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91-082 . , . . . .. RESOLUTION NO. 82-91 A RESOLUTION DECLARING THE OFFICIAL INTENT TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF TAXABLE OR TAX-EXEMPT BONDS TO BE ISSUED BY THE CITY OF SHOREWOOD WHEREAS, the City followed the procedures set forth in Minnesota Statutes, Chapter 429, and has ordered the construction of the following three improvement projects: a. Water Treatment Plant for Southeast Area Trunk Water System; b. Pine Bend Watermain Improvement; and c. Church Road Improvements; and WHEREAS, in following the statutory procedures the City has advanced funds for engineering, legal, and administrative costs and has incurred costs for legal publications and mailing and has awarded a contract for construction work, and WHEREAS, the monies advanced to these projects will be reimbursed to the City fund accounts which paid these amounts from a bond issue which will be sold in October, 1991, and delivered in November, 1991, and WHEREAS, the Internal Revenue Service has issued proposed regulations (FI-59-89) published in the Federal Register on Apr il 25, 1991, NOW, THEREFORE, BE IT RESOLVED By the City Council of the City of Shorewood, Minnesota, as follows: 1. The Internal Revenue Service has issued proposed new Treas. Reg. Sec. 1.103-17 (the "Reimbursement Rules") providing that proceeds of tax-exempt bonds used to reimburse pr ior expenditures will not be deemed spent unless certain requirements are met. 2. The City has incurred certain expenditures since September 8, 1989, and expects to incur certain additional expenditures, all of which may be financed temporarily from sources other than taxable or tax-exempt bonds, and reimbursed from the proceeds of a taxable or tax- exempt bond. 3. The new reimbursement rules will applyt.() bonds issued after SepEember--1~. 1991. 4. The Reimbursement Rules require that the allocation of proceeds of the bonds to be issued to reimburse any expenditures will be made not later than the later of one year after the expenditure was paid or one year after the property was placed in service. . , . . . 5. The expenditures to be reimbursed must have a reasonably expected economic life of at least one year, in that they are, or are to be incorporated in and become a part of, a facili ty, are properly chargeable to or may be capi talized as part of the basis of the facility, and if the Ci ty were subject to federal income taxation, would be depreciable over the facility's economic life. 6. Expenditures made between September 8, 1989, and September 7, 1991, may be reimbursed as descr ibed in Section 2 herein only if there is objective evidence that, at the time the expendi tures were paid, the City reasonably expected to reimburse such expendi tures with proceeds of a taxable or tax-exempt borrowing. 7. If any future expenditure to be reimbursed is not made within two years of the date of this Resolution, this Resolution may be updated to the extent such expenditure is still expected to be reimbursed with bond proceeds of a later date. 8. Proceeds of the bonds issued to reimburse the expendi tures described in Exhibit A will be deemed spent only when (a) an allocation entry is made on the books or records of the City with respect to the bonds; (b) the entry specifically identifies an actual expenditure to be reimbursed; and (c) the allocation is effective to relieve the bond proceeds from restrictions on unspent proceeds under applicable documents and state laws. 9. None of the proceeds of the bonds issued to reimburse the City for expenditures will be used (a) to refund another tax-exempt governmental issue or (b) to create or increase the balance in a sinking fund or replace funds used for such purpose, or (c) to create or increase the balance in a reserve or replacement fund or replace funds used for such purposes, or (d) to reimburse an expenditure originally paid with the proceeds of another tax-exempt bond obligation; unless (i) such amounts are deposited in a bona fide debt service fund, or (ii) the original tax-exempt issue was not reasonably expected to be used to finance the expenditure. 10. The City reasonably expects to expend moneys after the date hereof from the sources described in Exhibit A on a temporary basis to pay the expenditures descr ibed in Exhibit A. The Ci ty reasonably expects to reimburse itself for such expenditures from the proceeds of taxable or tax-exempt bonds, the debt service for which is expected to be paid from the sources described in Exhibit A. 11. The Ci ty also expended certain moneys between September 8, 1989, and the date hereof from the sources descr ibed in Exhibit A. At the time of those expenditures, the City reasonably expected to reimburse the expenditures from the proceeds of taxable or tax-exempt bonds, the debt service for which is expected to be paid from the sources described in Exhibit A. Objective evidence of the City's reasonable expectations regarding such reimbursement is summarized in Exhibit B. 12. The City Administrator-Clerk is authorized to designate appropriate additions to Exhibit A in circumstances where time is of the essence, and any such designation shall be reported to the Ci ty Council at ,. . . . the earliest practicable date and shall be filed with the official book and records of the City at the times and in the manner provided in Section 13. 13. This resolution shall be maintained as part of the books and records of the City at City Hall, and shall be continuously available dur ing normal business hours of the City on every business day of the per iod beginning not more than 10 days after adoption of this resolution and ending on, and including, the date of issue of the reimbursement bonds. 14. This Resolution 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 reimbursements set forth at Exhibit A are consistent with the City's budgetary and financial circumstances. No sources other than those described at Exhibit A are expected to be allocated to such expenditures on a long term basis pursuant to the City's budget. The City has not made any allocation, budget, or restriction of moneys or adopted any requirement or policy to reimburse a fund, the pr imary purpose of which is to prevent moneys from being deemed to be available to pay an expenditure the City intends to reimburse with proceeds of a borrowing. 15. This Resolution is intended to constitute official intent for purposes of proposed Tres. Reg. Sec. 1.103-17 and any successor law, regulation or ruling. This Resolution shall be modified to the extent required or permi tted by Tres. Reg. Sec. 1.103-17 as finally adopted, or any successor law, regulation or ruling. Approved by the City Council of the City of Shorewood this 26th day of August, 1991. Attest: MI~ r /WrJ Administrator-Clerk