IV.7. Approve Resolution 2018-010, Declaring the Official Intent of the City of Hopkins to Reimburse Certain Expenditures from the Proceeds of Bonds to be Issued by the City; Stadler1
�W - `
�`.�. �a���'��� .
January 25, 2� 1 S Council Report 2018-017
� ,��
.;,.-�, ,.nn�,.�,
4:,ye�.. i"
/ _. .. ..... :-;.�:� . . .: . �„ . . .... � .
C�y of Hopki ns
APPR�VE RESOLUTICJN 2018-010
DECLARING THE OFFICIAL INTENT OF TNE CITY
OF HOPKINS TO REIMBURSE CERTAIN
EXPENDITURES FROM THE PROCEEDS �F
BONDS TO BE ISSUED BY THE CITY
Prouosed Action
_ �_
Staff recommends adoptlon of the following motion: Move to ado�t Resolution 2018-410 Declari
n� the Of�cial Intent of the City to Reimburse Certain Ex�enditures from the Proceeds of Bonds
to be Issued bv the Citv re�arding the Pavilion Addition and Renovation �roject, Cit��rol:ect
2017-008. �
Approval of this motion will allow the city to inove forward vvith tll e u p gr a d e o f th e
H o p k i n s P av i 1 i o n while spreading the costs into future years in order to maintain reasonable
cash flow, associated future debt service levies and working capital fund balances in the Pavilion
fund and the Park I�nprovement fund.
Overview
The Hopkins Pavilion is in need of a new ice refrigeration plant and an addition to
accommodate expanded team rooms and a new warming house. A feasible project has been
designed and is being supported financially by both the Hopkins Youth Hockey Association
and the Hopkins Public Schools. The total bonding amount of $3 .8 million reflects the $1
million contribution from both HYHA and Hopkins Public Schools. Additionally, that bonding
amount allows bonding for the Parks Improvement Fund contribution of $600,400. The tota.l
project cost based on the construction low bids a�ld quotes is $5.$ Inillion. Sta.ff is intending to sell
bonds to cover the cost of this 2018 work.
Supportin� Information,
• Resolution 2018-01
.�
r�
;�
���-=� �
�� � �
Steven J. Stadler
Public Works Director
CITY OF HOPI�:Il�TS,IV��TNESOTA
RESOLUTION NO. 2018-010
DECLA�RIl�TG THE OFFICIAL INTENT OF THE
CITY OF HOPI�:Il�TS TO REIlViBURSE ..
CERTAIN EXPENDITI:�tES FROM T�IE PROCEEDS
OF BONDS TO BE ISSUED BY THE CITY
VVI�REAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-2 (the "Reimbursement
Regulations") providing that proceeds of tax-exempt bonds used to reimburse prior expenditures Will not be
deemed spent unless certain requirements are met; and
UVHEREAS, the City of Hopkins, Minnesota (the "Ci.ty") expects to incur certain expenditures that
may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of a tax-exempt
bond;
WI�REAS, the City has determined to make this declaration of off'icial intent ("Declaration") to
reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HOPI�:II�TS
AS FOLLOWS:
1. The City owns an ice hockey and multipurpose facility known as the Hopkins Pavilion, located
at 11000 Excelsior Boulevard in the City (the "Facility"), and the Hopkins Youth Hockey Association, a
Minnesota nonproiit corporation (the "Association"), currently uses the ice arena within the Facility (the "Ice
Arena") and rents space in the Ice Arena on an annual basis for its youth hockey activities.
� 2. The City proposes to finance the construction of certain improvements to the Facility (the
"Proj ect") .
3. The City reasonably expects to reunburse the expenditures made for certain costs of the
Project from the proceeds of bollds in an estimated maximum principal amount of appro�mately $3,800,000.
All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures
eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations.
4. The Association is a nonprofit organization exempt from federal income taxation under
Section 501(a) of the Code, as a result of the applicatlon of Section 501(c)(3) of the Code. Because the
Association will be a user of the Ice Arena, the City expects to designate the bonds as qualified 501(c)(3) bonds
pursuant to Section 145 of the Code.
5. This Declaration has been made not later than sixty (60) days after paynlent of any original
expenditure to be subject to a reimbursement allocation with respect to the proceeds of bonds, except for
the following expenditures: (a) costs of issuance of bonds; (b) costs in an a�ount not in excess of $100,000
or five percent (5%) of the proceeds of an issue; or (c) "preliminary expenditures" up to an amount not in excess
of twenty percent (20%) of the aggregate issue price of the issLte or issues that finance or are reasonably
expected by the City to finance the proj ect for which the preliminary expenditures were incurred. The term
"preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that
are incurred prior to commencement of acquisition, construction or rehabilita.tion of a proj ect, other than land
acquisition, site preparation, and similar costs incident to commencement of construction. �
515114v1 JAE HP110-98
6. This Declaration is an expression of the reasonable expectations of the City based on the
facts and circumstances known to the City as of the date hereof. The anticipated original expenditures for
the Proj ect and the principal amount of the bonds described in paragraph 3 are consistent with the City's
budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City
are, or are reasonably expected to be, reserved, allocated on a long-term basis, or otherwise set aside
pursuant to the City's budget or financial policies to pay such Project expenditures.
7. This Declaration is intended to constitute a declaration of official intent for purposes of the
Reimbursement Regulations.
Approved this 5� day of February, 2018, by the City Council of the City of Hopkins, Minnesota.
Mayor
Attest:
City Clerk
515114v1 JAE HP110-98 2