HomeMy WebLinkAboutResolution - 91-244 - Relating to Reimbursement of Costs from Bond Proceeds - 11/05/1991 •
RESOLUTION NO. 91-244
RESOLUTION ESTABLISHING PROCEDURES RELATING
TO COMPLIANCE WITH REIMRURSEMEN BOND
REGULATIONS UNDER THE INTERNAL REVENUE CODE
BE IT RESOLVED by the City Council (the "Couneil") of
the City of Eden Prairie , Minnesota (the "City") , as
follows:
Section 1 . Recitals.
1.01. The Internal Revenue Service has issued proposed
Treasury Regulations, Sections 1. .103-17 and 1 .103--18 relating to
"reimbursement bondsll : The term "reimbursement bond" means that
portion of a bond issue the proceeds of which are allocated to
reimburse an expenditure that was paid prior to the date of issue
of the bond issue. The term "reimbursement bond" does not
• include, and this resolution does not apply to, that portion of a
bond issue the proceeds of which are allocated to pay or reimburse
an expenditure that is paid on or after the date of issue of the
bond issue.
1.02. The Regulations generally require that, prior to
making an expenditure with respect to the acquisition or
construction of property (a "project expenditure') which the City
proposes to reimburse itself for from reimbursement bond proceeds,
the City make a declaration of its official intent (a
"Declaration") to reimburse itself for such project expenditure
out of the proceeds of subsequently issued taxable or tax exempt
bonds or other obligations (a "subsequent borrowing") ; that such
declaration generally be made on a date not more than two years
before the date of the expenditure; that the subsequent borrowing
occur and a reimbursement allocation be made from the proceeds of
the subsequent borrowing within one year after the project
expenditure is made or the property with respect to which it is
made is placed in service, whichever is longer; and that the
project expenditure relate to property having a reasonably
expected economic Life of at least one year.
1.03 . The purpose of this Resol.utiori• is to establish
certain procedures to be followed by designated City officers to
comply with the requirements of the Regulations. The procedures
established hereby are not exclusive. This Council reserves the
• right to make Declarations from time to time with respect to
certain project expenditures at its discretion and to amend this
resolution to comply with changes in the Regulations :
-1--
Section 2. n 01aration of Offir-IFil. Tntant. The
Council, hereby authorizes and directs the City Finance Director
to make the City's 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:
(1) Each Declaration shall be made prior to the time
the City pays the applicable project expenditure (except for
project expenditures, not reasonably forseeable within the
meaning of section 1. 103-17 (h) of the Regulations) and shall
state that the City intends to reimburse itself for the
project expenditure out of the proceeds of a subsequent
borrowing. A Declaration may relate to project expenditures
for all or a portion of a single capital improvement project
and to one or more such projects . Each Declaration may be
made substantially in the form of the Exhibit A which is
attached to and made a part of this Resolution.
(2) Each Declaration shall and is hereby declared to
comprise part of the official books, records, and proceedings
of the City, and shall be maintained as a public record in
the office of the City Clerk. Each Declaration shall be
available for inspection by the general public during normal
• business hours of the City, on every business day during the
period beginning on the earlier of 1.0 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.
(3) Each Declaration shall contain a reasonably
accurate general functional description of the type and use
of the property for which the project expenditure to be
reimbursed is paid, including the anticipated size, quantity
or cost of the property and other information sufficient so
that a person who is not familiar with the property would
generally understand the nature and function of that
property.
(4) Each Declaration shall identify the: reasonably
expected source or sources of funds that will be used by the
City to pay the reimbursement expenditure (prior to and in
anticipation of the issuance of the reimbursement bonds) ,
together with the reasonably expected source or sources of
funds to be used by the City to pay the debt service on the
reimbursement bonds.
(5)' The City Finance Director. is hereby authorized to
revise or withdraw a Declaration if and to the extent, as a
result of changed circumstances, the Declaration no longer
• reflects the intent of the City.
(6) Care shah, be taken so that the City, or its
authorized representatives under this Resolution; not make
Declarations in cases where the City will not ultimately be
issuing reimbursement bonds to provide long-term financing
for the subject project costs, and the City officials are
hereby authorized to consult with band counsel to the City
concerning the requirements of the Regulations in general and
their applioation in particular circumstances.
(7) ' The City Finance Director shall advise the Council
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 Declarations,
including recommendations on the timing of the issuance of
such bands so that reimbursement allocations required by the
Regulations can be made within the' time limits prescribed in
the Regulations ,
Section 3 . R en'- Al Io ,anions. The City Finance Director
is also
authorized and directed to make, the reimbursement allocations
• described in the Regulations ("reimbursement allocations") with
respect to project expenditures that are the subject of
Declarations made pursuant to this resolution or otherwise, being
generally the transfer promptly, Following the receipt thereof of
the appropriate amount of reimbursement bond proceeds to reimburse
the source of temporary financing used. by the City to make payment
of the project expenditure. Each reimbursement allooation shall
be evidenced by an entry an the official books of the City
maintained for such reimbursement bonds, shall specifically
identify the project expenditure being reimbursed and shall be
effective to relieve the bond proceeds so allocated from any
restriction under the band resolution and under any state statute
governing the expenditure of the bond proceeds .
PTED by-the City Council of the City of Eden Prairie this IqJ day
of 1991.
Douglas B Tenpas, TLyUr
ATTEST:
1 . Frane, City Clerk