2008-61
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
DA TE:
October 27. 2008
RESOLUTION NO:
2008-61
MOTION BY:
Ernst
SECONDED BY:
Litsev
RESOLUTION ESTABLISHING PROCEDURES
RELA TING TO COMPLIANCE WITH REIMBURSEMENT BOND
REGULATIONS UNDER THE INTERNAL REVENUE CODE
NEW PUBLIC WORKS FACILITY
BE IT RESOLVED by the City Council (the "Council") of the City of Chanhassen, Minnesota
(the "City"), as follows:
Recitals.
(1) The Internal Revenue Service has issued Treasury Regulations, Section 1.150-2
(as the same may be amended or supplemented, the "Regulations"), dealing with
"reimbursement bond" proceeds, being proceeds of the City's bonds used to reimburse the
City for any project expenditure paid by the City prior to the time of the issuance of those
bonds.
(1) The Regulations generally require that the City make a declaration of intent to
reimburse itself for such prior expenditures out of the proceeds of subsequently issued
bonds, that such declaration be made not later than 60 days after the expenditure is
actually paid, and that the bonding occur and the written reimbursement allocation be
made from the proceeds of such bonds within 18 months after the later of (1) the date of
payment of the expenditure or (2) the date the project is placed in service (but in no event
more than 3 years after actual payment).
(1) The City heretofore implemented procedures for compliance with the predecessor
versions of the Regulations and desires to amend and supplement those procedures to
ensure compliance with the Regulations.
(1) 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.
Official Intent Declaration. The Regulations, in the situations in which they apply,
require the City to have declared an official intent (the "Declaration") to reimburse itself for
previously paid project expenditures out of the proceeds of subsequently issued bonds. The
Council hereby authorizes 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 not later than 60 days after payment of the
applicable project cost and shall state that the City reasonably expects to reimburse itself
for the expenditure out of the proceeds of a bond issue or similar borrowing. Each
Declaration may be made substantially in the form of the Exhibit A which is attached to
and made a part of this Resolution, or in any other format which may at the time comply
with the Regulations.
(1) Each Declaration shall (1) contain a reasonably accurate description of the
"project," as defined in the Regulations (which may include the property or program to be
financed, as applicable), to which the expenditure relates and (2) state the maximum
principal amount of bonding expected to be issued for that project.
(1) 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 to
issue reimbursement bonds to finance 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 and their application in particular circumstances.
(1) 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 Declarations.
Reimbursement Allocations. The designated City officials shall also be responsible for
making the "reimbursement allocations" described in the Regulations, being generally written
allocations that evidence the City's use of the applicable bond proceeds to reimburse the original
expenditures.
Effect. This Resolution shall amend and supplement all prior resolutions and/or
procedures adopted by the City for compliance with the Regulations (or their predecessor
versions), and, henceforth, in the event of any inconsistency, the provisions of this Resolution
shall apply and govern.
Passed and adopted by the Chanhassen City Council this 27th day of October, 2008.
A ITEST:
'LA+:
Gerhardt, City Manager
Thomas A. Furlong, Mayor
YES
Furlong
Ernst
Litsey
McDonald
Tjornhom
NO
ABSENT