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HomeMy WebLinkAbout2011-04-25 11-136 RESOLVEItem No, It 136 Dale: ADM 25, 2011 Item/Subject Resolve, Declaration of Official Intent to Reimburse Expenditures on Certain School Construction, Reconstruction and Renovation Projects from Tax -Exempt Obligations or Qualified School Constmcton Bonds Responsible Department Finance Commentary: At the Finance Committeemeeting of April 4, the School Department reviewed a recent loan pryrhroS Education the State Department of Education for renovation of schools. The loan program Is a beingogeretlasa Qualified School ConstructionStat.Bontlprogrsm(does).Thisigate a was offered the on a coSchool ve basis throughout d aState. As an application does not obligate an entity, the Bangor School Department submitted an application to replace aging HVAC equipment, the roof at e Bangor High, the bleachers at Bangor High,School repair/replant as nu iecl systems, as well as some lighting upgrades. In late March, the School Department was nodfed that it had been awarded $7,000,000 based upon its application. The QSCB, is a federally sponsored/funded program with flexible repayment tens. Through this Program the City would be able to set its principal repayment schedule to match the annual reductions In our current debt, thereby not Increasing our annual debt service level and receive reimbursement for nearly 100% of the interest costs resulting in a neatly interest free loan. The School DeparUnent continues to refine Its project list and estimated costs and a final recommendation is expected In late May or lune 2011. In order to prepare a comprehensive project budget, it will be necessary to incur some up front engineermg rosts. In orderto use a borrowing to reimburse ourselves for past costs, the City must be on record with its Intent to issue bonds for this purpose whin 60 days of the expenditures occurring; hence, the attached resolve. -4 DeP tm�ead Manager's Comments: This item was reviewed by the Finance Committee on 4/4/11 and recommended for approval. City Manager Associated Information: Order Budget Approval: q _ Finance Director Legal Approval: city. Solicitor X Passage First Reading Page _ M_ Referral April 25, 2011 Assigned ro Councilor _ gram CITY OF BANGOR (MILE.) Resolve, Declaration of Dffidal Intent to Reimburse Expenditures on Certain School Construction, Reconstruction and Renovation Projects from Tax -Exempt Opiigadors or Qualified School Construction Bonds WHEREAS, the City of Bangor, Maine (the %ssuer) currently intends a proceed construction, reconstruction and renovation Improvements at Abraham Lincoln School,. Bangor High School, Downeast School, Fairmount School, Fourteenth Street School, Frit Street School, James F. Doughty Middle School, Mary Snow School, Vine Street School and William S. Cohen Middle School (the "Projects'; and WHEREAS, the Issuer Intends to finance a portion of the costs of the Projects through the issuance of tax-exempt bonds and notes in anticipation thereof or through the Issuance of Qualified School Construction Bonds ("QSCDO, to the extent other funds are not available therefore; and WHEREAS, Section 59A(d)(2)(D) of the Internal Revenue Code of 1986, as amended, and Treasury Regulation § 1.150-2 generally require that an Issuer declare its official intent ro reimburse expenditures with the proceeds of such obligations prior to the dace of such expenditures; Nowtherefore, by Me oryCounal of Me C11y oftiangor be it hereby RE lkE 1. Declaration of Intent. The Issuer intends to reimburse itself from the proceeds of either tax-exempt obligations or QSCSs in an aggregate amount not to exceed $7,000,000 for expenditures made or Incurred by it on the Projects prior to the issuance of such tax-exempt obligations or QSCBs. 2. General Description of Property to vitilCh Reimbursement Relates. Set forth above is a reasonably accurate general functional description of the Projects with respect to which reimbursements will be made; provided that the Issuer reserves cite right to make such changes, substitutions, additions, and deletions as are necessary far the efficient operation of the Issuer and the completion of the Projects. 3. Identification of Source of Funds. Expenditures made prior to the issuance of tax-exempt obligations or QSCBs issued M finance such costs of the Projects are expected to be funded either WN operating and non-operating revenues of the Issuer or with the proceeds of an interim loan. 1] 136 4. Status of Bons and/or Notes. The bonds and/or notes to be issuetl to finance the costs of the Prefects described above are intended to be tax-exempt obligations as described in Section 103(a) of the Code or to be QBCBs as described in Section W of the Code. S. Public Availability of Official Intent. This Declaration of Official Intent shall be Maintained as a public record of the issuer. IP cm coO n "p l 25, 2011 'Motion Made and Seconded far Passne Passed cm CLEW, vt�� =LUJ ArAu. ef Officol Intent to A Ululxue > eod=ol constalction Reconstruction andRenovation , 24WECts_from Sax Rse®t Obligations of Qualified School Construction Roods dnlpudb CwneEm_ mn ..