HomeMy WebLinkAbout1995.06.05 RESO 1995-0007RESOLUTION NO. 1995 - 7
RESOLUTION ESTABLISHING PROCEDURES
RELATING TO COMPLIANCE WITH REIMBURSEMENT BOND
REGULATIONS UNDER THE INTERNAL REVENUE CODE
BE IT RESOLVED by the City Council (the "Council") of the City of
Hugo, Minnesota (the "City"), as follows:
1. Recitals.
(a) The Internal Revenue Service has issued final Treasury
Regulations Section 1.103-18 (the "Regulations") dealing with
reimbursement bond proceeds, which would include those proceeds of
the City,s bonds to be used to reimburse the City for any pro et
expenditure paid by the City prior to the time of the issuance cof
those bonds.
(b) The Regulations generally require that the City make a
prior declaration of its official intent to reimburse itself for
such prior expenditures out of the proceeds of subsequent
borrowings, that such declaration generally be made on or before
the date the expenditure is actually paid, that the bonding occur
and the reimbursement allocation be made from the proceeds of such
bonds within one year of the payment of the expenditure (or not
later than one year after the project is placed in service, if
that is a longer period), and that the expenditure be a capital
expenditure.
(c The City desires to comply with the Regulations and to
establish certain procedures relating thereto.
(d) The Cityls bond counsel has advised the City that the
Regulations do not apply, and hence the provisions of this
Resolution are intended to have no application, to payments of
City project costs first made by the City out of the proceeds of
bonds issued prior to the date of such payments.
2. The Regulations, in the
situations in which they apply, require the City to have made an
official declaration of its reasonable intention (hereinafter referred
to as the "Official Intent Declaration" or the "Declaration") to
reimburse itself for previously paid project expenditures out of the
proceeds of subsequent bonds or other borrowings. The Council hereby
authorizes the City Clerk -Treasurer to make the City -*s Official Intent
Declarations or to delegate from time to time that responsibility to
other appropriate City employees. Each Declaration shall comply with
the requirements of the Regulations, including without limitation the
following:
(a) Each Declaration shall be made on or before the date the
City pays the applicable project cost and shall state that the
City reasonably intends and expects to reimburse itself for the
expenditure with proceeds of a borrowing. Each Declaration may be
made substantially in the form of the "Declaration of Official
Intent" which is attached to and made a part of this Resolution.
(b) Each Declaration shall specifically contain the following
statement: "This Declaration is a declaration of official
intent under Treasury Regulations Section 1.103-18."
(c) Each Declaration shall and is hereby declared to be made
and filed in the publicly available official books, records, or
proceeding of the City which shall be reasonably available for
public inspection at City Hall during normal business hours of the
City on every business day during the period beginning on the
earlier of 10 days after the making of the Declaration or the date
of issuance of the reimbursement bonds and ending on the day after
the issuance of such bonds.
(d) Each Declaration shall, at a minimum, contain a general
functional description of theproperty, project, or program for
which the expenditure to be reimbursed is paid (for example, 111995
Post Office Land Acquisition and Improvement Project" or other
specific identifiable project of the City) or, in the
alternative, shall identify the particular fund or account of the
City from which the expenditure to be reimbursed is paid,
including a description of the general functional purpose of that
fund or account (for example, "Capital Facilities and Equipment
Fund").
(e) Each Declaration shall also contain a statement of the
maximum principal amount of the debt expected to be issued for the
subject project.
(f) Care shall be taken so that the City, or its authorized
representatives under this Resolution, not make Declarations in
cases where the City does not reasonably expect that it will
ultimately issue reimbursement bonds to provide long-term
financing for the subject project costs, and the City officials
are hereby authorized to consult with bond counsel to the City
concerning the requirements of the Regulations in general and
their application in particular circumstances. It is the
Council's intention that Declarations not be made (i) when
available funds of the City have been or are reasonably expected
to be dedicated or otherwise reserved to fund'on a long-term basis
the particular expenditures involved or (ii) when it is not
reasonably expected that reimbursement bonding will occur.
g The Council shall be advised from time to time on the
desirability and timing of the issuance of reimbursement bonds
relating to project expenditures for which the City has made
Official Intent Declarations, including recommendations on the
timing of the issuance of such bonds so that the "reimbursement
allocation" described in the Regulations and in paragraph 3 below
can be made within the 1 year time limits prescribed in the
Regulations.
(h) This Resolution shall supplement and amend all prior
determinations and policies adopted by the City in regard to
complying with the Regulations, as initially proposed, and in the
event of any inconsistency between the terms provided in this
Resolution and said prior determinations or policies, the
provisions of this Resolution shall govern.
