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HomeMy WebLinkAbout028510 RES - 03/09/2010Page 1 of 6 RESOLUTION ESTABLISHING THE CITY'S INTENTION TO REIMBURSE ITSELF, IN AN AMOUNT NOT TO EXCEED $8,000,000, FOR THE PRIOR LAWFUL EXPENDITURE OF FUNDS FROM THE PROCEEDS OF OBLIGATIONS TO BE ISSUED BY THE CITY FOR AUTHORIZED PURPOSES RELATING TO THE UTILITY SYSTEM; AUTHORIZING MATTERS INCIDENT AND RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council of the City of Corpus Christi, Texas ("Issuer") has entered into or will enter into various contracts pertaining to the expenditure of lawfully available funds of the Issuer to finance the costs associated with (i) improvements to the Issuer's combined utility system, (ii) the payment of various engineering costs, including design testing, design engineering, and construction inspection related to the Construction Costs ("Engineering Costs"), (iii) the payment of various architectural costs, including preparation of plans and specifications and various other plans and drawings related to the Construction Costs ("Architectural Costs"), and (iv) the payment of various administrative costs, including the fees of bond counsel, financial advisor, project manager, other professionals, and bond printer ("Administrative Costs") [the Construction Costs, the Engineering Costs, the Architectural Costs, and the Administrative Costs collectively constitute the costs of the project that is the subject of this Resolution ("Project")]; WHEREAS, the Project is more specifically described in Exhibit A, which is attached to and incorporated into this Resolution; WHEREAS, the provisions of Section 1201.042, as amended, Texas Government Code provide that the proceeds from the sale of obligations issued to finance the acquisition, construction, equipping, or furnishing of any project or facilities, such as the Project, may be used to reimburse the Issuer, for costs attributable to such project or facilities paid or incurred before the date of issuance of such obligations; WHEREAS, the United States Department of Treasury issued Section 1.150-2, Title 26, Code of Federal Regulations ("Regulations) which establishes when the proceeds of obligations are spent and therefore are no longer subject to various federal income tax restrictions contained in the Internal Revenue Code of 1986, as amended; WHEREAS, the Issuer intends to reimburse itself, within eighteen months from the later of the date of expenditure or the date the property financed is placed in service (but in no event more than three years after the original expenditures is paid), for the prior lawful capital expenditure of funds from the proceeds of the Issuer's "Utility System Revenue Improvement Bonds, Series 2010" ("Obligations") that the Issuer currently contemplates issuing in an approximate amount of $8,000,000 to finance a portion of the costs of the Project; 028510 Mary Rhodes Extension Reimbursement Resolution 03012010 INDEXED Page 2 of 6 WHEREAS, under the Regulations, to fund such reimbursement with proceeds of the Obligations, the Issuer must declare its expectation ultimately to make such reimbursement before making the expenditures; WHEREAS, the Issuer finds and determines that the reimbursement for the prior expenditure of funds of the Issuer is not inconsistent with the Issuer's budgetary and financial circumstances; and WHEREAS, the City Council finds and determines that the adoption of this Resolution is in the best interests of the citizens of the Issuer; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. This Resolution is a declaration of the City's intent to establish the Issuer's reasonable, official intent under the Regulations to reimburse itself from certain of the proceeds of the Obligations for any capital expenditures previously incurred (not more than 60 days prior to the date of this resolution) with respect to the Project from the Issuer's General Fund or other lawfully available funds of the Issuer. SECTION 2. The Issuer intends to issue the Obligations and allocate within 30 days after the date of issue of the Obligations the proceeds from the Obligations to reimburse the Issuer for prior lawful expenditures with respect to the Project in a manner to comply with the Regulations. SECTION 3. The reimbursement expenditure will be a type properly chargeable to a capital account (or would be so chargeable with a proper election) under general federal income tax principles. SECTION 4. The Issuer intends to otherwise comply, in addition to those matters addressed within this Resolution, with all the requirements contained in the Regulations. SECTION 5. This Resolution may be relied upon by the appropriate officials at the Office of the Attorney General for the State of Texas and establishes compliance by the Issuer with the requirements of Texas law and the Regulations. SECTION 6. With respect to the proceeds of the Obligations allocated to reimburse the Issuer for prior expenditures, the Issuer shall not employ an abusive device under Section 1.148-10, Title 26, Code of Federal Regulations, including using within one year of the reimbursement allocation, the funds corresponding to the proceeds of the Obligations in a manner that results in the creation of replacement proceeds, as defined in Section 1.148-1, Title 26, Code of Federal Regulations, of