HomeMy WebLinkAbout2004-042 Council ResolutionCITY OF LINO LAKES
RESOLUTION NO. 04-42
RESOLUTION RELATING TO FINANCING OF CERTAIN PROPOSED PROJECTS
TO BE UNDERTAKEN BY THE CITY OF LINO LAKES; ESTABLISHING
COMPLIANCE WITH REIMBURSEMENT BOND REGULATIONS UNDER THE
INTERNAL REVENUE CODE
(LEGACY AT WOODS EDGE)
WHEREAS, the City of Lino Lakes is in the practice of constructing certain
improvements and in some instances reimbursing itself for the cost of any portion of the
improvements with bond proceeds, and
WHEREAS, the Internal Revenue Service has issued proposed Treasury
Regulations Section 1.103 -17 (as proposed and /or finally adopted, the "Regulations")
dealing with the issuance of bonds where all or a portion of the proceeds are to be
used to reimburse the City for any project costs paid by the City prior to the time of the
issuance of the bonds, and
WHEREAS, the Regulations generally required that the City make a prior
declaration of its official intent to reimburse itself for such prior expenditures out of the
proceeds of a subsequently issued taxable or tax exempt borrowing, that such
declaration generally be made prior to but not more than two years before the time the
expenditure is actually paid, that the borrowing occur and the reimbursement allocation
be made from the proceeds of such borrowing within one year of the payment of the
expenditure or, if longer, within one year of the date the project is placed in service,
and the expenditures relate to property having a reasonably expected economic life of
at least one year
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Lino Lakes,
Anoka County, Minnesota, that:
1. Official Intent - The City desires to comply with requirements of the Regulations with
respect to certain projects hereinafter identified.
a. The City proposes to undertake road and utility improvements in conjunction with
the Legacy at Woods Edge and YMCA Development projects.
b. Other than costs to be paid or reimbursed from sources other than a tax - exempt
borrowing or costs permitted to be reimbursed pursuant to the transaction
provision of section 1.103 -17(1) of the Regulations, none of the costs of the
foregoing projects has heretofore been paid by the City and none of the costs
will be paid by the City until after the date to this Resolution. Each of the
projects and costs related thereto, constitutes property having a useful life of at
least one year
c. The City intends to reimburse itself for the payment of the designated project
costs out of the proceeds of a tax exempt bond issue, debt or similar borrowing
(the "Bonds ") to be issued by the City after the date of payment of all or a portion
of the costs. - Pending the issuance of the Bonds, the City reasonably expects to
pay and temporarily finance the costs relating to this project.
d. The Bonds are proposed to be issued by the City pursuant to the provisions of
Minnesota Statutes, Chapter 475, and other applicable statutory authority. The
reasonably expected sources of funds to be used by the City to pay the debt
service on the Bonds are special assessments.
2. Budgetary Matters As of the date hereof, there are no City funds reserved or
otherwise allocated pursuant to the City's budget (or expected to be reserved or
allocated pursuant to the City's budget) to provide permanent financing for the
bonding portion of the project costs, other than pursuant to the issuance of the
Bonds. Furthermore, there has been no allocation, budgeting, or restriction of
moneys (or the adoption of a requirement or policy to reimburse a fund) as part of
the City's budgetary process, the primary purpose of which is to prevent moneys
from said sources from being available for the permanent financing of the costs of
the projects. This resolution, therefore, is determined to be consistent with the
City's budgetary and financial circumstances as they exist or are foreseeable on the
date hereof, all within the meaning and content of the Regulations.
3. Filing - This resolution shall be filed in the publicly available official books, records,
or proceedings of the City, which shall be continuously available for inspection by
the general public. This resolution shall be available for inspection at City Hall
during normal business hours of the City on every business day the period
beginning on the earlier of 10 days after the adoption hereof or the date of issuance
of the reimbursement bonds and ending on the day after the issuance of such
bonds.
4. Reimbursement Allocation - The City's financial officer shall be responsible for
making the "reimbursement allocations" described in the Regulations, being
generally the transfer of the appropriate amount of proceeds of the Bonds to
reimburse the source of temporary financing used by the City to make payment of
the prior costs of the projects. Each allocation shall be evidenced by an entry on
the official books and records of the City maintained for the Bonds, shall specifically
identify the actual prior expenditure being reimbursed, and shall be effective to
relieve the proceeds of the Bonds from any restriction under the bond resolution. or
• other relevant legal documents for the Bonds, and under any applicable state or
federal statute, which would apply to the unspent proceeds of such bond issue.
Adopted by the City Council this 22 "tl day of March, 2004.
STAFF ORIGINATOR:
CITY COUNCIL
MEETING DATE:
TOPIC:
VOTE REQUIRED:
BACKGROUND:
AGENDA ITEM 7B (iii)
Michael .Grochala
March .22, .2004
Resolution No. 04-42,
Declare Intent to Bond. Legacy at Woods
Edge
3/5 simple majority
The City Council is considering authorizing preparation of a report on improvements for
the proposed Legacy at Woods Edge. It is possible that the proposed public
improvements will be financed from bond proceeds.
The Internal Revenue Code requires Cities to declare its intent to reimburse project
costs from bond proceeds prior to encumbering project costs. This is a non - binding
declaration that must take place in order to finance projects in this manner.
RECOMMENDATION
Staff is recommending adoption of Resolution No 04 -42
ATTACHMENTS
Resolution No. 04-42