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Department Approval <br />t Asi4 <br />Rls�&Spvl� <br />REQUEST FOR COUNCIL ACTION <br />Date: 06/09/05 <br />Item No.: 12.e <br />City Manager Approval <br />Item Description: Adopt a Resolution Acknowledging the City's Intent to Issue Equipment <br />Certificates <br />BACKGROUND <br />By previous action, the City Council has directed Staff to continue moving forward with the replacement of <br />the Arena refrigeration system and has formally approved a funding plan that would include the issuance of <br />equipment certificates. <br />To avoid any further project delays the Council has agreed in concept to move forward using existing City <br />reserves with the understanding that equipment certificates would be issued at a later date to replenish those <br />reserves. However, under IRS Regulations if the City intends to reimburse itself for capital expenditures <br />through some future debt instrument it must declare such intent by resolution. <br />The attached resolution was prepared by the City's Bond Counsel and upon its adoption the City will have <br />satisfied the reimbursement requirement as prescribed by State Statute. <br />POLICY OBJECTIVE <br />Adopting the attached resolution to fund the proj ect as described above is required under IRS Regulations. <br />FINANCIAL IMPACTS <br />Assuming the City issues $2 million in equipment certificates to pay for the proj ect and amortized the debt <br />over a 10-year period, the impact would be as follows: <br />Valued <br />Home * $235K <br />Current taxes <br />10-Year <br />Payback Schedule <br />$565 <br />Additional taxes <br />1 <br />Total taxes <br />575 <br />% Increase <br />1.8% <br />The Council is reminded that these taxpayer impacts would be in addition to any added impacts from other <br />property tax levy increases that will be needed for the City's operating and capital replacement budgets. <br />Page 1 of 6 <br />