Title:
Title
Declaration of Official Intent to Reimburse the City from Bond Proceeds for Certain Expenditures Related to the Ballroom Component of the Sacramento Convention Center
End
FileID
File ID: 2019-00827
Location
Location: District 4
Recommendation:
Recommendation
Adopt a Resolution declaring the City’s “official intent” to reimburse itself from bond proceeds for certain expenditures associated with the ballroom component of the Sacramento Convention Center Expansion Project.
Contact: Brian Wong, Debt Manager, (916) 808-5811, Office of the City Treasurer
Body
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: The Sacramento Tourism Infrastructure District was formed last October for the primary purpose of levying a new business-based assessment that will be used to secure the payment of bonds issued to finance the ballroom component of the Sacramento Convention Center (“Project”).
To meet some of the Project’s financing needs, the City anticipates issuing Sacramento Tourism Infrastructure District Bonds (“STID Bonds”) in late summer or early fall 2019. Before the STID Bonds are issued, the City expects to pay certain Project costs so that the Project can stay on schedule. Later, after the STID Bonds have been issued, the City will reimburse itself from the proceeds for those costs.
The proposed resolution declaring the City’s “official intent” to reimburse itself from the bond proceeds is required by section 1.150-2 of the Treasury Regulations (“Section 1.150-2”) if interest on the bonds is to be exempt from federal taxation.
Policy Considerations: The resolution is adopted solely to comply with Section 1.150-2. It does not bind the City to make any expenditure, incur any indebtedness, or proceed with the Project.
Economic Impacts: Not applicable
Environmental Considerations: Not applicable
Sustainability: Not applicable
Commission/Committee Action: Not applicable
Rationale for Recommendation: Section 1.150-2 requires that the City Council declare its “official intent” to reimburse the City from the proceeds of the STID Bonds (i.e., from the “proceeds of an obligation”) for expenditures made before the STID Bonds are issued.
Financial Considerations: There are no financial considerations with the proposed actions. Any reimbursement to the City will only occur after the STID Bonds have been issued. The contracts to be awarded have been or will be entered into in compliance with the City’s procurement policy.
Local Business Enterprise (LBE): Not applicable