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RESOLUTION NO. 1993-7 <br />RESOLUTION ESTABLISHING PROCEDURES <br />RELATING TO COMPLIANCE WITH REIMBURSEMENT BOND <br />REGULATIONS UNDER THE INTERNAL REVENUE CODE <br />BE IT RESOLVED by the City Council (the "Council") of the City <br />of Hugo, Minnesota (the "City"), as follows: <br />1. Recitals. <br />(a) The Internal Revenue Service has issued final <br />Treasury Regulations Section 1.103-18 (the "Regulations") <br />dealing with reimbursement bond proceeds, which would include <br />those proceeds of the City's bonds to be used to reimburse the <br />City for any project expenditure paid by the City prior to the <br />time of the issuance of those bonds. <br />(b) The Regulations generally require that the City make <br />a prior declaration of its official intent to reimburse itself <br />for such prior expenditures out of the proceeds of subsequent <br />borrowings, that such declaration generally be made on or <br />before the date the expenditure is actually paid, that the <br />bonding occur and the reimbursement allocation be made from <br />the proceeds of such bonds within one year of the payment of <br />the expenditure (or not later than one year after the project <br />is placed in service, if that is a longer period), and that <br />the expenditure be a capital expenditure. <br />(c) The City desires to comply with the Regulations and <br />to establish certain procedures relating thereto. <br />(d) The City's bond counsel has advised the City that <br />the Regulations do not apply, and hence the provisions of this <br />Resolution are intended to have no application, to payments of <br />City project costs first made by the City out of the proceeds <br />of bonds issued prior to the date of such payments. <br />2. Official Intent Declaration. The Regulations, in the <br />situations in which they apply, require the City to have made an <br />official declaration of its reasonable intention (hereinafter <br />referred to as the "Official Intent Declaration" or the <br />"Declaration") to reimburse itself for previously paid project <br />expenditures out of the proceeds of subsequent bonds or other <br />borrowings. The Council hereby authorizes the City Clerk -Treasurer <br />to make the City's Official Intent Declarations or to delegate from <br />time to time that responsibility to other appropriate City <br />employees. Each Declaration shall comply with the requirements of <br />the,Regulations, including without limitation the following: <br />