05-032CITY OF SHOREWOOD
• RESOLUTION NO.05- 032
DECLARING THE OFFICIAL INTENT OF THE
CITY OF SHOREWOOD TO RMI[BURSE
CERTAIN EXPENDITURES FROM THE PROCEEDS
OF TAX EXEMPT BONDS TO BE ISSUED BY THE CITY
WHEREAS, the Internal Revenue Service has issued Treasury Regulations, Section
1.150-2 (the "Regulation"), that establishes the requirements under which an allocation of a
portion of the proceeds of tax-exempt bonds (as defined in Section 150 of the Internal Revenue
Code of 1986, as amended) to an expenditure that is originally paid from a source other than
such tax-exempt bonds will be treated as an expenditure of the proceeds of such tax-exempt
bonds on the date of such allocation; and
WHEREAS, the Regulation requires that (i) not later than sixty (60) days after payment
of the original expenditure, the issuer of the tax-exempt bonds must adopt an official intent for
the original expenditure (in any reasonable form, including issuer resolution or action by an
appropriate representative of the issuer or the conduit borrower), (ii) the official intent generally
describes the project for which the original expenditure is paid and states the maximum principal
amount of obligations expected to be issued for the project, and (iii) on the date of the
• declaration of official intent, the issuer must have a reasonable expectation that it will reimburse
the original expenditure with proceeds of the tax-exempt bonds; and
WHEREAS, the original expenditure must be a capital expenditure or a cost of issuance
for the tax-exempt bonds, and the reimbursement allocation (except with respect to costs of
issuance, amounts not in excess of the lesser of $100,000 or five percent of the proceeds of the
tax-exempt bonds, and preliminary expenditures (as defined in the Regulation) not in excess of
twenty percent of the aggregate issue price of the tax-exempt bonds) must be made not later than
eighteen months after the later of (i) the date the original expenditure is paid, or (ii) the date the
project is placed in service or abandoned, but in no event more than three years after the original
expenditure is paid or three years after the date the original expenditure is paid if the City
qualifies as a "small issuer" pursuant to Section 148(f)(4)(D)(i) of the Internal Revenue Code of
1986, as amended; and
WHEREAS, the City of Shorewood (the "City") proposes to purchase certain land
adjacent to the current City Hall (the "Project") in anticipation of making improvements to the
existing City Hall or constructing a new City Hall on the acquired land pursuant to a capital
improvement plan proposed to be approved by the City Council later this year (the "Capital
Improvement Plan"); and
WHEREAS, the City expects to incur certain expenditures with respect to the Project and
such expenditures may be financed temporarily from sources other than tax-exempt bonds; and
•
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• WHEREAS, the City expects to reimburse the expenditures with respect to the Project
from a portion of the proceeds of tax-exempt bonds issued pursuant to the Capital Improvement
Plan and Minnesota Statutes, Section 475.521 in the principal amount not to exceed $3,600,000;
and
WHEREAS, the City has determined to make this declaration of official intent
("Declaration") to reimburse certain costs from proceeds of tax-exempt bonds in accordance with
the Regulation.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SHOREWOOD AS FOLLOWS:
The City reasonably intends to make expenditures for the Project.
2. The City reasonably expects to reimburse the expenditures made for certain costs of
the Project from a portion of the proceeds of tax exempt bonds to be issued in an estimated
maximum principal amount of $3,600,000. All reimbursed expenditures will be capital
expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under
Section 1.150-2(d)(3) of the Regulation.
3. This Declaration has been made not later than 60 days after payment of any
• original expenditure to be subject to a reimbursement allocation with respect to the proceeds of
bonds, except for the following expenditures: (i) costs of issuance of bonds; (ii) costs in an amount
not 1n excess of $100,000 or 5 percent of the proceeds of an issue; or (iii) preliminary expenditures
(as defined in the Regulation) up to an amount not in excess of 20 percent of the aggregate issue
price of the issue or issues that finance or are reasonably expected by the City to finance the project
for which the preliminary expenditures were incurred.
E
4. This Declaration is an expression of the reasonable expectations of the City based
on the facts and circumstances known to the City as of the date hereof. The anticipated original
expenditures for the Project and the principal amount of the tax exempt bonds described in
paragraph 2 above are consistent with the City's budgetary and financial circumstances. No
sources other than proceeds of tax-exempt bonds to be issued by the City are, or are reasonably
expected to be, reserved, allocated on a long-term basis, or otherwise set aside pursuant to the
City's budget or financial policies to pay such Project expenditures.
5. This Declaration is intended to constitute a declaration of official intent for
purposes of the Reimbursement Regulations.
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ADOPTED BY THE CITY COUNCIL OF THE CITY OF SHOREWOOD this 1Ith
• day of April, 2005.
•
ATTEST:
Craig �)Dawson, City Administrator/Clerk
Woody Love, Mayor
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