HomeMy Public PortalAbout1991-63CITY OF , MINNESOTA
RESOLUTION NO.�-
DECLARING THE OFFICIAL INTENT OF THE CITY OF
TO REIMBURSE CERTAIN
EXPENDITURES FROM THE PROCEEDS OF TAXABLE OR
TAX-EXEMPT BONDS TO BE ISSUED BY THE CITY
BE IT RESOLVED by the City Council of the City of
Minnesota (the "City") as follows:
Section 1. Recitals.
1.01 The Internal Revenue Service has issued proposed new Tres. Reg.
§ 1.103-17 (the "Reimbursement Rules") providing that proceeds of tax-exempt
bonds used to reimburse prior expenditures will not be deemed spent unless certain
requirements are met.
1.02 The City has incurred certain expenditures since September 8, 1989
and expects to incur certain additional expenditures, all of which may be financed
temporarily from sources other than taxable or tax-exempt bonds, and reimbursed
from the proceeds of a taxable or tax-exempt bond.
1.03 The new reimbursement rules will apply to bonds issued after
September 7, 1991.
1.04 The Reimbursement Rules require that the allocation of proceeds of
the bonds to be issued to reimburse any expenditures will be made not later than
the later of one year after the expenditure was paid or one year after the property
was placed in service.
1.05 The expenditures to be reimbursed must have a reasonably expected
economic life of at least one year, in that they are, or are to be incorporated in or
become a part of, a facility, are properly changeable to or may be capitalized as
part of the basis of the facility, and if the City were subject to federal income
taxation, would be depreciable over the facility's economic life.
1.06 Expenditures made between September 8, 1989 and September 7,
1991, may be reimbursed as described in Section 1.02 herein only if there is
objective evidence that, at the time the expenditures were paid, the City
reasonably expected to reimburse such expenditures with proceeds of a taxable or
tax exempt borrowing.
1.07 If any future expenditure to be reimbursed is not made within two
years of the date of this Resolution, this Resolution may be updated to the extent
such expenditure is still expected to be reimbursed with bond proceeds at a later
date.
1.08 Proceeds of the bonds issued to reimburse the expenditures described
in Exhibit A will be deemed spent only when (1) an allocation entry is made on the
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books or records of the City with respect to the bonds; (2) the entry specifically
identifies an actual expenditure to be reimbursed; and (3) the allocation is
effective to relieve the bond proceeds from restrictions on unspent proceeds under
applicable documents and state laws.
1.09 None of the proceeds of the bonds issued to reimburse the City for
expenditures will be used (i) to refund another tax-exempt governmental issue or
(ii) to create or increase the balance in a sinking fund or replace funds used for
such purpose, or (iii) to create or increase the balance in a reserve or replacement
fund or replace funds used for such purposes, or (iv) to reimburse an expenditure
originally paid with the proceeds of another tax-exempt bond obligation; unless (i)
such amounts are deposited in a bona fide debt service fund, or (ii) the original tax-
exempt issue was not reasonably expected to be used to finance the expenditure.
Section 2. Intent Declared.
2.01 The City reasonably expects to expend moneys after the date hereof
from the sources described in Exhibit A on a temporary basis to pay the
expenditures described in Exhibit A. The City reasonably expects to reimburse
itself for such expenditures from the proceeds of taxable or tax-exempt bonds, the
debt service for which is expected to be paid from the sources described in Exhibit
A.
2.02 The City also expended certain moneys between September 8, 1989
and the date hereof from the sources described in Exhibit A. At the time of those
expenditures, the City reasonably expected to reimburse the expenditures from the
proceeds of taxable or tax exempt bonds, the debt service for which is expected to
be paid from the sources described in Exhibit A. Objective evidence of the City's
reasonable expectations regarding such reimbursement is summarized in Exhibit B.
2.03 The City Administrator is authorized to designate appropriate
additions to Exhibit A in circumstances where time is of the essence, and any such
designation shall be reported to the City Council at the earliest practicable date
and shall be filed with the official books and records of the City at the times and in
the manner provided in Section 2.04.
2.04 This resolution shall be maintained as part of the books and records
of the City at City Hall, and shall be continuously available during normal business
hours of the City on every business day of the period beginning not more than 10
days after adoption of this resolution and ending on the last date of issue of any
bonds issued to reimburse expenditures described in Exhibit A.
2.05. This Resolution 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 reimbursements set forth at Exhibit A are consistent with the
City's budgetary and financial circumstances. No sources other than those
described at Exhibit A are expected to be allocated to such expenditures on a long
term basis pursuant to the City's budget. The City has not made any allocation,
budget, or restriction of moneys or adopted any requirement or policy to reimburse
a fund, the primary purpose of which is to prevent moneys from being deemed to be
available to pay an expenditure the City intends to reimburse with proceeds of a
borrowing.
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2.06 This Resolution is intended to constitute official intent for purposes
of proposed Tres. Reg. § 1.103-17 and any successor law, regulation or ruling. This
resolution shall be modified to the extent required or permitted by Tres. Reg.
§ 1.103-17 as finally adopted, or any successor law, regulation or ruling.
Approved by I»e City Council of the City of �-,c-I�y.,/ this
_ day of �%,,z, 1991.
Attest:
City
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EXHIBIT A
TO OFFICIAL INTENT RESOLUTION
ADOPTED , -1991
Expected Expected
Description of Estimated Size, Temporary Source to
Property or Quantity Financing pay Bond
Project or Cost Source Debt Service
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EXHIBIT B
TO OFFICIAL INTENT RESOLUTION
ADOPTED , 1991
OBJECTIVE EVIDENCE THAT CITY REASONABLY EXPECTED TO REIMBURSE
CERTAIN PAST EXPENDITURES WITH TAXABLE OR TAX EXEMPT BOND PROCEEDS
The City paid approximately $ from
through for engineering studies and reports related
to Improvement Project No. as described in Exhibit A (the "Expenditures").
The City reasonably expected to reimburse iteself for the Expenditures from the
proceeds of taxable or tax exempt debt, as supported by the following evidence:
1. It has been the City's consistent practice to reimburse engineering and
various administrative costs for public improvement projects out of bond proceeds.
This practice has been followed in every public improvement bond issue in the past
years, which includes the following issues:
2. During the period of , through
the City's expectation to reimburse the Expenditures from bond proceeds was
consistent with the City's budgetary and financial circumstances. The City did not at
that time have funds allocated on a long-term basis, reserved or otherwise available
under the City's budget to pay for the Expenditures, as evidenced by the City's
budget and financial records on file in City Hall.
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