15-04 - 01-06 - Financing Capital Equipment Resolution 15-04 January 6, 2015
Member Schmidgall introduced the following resolution and moved its adoption:
RESOLUTION RELATING TO THE FINANCING OF CAPITAL EQUIPMENT;
ESTABLISHING COMPLIANCE WITH REIMBURSEMENT BOND
REGULATIONS UNDER THE INTERNAL REVENUE CODE
BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota (the
"City"), as follows:
1. Recitals.
(a) The Internal Revenue Service has issued Section 1.150-2 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 date of issuance.
(b) The Regulations generally require that the City make a declaration of its
official intent to reimburse itself for such prior expenditures out of the proceeds of a
subsequently issued series of bonds within 60 days after payment of the expenditures, that
the bonds be issued and the reimbursement allocation be made from the proceeds of such
bonds within the reimbursement period (as defined in the Regulations), and that the
expenditures reimbursed be capital expenditures or costs of issuance of the bonds.
(c) The City desires to comply with requirements of the Regulations with respect
to the projects hereinafter identified.
2. Official Intent Declaration.
(a) The City proposes to acquire certain capital equipment described on Exhibit A
hereto (the "Project"), and to make original expenditures with respect thereto prior to the
issuance of reimbursement bonds, and reasonably expects to issue reimbursement bonds
for the Project, in one or more series, in an amount not to exceed $750,000.
(b) Other than (i) de minimis amounts permitted to be reimbursed pursuant to
Section 1.150-2(f)(1) of the Regulations or (ii) expenditures constituting preliminary
expenditures as defined in Section 1.150-2(f)(2) of the Regulations, the City will not seek
reimbursement for any original expenditures with respect to the foregoing Project paid more
than 60 days prior to the date of adoption of this resolution. All original expenditures for
which reimbursement is sought will be capital expenditures or costs of issuance of the
reimbursement bonds.
3. Budgetary Matters. As of the date hereof, there are no City funds reserved,
pledged, allocated on a long term basis or otherwise set aside (or reasonably expected to
be reserved, pledged, allocated on a long term basis or otherwise set aside) to provide
permanent financing for the original expenditures related to the Project, other than pursuant
to the issuance of the reimbursement bonds. Consequently, it is not expected that the
issuance of the reimbursement bonds will result in the creation of any replacement
proceeds.
Resolution 15-04 - Continued January 6, 2015
4. Reimbursement Allocations. The City's Finance Director shall be responsible
for making the "reimbursement allocations" described in the Regulations, being generally
the transfer of the appropriate amount of proceeds of the reimbursement bonds to
reimburse the source of temporary financing used by the City to make payment of the
original expenditures relating to the Project. Each reimbursement allocation shall be made
within 30 days of the date of issuance of the reimbursement bonds, shall be evidenced by
an entry on the official books and records of the City maintained for the reimbursement
bonds and shall specifically identify the original expenditures being reimbursed.
�LAn,eex
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Shepard M. Harris, M y r
ATTEST:
Kristine A. Luedke, City Clerk
The motion for the adoption of the foregoing resolution was seconded by Member Clausen
and upon a vote being taken thereon, the following voted in favor thereof: Harris, Clausen,
Fonnest, Snope and Schmidgall and the following voted against the same: none,
whereupon said resolution was declared duly passed and adopted, signed by the Mayor
and his signature attested by the City Clerk.