the Obligations or another issue of tax-exempt obligations. SECTION 7. The recitals contained in the preamble of this Resolution are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Mary Rhodes Extension Reimbursement Resolution 03012010 Page 3 of 6 SECTION 8. All ordinances and resolutions, or parts of other ordinances or resolution, which are in conflict or inconsistent with any provision of this Resolution are repealed to the extent of such conflict, and the provisions of this Resolution remain controlling as to the matters resolved in this Resolution. SECTION 9. This Resolution must be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 10. If any provision of this Resolution or the application of this Resolution to any person or circumstance is held to be invalid, the remainder of this Resolution and the application of the provision to other persons and circumstances remains valid, and the City Council declares that this Resolution would have been enacted without such invalid provision. SECTION 11. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, as amended, Texas Government Code. SECTION 12. This Resolution remains passage, and it is so resolved. ATTE Armando Chapa City Secretary APPROVED: 1st day of March, 2010. R. J ' -ining First A sistant y Attorney For City Attorney in force and effect from and after its final Mary Rhodes Extension Reimbursement Resolution 03012010 THE CITY OF CORPUS CHRISTI /A.,(//ef-i Joe A me Mayor Page 4 of 6 Corpus Christi, Texas moo, /)1AAA , 2010 The above resolution was passed by the following vote: Joe Adame Chris N. Adler Brent Chesney Larry R. Elizondo, Sr. Kevin Kieschnick Priscilla Leal ' John E. Marez Atec Nelda Martinez Mark Scott 028510 Mary Rhodes Extension Reimbursement Resolution 03012010 EXHIBIT A Mary Rhodes Pipeline Phase 2 (Garwood Water Supply Project) Description of Services The Mary Rhodes Pipeline Phase 2, also known as the Garwood Water Supply Project consists of preliminary and final design services for the transmission of water from the Colorado River to the existing Mary Rhodes Pipeline. The transferred water will be diverted under the Garwood Water Right. This right is the most senior in the Lower Colorado River. The City of Corpus Christi's (the City's) portion of the right is 35,000 acre-feet per year. This portion is junior by one day to the original water right held by the Garwood Irrigation Company, currently operated by the Lower Colorado River Authority (LCRA). The City acquired the Garwood water right in 1998. The project will include a new intake on the Colorado River or the rehabilitation of the existing LCRA Gulf Coast Intake Pump Station, a new pump station, approximately 40 miles of transmission pipeline, tie-in to the existing West Water Delivery System, and necessary improvements to the Mary Rhodes Pipeline system. Basic Services for the intake and pump station design will include evaluation of intake alternatives, pump selection, motor selection, HVAC design, conceptual layout of instrumentation and controls, coordination with power supplier, architectural layout, design of a potential settling basin for suspended solids, flow meter layout, structural requirements, and drawing and specification production. The required pump station capacity for the system is approximately 45 MGD. Basic Services for the transmission pipeline will include existing data collection, life- cycle cost analysis, pipeline corridor development, determination of crossings, final route selection, evaluation of pipeline materials, required permitting, and drawing and specification preparation. Services will also include coordination with LCRA to develop an accounting and operating plan for diversion of water from the Colorado River. The approximate pipeline diameter for the project is 54 inches. Basic Services for the tie-in to the Mary Rhodes Pipeline system will include evaluation of alternatives for integration and connection of the proposed Garwood pipeline facilities to the existing Lake Texana Intake suction piping. Services will also include the addition of a water storage tank or wet well at the West Water Delivery System Pump Station. Drawings and specifications will be produced for this tie-in. Basic Services for the necessary improvements to the Mary Rhodes Pipeline system will include the addition of one pump each at the West Water Delivery System Pump Station and the Bloomington and Woodsboro Intermediate Pump Stations. Services will also include ground storage tanks at the intermediate pump stations along with associated piping and flow meters. Lastly, services will include evaluation of the existing electrical equipment for the three existing pump station. Drawings and specifications will be produced for these improvements. A-1 Mary Rhodes Extension Reimbursement Resolution 03012010 In addition to the Basic Services, the Mary Rhodes Pipeline Phase 2 Project will include geotechnical investigation, topographic and boundary survey, easement document preparation, subsurface utility exploration and corrosion protection. Services will also include surge modeling of the proposed system and existing Mary Rhodes Pipeline system, environmental permitting, hydraulic modeling of the proposed intake pump station, and land acquisition services. A-2 Mary Rhodes Extension Reimbursement Resolution 03012010