The purpose of this Mayor and Council Communication (M&C) is to take action to preserve the ability of the City to reimburse itself from the proceeds received from future debt issuances for expenses associated with the 2014 Bond Program that are expected to be incurred and initially paid from available resources before the debt is issued.
Under Title 26 of the Code of Federal Regulation, Chapter I, Subchapter A, Part 1, Section 1.150-2 et seq., the City is able to use available resources to pay original expenditures associated with a debt-financed project prior to the debt being issued and then reimburse itself out of the proceeds of the debt sale if the City timely declares its intent to do so. Adoption of this M&C and the attached resolution represent the City officially expressing the intent to pay expenses associated with the 2014 Bond Program and then reimburse itself when those bonds are sold.
The City will use available cash to provide interim funding for these expenditures. Once debt associated with the projects is sold, bond proceeds will be used to reimburse the City's cash position, in accordance with the attached resolution. The projects in the 2014 Bond Program were approved by the voters in May 2014 through a City-wide referendum and are in various states of completion.
Beginning with the 2014 Bond Program, the City migrated our debt issuance process to more closely match the timing of when cash was actually needed. Instead of issuing all of the debt up front and drawing against the cash throughout the life of the program, the City now uses available cash as interim financing for original expenditures and then sells the bonds and reimburses itself. The City expressed its intent to use proceeds to officially reimburse expenditures in both the May 17, 2016, M&C G-18736, and in the ordinance canvassing the bond election approved on May 20, 2014.
This M&C does not request approval of a contract with a business entity.