3. Reimburs ent Al ocations. The designated City officials
shall also be responsible for making the "reimbursement allocations"
described in the Regulations, being generally the transfer of the
appropriate amount of reimbursement bond proceeds to reimburse the
source of temporary financing used by the City to make payment of the
prior expenditure. Each allocation shall be evidenced by an entry on
the official books or records of the City maintained for such
reimbursement bonds; shall specifically identify the actual prior
expenditure being reimbursed or, in the case of the reimbursement of a
particular fund or account, the fund or account from which the
expenditure was paid; and shall be effective to relieve the bond
proceeds involved from any restriction under the bond resolution or
other relevant legal documents for those bonds and under any applicable
state statute applicable to unspent proceeds of such bond issue.
Adopted this 5th day of June, 1995, by the Hugo City Council.
Declaration of Official Intent
The undersigned, being the duly appointed and acting City Clerk -
Treasurer of the City of Hugo, Minnesota (the "City"), pursuant to and
for purposes of compliance with Treasury Regulations Section 1.103-18
(the "Regulations") under the Internal Revenue Code of 1986, as
amended, hereby states and certifies as follows:
1. The undersigned has been and is on the date hereof duly
authorized by the governing body of the City, the Cit, Council to make
and execute this Declaration of official Intent (the "Declaration") for
and on behalf of the City. This Declaration is a declaration of
official intent under Treasury Regulations Section 1.103-18.
2A. The property, project, or program to which this Declaration
relates is generally and functionally described as follows: 1995 Post
Office Land Acquisition and Improvement Project.
2B. The specific fund or account of the City from which the
expenditure to be reimbursed will be paid, and the general functional
purpose of that fund or account, are as follows: Capital Facilities
and Equipment Fund.
3. The maximum principal amount of the debt expected to be issued
by the City for the purpose of reimbursing the expenditures to which
this Declaration relates (the "Expenditures") is on the date hereof
reasonably estimated to be $405,262.52. Each of the Expenditures is
(or would be with a proper election) a capital expenditure under
federal tax law principles, as described in the Regulations.
4. The City intends and reasonably expects to reimburse itself
for the payment of the Expenditures out of the proceeds of a borrowing
(the "Bonds") to be made by the City after the date of payment of the
Expenditures.
5. As of the date hereof, there are no sources of City funds
which have been or are reasonably expected to be allocated or provide
on a long-term basis, reserved, or otherwise set aside to provide
permanent financing for the Expenditures, other than pursuant to the
subsequent issuance of the Bonds. On the basis of the foregoing, the
statements and certifications contained in this Declaration are
believed to be consistent with the City's budgetary and financial
circumstances as they exist or are reasonably foreseeable on the date
hereof, all within the meaning and content of the Regulations.
6. This Declaration is and shall remain a part of the publicly
available official books, records, or proceedings of the City and shall
be continuously available for inspection by the general public at City
Hall during regular City hours for a period ending not earlier than the
day after the issuance of the Bonds.
IN WITNESSWHEREOF, the undersigned has executed this Declaration
and placed it on file in the official City records this 5th day of
June, 1995.
Upon roll call, the following Council members voting AYE: Barnes,
Goiffon, LaValle, and Miron.
Upon roll call, the following Council members voting NAY: None.
Whereupon said resolution was declared passed and adopted this 5th of
June, 1995.
n;'060
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ATTEST:
MaryAMS Creager, Ci&V C er
The undersigned, being the duly qualified and acting City Clerk -
Treasurer of the City of Hugo, Minnesota, hereby certifies the
following:
The foregoing is a true and correct copy of a Resolution on file
and of official, publicly available records in the offices of the City,
which Resolution relates to procedures of the City for compliance with
certain IRS Regulations on reimbursement bonds.id Resolution was
duly adopted by the governing body of the City on S , 1995.
Said meeting was duly called, regularly held, o o e public, and
held at the pl ce which meetings of the Council are regularly held.
Councilmember moved the ado ti f the Resolution which
motion was seconded y Councilmember A vote being taken
on the motion, the following members of the Council voted in favor of
the motion to adopt the Resolution: g"
and the following voted a �
g ainst the sam/
Whereupon said Resolution was declared passed and adopted. The
Resolution is in full force and effect and no action has been taken by
the Council which would in any way alter or amend the Resolution.
WITNESS MY HAND offici�ly as City Clerk -Treasurer of the City
of Hugo, Minnesota, this � day of , 1995.
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City C k -Treasurer
City OY Hugo, Minnes