Title
Reimbursement Resolution Related to the Sweetwater Branch Creek Construction Project (B)
This item involves a request for the City Commission to adopt the proposed resolution, which provides the opportunity for the City to issue tax-exempt debt, to fund the settlement with CEM Enterprises, Inc. related to the Sweetwater Branch Creek Construction Project.
Explanation
At the July 14th City Commission meeting, the Commission approved a $900,000 settlement agreement with CEM Enterprises, Inc. to settle a lawsuit with CEM related to the Sweetwater Branch Creek Construction Project. The fiscal impact section of the agenda item approved by the Commission on the 14th proposed that the General Fund would make a short-term loan to the Solid Waste Fund to make the settlement payment. Subsequently, $900,000 would be added to the debt issue scheduled in 2009 to fund portions of the FY09 - FY13 CIP. This incremental $900,000 in debt proceeds would go to the General Fund to repay the short-term loan. The Solid Waste Fund would then be responsible for paying the debt service on the $900,000 over the term of the bond issue. In this way, the rate impact on Solid Waste fees resulting from the settlement would be spread over the term of the bond.
In compliance with Treasury regulations, in order to be able to issue tax-exempt debt for the purposes of reimbursing previously incurred project costs, a reimbursement resolution must be adopted by the City Commission within 60 days from the date the cost was incurred. The settlement payment was made to CEM, Inc. on August 3, 2008.
Fiscal Note
Adoption of this resolution will allow the City to issue tax-exempt debt to reimburse the General Fund for the settlement payment made to CEM, Inc.
Recommendation
The City Commission adopt the proposed reimbursement resolution.