Memorandum

City of Lawrence

Finance Department

TO:	Dave Corliss, City Manager
FROM:	Ed Mullins, Finance Director
CC:	Dave Wagner, Utilities Director
Date:	September 17, 2008
RE:	Resolution    Revenue Bond Reallocation

Please include Resolution No. 6805 on a future City Commission agenda for the reallocation of approximately $11.8 million in proceeds from the Series 2007 water and sewer revenue bond.

Description   With the re-evaluation of the beginning of construction for the Wakarusa Wastewater Treatment Plant, the city has nearly $12 million in bond proceeds that should be reallocated to other projects.  Tax exempt bond issues are subject to Internal Revenue Service regulations that require spending the proceeds within specific time limits or paying a penalty based upon calculated excess interest earnings.  In order to eliminate or minimize this penalty, it is recommended that proceeds from the Series 2007 water and sewer revenue bond issue be reallocated to projects on the attached spreadsheet. 

Project Status   The projects have previously been approved for funding with bond proceeds by the City Commission.  In addition these projects, it is anticipated that the Utilities Department will construct over $8.3 million with cash.  The list of cash financed projects is also attached.  All of the projects have been included in the utilities master plan and were considered when recommending the 2009 water and sewer rates.

Action Requested   Adopt Resolution No. 6805, authorizing the reallocation of Series 2007 water and sewer revenue bonds in the amount of $11,825,000. 

Att:     Resolution No. 6805

2008 Water and Sewer Project Descriptions