PRESENTER: Presenter
Jared Werner, Assistant City Manager
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SUBJECT: Title
Discuss and Consider approval of a resolution relating to establishing the City’s intention to reimburse itself for the prior lawful expenditure of funds relating to street and drainage improvements from the proceeds of tax-exempt obligations to be issued by the City for authorized purposes; authorizing other matters incident and related thereto; and providing an effective date.
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DEPARTMENT: CMO
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
As discussed in the previous agenda item, the City is proposing the issuance of up to $9.6 million in Certificates of Obligation (COs) to finance the Coll Street Drainage, Roadway, and Utility Underground Conversion Project. Although the COs will be issued by the City, the debt service will be paid entirely by the New Braunfels Economic Development Corporation (NBEDC).
A reimbursement resolution is a formal declaration of the City's intent to reimburse eligible project expenditures from the proceeds of a future debt issuance. It provides legal and financial flexibility by allowing construction activities to move forward before the financing is completed without jeopardizing the City's ability to reimburse those expenditures with future CO proceeds.
The proposed reimbursement resolution authorizes the reimbursement of eligible project costs, up to $9.6 million, from the future CO proceeds. As noted in the previous item, the City is not expected to consider authorizing the COs until September 28, with closing anticipated on October 28. Because the project may incur eligible costs before the financing is finalized, approval of the reimbursement resolution allows the City to utilize available funds to maintain the project schedule, with the expectation that those expenditures will be reimbursed once the CO proceeds are received.
ISSUE:
N/A
STRATEGIC PLAN REFERENCE:
☐Economic Mobility ☒Enhanced Connectivity ☐Community Identity
☒Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
The reimbursement resolution provides the flexibility for the City to reimburse eligible project costs incurred for the Coll Street Drainage and Road Improvement Project through the proposed issuance of Certificates of Obligation (CO’s). As stated, if issued, the debt service will be fully funded by the NBEDC, which has sufficient financial capacity to support the annual payments.
Recommendation
RECOMMENDATION:
Staff recommend approval of the reimbursement resolution,