AGENDA #4c
MEMORANDUM
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TO: |
Roger L. Stancil, Town Manager |
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FROM: |
Kenneth C. Pennoyer, Director of Business Management |
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SUBJECT: |
Reimbursement Resolution Regarding Proposed Financing for the Library Renovation and Expansion |
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DATE: |
March 3, 2008 |
The attached resolution would declare the Town’s intent to reimburse all future expenses incurred in the major renovations and expansion of the Chapel Hill Library from the proceeds from the sale of general obligation (G.O.) bonds proposed for this project.
As a part of the Town’s 15-year capital plan, the Capital Improvements Fund budget for 2007-2008 and 2008-2009 includes funding for expansion and renovations to the Library. The Library would be expanded from 27,000 square feet to 68,000 square feet and its meeting/conference room seating capacity would increase from 120 to 282. Major renovations to the existing building would include: floor plan modifications, new rooftop air conditioning and heating units, new paint, and replacement floor coverings. The capital plan includes a proposal to finance the actual construction improvements beginning in 2008 and 2009. Costs for planning and design of this project were previously funded through the 2004 G.O. Bond Sale ($500,000) and the 2006 G.O. Bond Sale ($1,500,000). The Council selected the firm of Corley, Redfoot Zack, partnered with Robert A.M. Stern as designers of the project. The design process is underway and the project remains on schedule. We anticipated that the project will begin in late summer of calendar year 2008. The issuance of G.O. Bonds to finance project construction is planned for FY2008-09.
U. S. Treasury regulations and guidelines require that a governmental entity declare its intent to use tax-exempt debt financing in order to subsequently reimburse itself from the proceeds of that borrowing. In accord with this requirement, the Town must adopt a resolution declaring its intent to reimburse itself from the proceeds of the issuance of G. O. Bonds for the Library renovation expenditures incurred prior to the financing.
In accordance with Internal Revenues Service requirements for the issuance of tax-exempt debt the attached resolution declares the Town’s intent to reimburse itself for Library renovation expenditures from the sale of G.O. bonds in the amount of $14,260,000 as proposed in the 2007-08 capital budget. The Council will have an opportunity to specifically approve or reject the actual bids for the renovations. However, without the reimbursement resolution, we cannot finance costs of the project from this date until the actual financing is in place, should the Council decide to approve the bid or bids and finance the Library expansion and renovations.
That the Council adopt the attached resolution declaring its intent to reimburse costs associated with the renovations and expansion of the Library from the proceeds of G.O. Bonds to be issued in FY2008-09.