HomeMy WebLinkAbout2012-008 (FINANCING OF CERTAIN PROPOSED PROJECTS BY CITY; ESTABLISHING COMPLIANCE REIMBURSEMENT BOND REGULATIONS UNDER INTERNAL REVENUE CODE)RESOLUTION 2012 -08
RESOLUTION RELATING TO FINANCING OF CERTAIN PROPOSED
PROJECTS TO BE UNDERTAKEN BY THE CITY OF STILLWATER;
ESTABLISHING COMPLIANCE WITH REIMBURSEMENT BOND
REGULATIONS UNDER THE INTERNAL REVENUE CODE
BE IT RESOLVED by the City Council (the Council) of the City of Stillwater, Minnesota (the City) as
follows:
1. Recitals.
a. The Internal Revenue Service has issued Section 1. 103 -18 of the Income Tax
Regulations (the Regulations) dealing with the issuance of bonds, all or a portion of the
proceeds of which are to be used to reimburse the City for project expenditures made by
the City prior to the time for the issuance of the 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 subsequently
issued borrowing, 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 that the
expenditure be a capital expenditure.
The City desires to comply with requirements of the Regulations with respect to certain
projects hereinafter identified.
2. Official Intent Declaration
a. The City proposes to undertake the following projects described on Exhibit A attached
hereto.
b. Other than (i) expenditures to be paid or reimbursed from sources other than a borrowing
or (ii) expenditures permitted to be reimbursed pursuant to the transition provision of
Section 1.103 - 18(1)(2) of the Regulations or (iii) expenditures constituting of preliminary
expenditures as defined in Section 1.103 -18 (i)(2) of the Regulations, no expenditures for
the foregoing projects as identified on Exhibit A have heretofore been made by the City
and no expenditures will be made by the City until after the date of this Resolution.
The City reasonably expects to reimburse the expenditures made for the costs of the
designated projects out of the proceeds of the debt (the Bonds) to be incurred by the City
after the date of payment of all or a portion of the costs. All reimbursed expenditures
shall be capital expenditures as defined in section 1.150 -1 (h) of the Regulations
d. This declaration is a declaration of official intent adopted pursuant to Section 1. 103 -18
of the Regulations.
Budget Matters As of the date hereof, there are no City funds reserved, allocated on a long term
basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long term basis or
otherwise set aside) to provide permanent financing for the expenditures related to the projects other
than pursuant to the issuance of the Bond. This resolution, therefore, is determined 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.
4. Filing This resolution shall be filed within 30 days of its adoption in the publicly available official
books and records of the City. This resolution shall be available for inspection at the office of the
city clerk at the City Hall (which is the main administrative office of the City) during the normal
business hours of the City on every business day until the date of issuance of the bonds.
5. Reimbursement Allocations 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 for 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 or, in the case of reimbursement of a fund or
account in accordance with Section 1. 103 -18, the fund or account from which the expenditure was
paid, 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 statue,
which would apply to the unspent proceeds of the Bonds.
Adopted this 3` day of January 2012.
ATTEST:
Diane F. Ward, City Clerk
EXHIBIT A
2012 Capital Outlay Purchases $1,350,000