of Obligation (CO) were considerably less, resulting in further savings to the City. The Golf Debt Service Fund will pay for the Golfs portion of the CO, thus having no impact on the City's debt capacity. Similar to the Fire Department, the Golf Division needs this equipment earlier than they would receive them if not ordered until the COs have been issued. Thus, staff is including this equipment in the resolution. A maximum amount of $340,000.00 will be utilized for the acquisition of golf course maintenance equipment (14 units) for the Golf Enterprise Fund. CO financing for the equipment replacement program is in accordance with the 2005 Golf Pro Forma adopted by the City Council on March 1, 2005 (M &C G- 14701). This purchase will replace golf course maintenance equipment such as greensmowers, sand trap rakes and spray rigs which have exceeded their useful life and are uneconomical to maintain and /or repair. The Fire Department is currently on a Fleet Rotation Plan that calls for approximately $4 million worth of vehicle and equipment purchases per year. This plan allows the department to rotate out of the fleet vehicles that are too old or too costly to continue utilizing for public safety. The City has financed such purchases in the past via issuance of Equipment Notes and Certificates of Obligation. The City generally issues tax - supported debt after the Certified Appraisal Rolls are available in late July. Because of the lengthy delay between order time and order fulfillment with fire trucks, the department cannot wait until August or September to place the new orders. To accommodate this concern, staff recommends adopting the attached resolution stating the City's intent to purchase fire equipment and vehicles and to reimburse itself through the issuance of debt at a later date. In accordance with the provisions of the Financial Management Policy Statements, staff anticipates presenting tax - supported debt issuances, to the City Council for consideration in the upcoming months. If Logname: 1311 FIRE GOLF REIMB RES Page 1 of 2 debt is not issued within approximately three years to provide reimbursement for these expenses, the costs will no longer be reimbursable by issuing tax - exempt debt and the funding source will have to be made whole through other budgetary methods. FISCAL INFORMATION / CERTIFICATION: FUND CENTERS: TO Fund /Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Originating Department Head: Additional Information Contact: FROM Fund /Account/Centers Karen Montgomery (6222) Lena Ellis (8517) James Mauldin (2438) Logname: 1311 FIRE GOLF REIMB RES Page 2 of 2