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HomeMy WebLinkAbout1993.05.03 RESO 1993-0007RESOLUTION NO. 1993-7 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 project expenditure paid by the City prior to the time of the issuance of 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 City's 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. Official Intent Declaration. 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 proceedings 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 the property, project, or program for which the expenditure to be reimbursed is paid (for example, 111992 Street Improvement Project" or other specific, identifiable project of the City) or, in the alterative, 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, "park and recreation fund - recreational facility capital improvement program"). (e) Each Declaration shall also contain a statement of the maximum principal amount of 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. 2 (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. Reimbursement Allocations. 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 3rd day of May, 1993, 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 City 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. [Note: the following paragraphs 2A and 2B are alternatives; one or the other of those paragraphs must be completed, both may be, if applicable.] 2A. The property, project, or program to which this Declaration relates is generally and functionally described as follows: 1993 Water System Improvements 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: Water & Sewer Utility 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 $ 1,230,000 . 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. i 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 available 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 on the foregoing, the statements and certifications contained in this Declaration are believed to be reasonable and accurate, and this Declaration is 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 WITNESS WHEREOF, the undersigned has executed this Declaration and placed it on file in the official City records this 3rd day of May , 1993. Upon roll call, following Council members voting AYE: Debra Barnes, Bernard Brunotte, Fran Miron, Walter L. Stoltzman Voting NAY: None Whereupon said resolution was declared passed and adopted this 3rd day of May, 1993. Gr1Agkw_ Walter L. Stoltzman, Mak6r ATTEST: Mary,/47 ary Creager, City Cl The undersigned, being the duly qualified and acting City Clerk -Treasurer of the City of Hugo, Minnesota, hereby certifies the following: The foregoing is true and correct copy of a Resolution on file and of official, publicly available record in the offices of the City, which Resolution relates to procedures of the City for compliance with certain IRS Regulations on reimbursement bonds. Said Resolution was duly adopted by the governing body of the City (the "Council") at a regular or special meeting of the Council held on May 3, 1993. Said meeting was duly called, regularly held, open to the public, and held at the place at which meetings of the Council are regularly held. Councilmember Debra Barnes . moved the adoption of the Resolution, which motion was seconded by Councilmember Fran Miron 0 A vote being taken on the motion, the follow ng members of the Council voted in favor of the motion to adopt the Resolution: Debra Barnes, Bernard Brunotte, Fran Miron, Walter L. Stoltzman and the following voted against the same: NONE Whereupon said Resolution was declared duly 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 officially as the City Clerk -Treasurer of the City of Hugo, Minnesota, this 3rd day of May, 1993. /U'"� Z�� &44_0� C ty erk-Treasurer Ci f Hugo, Minnes