AgdaPkt 2005-01-24 - Laserfiche WebLink

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REPORT To the Honorable Mayor and City Council From the City Manager January 24, 2005 Subject Recycled Water Project Recommendation, It is recommended that the City Council adopt a resolution that will preserve the City's ability to fund the design and construction of artificial play fields with funds from a potential future bond issuance. Background A component of the Recycled Water Project as recommended by the Community Task Force on Recycled Watar will be the replacement of up to six existing grass playing fields with artificial surface playing fields. The construction of these fields is expected to begin in early 2006 and when complete will result in approximately 13 acres of playing fields being converted to artificial surface. Doing so will save the City an estimated 95 acre-feet per year of potable water. The task force estimated costs for the fields was $4.7 million. Prior to issuing bonds, the City may incur project costs that it may ultimately want to recover from the issuance of tax exempt debt. U.S. Treasury Department regulations require that the governing body of the bond issuer adopt a "reimbursement resolution" in advance of expending such amounts should the issuer desire to recover those amounts from a tax exempt bond issue. Generally, any "soft" costs such as design and engineering costs may be reimbursed from a bond issued without adopting a reimbursement resolution while "hard" costs such as construction costs expended before bonds are issued may only be recovered if a "reimbursement resolution" is adopted prior to their expenditure. The Council has not yet approved artificial turf at specific sites. This resolution does not obligate the City to put artificial turf at a specific location, but rather allows such construction regardless of the location to be covered by funds from a potential recycled water bond issue. AI Ie rna ti ve The City Council may elect not to adopt this resolution. Should the Council not adopt this resolution the project financing will rely more upon retained earnings and grants and less upon debt. This, however, might restrict the scope and timing of the project. Fiscal Impact There are not additional costs generated by adopting this resolution as Council is not approving the project at this time. By adopting this resolution, the City Council is merely preserving the option to reimburse the water fund for eligible costs that are incurred prior to the issuance of bonds, but does not commit the City to doing so. Recycled Water Project - 1 ..... ,... ..