RES 2007-03 - 00014268RESOLUTION NO. 2007 -03
RESOLUTION ESTABLISHING PROCEDURES RELATING TO COMPLIANCE
WITH REIMBURSEMENT BOND REGULATIONS UNDER THE INTERNAL
REVENUE CODE
BE IT RESOLVED by the City Council of the City of Fridley, Minnesota, as follows:
RECITALS - 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 bonds used to reimburse the City for any project expenditure
paid by the City prior to the time of issuance of those bonds.
The Regulations generally require that the City (as the issuer of or the primary obligor under the
bonds) 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 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).
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.
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 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:
Each Declaration shall be made not later than 60 days after payment of the applicable project
cost and shall state that the City reasonable 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.
Each Declaration shall 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
Resolution No. 2007 -03
Page 2
which the expenditure relates and state the maximum principal amount of bonding expected to be
issued for that project.
Care shall be taken so that the City, or it authorized representatives under this Resolution, not
make Declarations in cases where the City doesn't reasonably expect that reimbursement bonds
will be issued to finance the subject project costs, and the City officials are hereby authorized to
consult with bon counsel to the City concerning the requirements of the Regulations and their
application in particular circumstances.
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. If the City is acting as the issuer of the
reimbursement bonds, 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 CITY COUNCIL OF THE CITY OF FRIDLEY THIS 8TH
DAY OF JANUARY, 2007.
SCOTT J. LUND — MAYOR
ATTEST:
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DEBRA A. SKOGEN — CI CLERK
Resolution No. 2007 -03 Page 3
EXHIBIT A
Declaration of Official Intent
The undersigned being duly appointed and acting Finance Director of the City of Fridley,
Minnesota ( "the City "), pursuant to and for purposes of compliance with Treasury Regulations,
Section 1.150 -2 (the "Regulations "), under the Internal Revenue Code of 1986, as amended,
hereby states and certifies on behalf of the City as follows:
The undersigned has been and is on the date hereof duly authorized by the City Council of the
City to make and execute this Declaration of Official Intent (the "Declaration ") for and on behalf
of the City.
This Declaration relates to the following project, property or program (the "project ") and the
costs thereof to be financed:
2007 STREET RECONSTRUCTION PROGRAM
The City reasonably expects to reimburse itself for the payment of certain costs of the Project out
of the proceeds of a bond issue or similar borrowing (the "Bonds ") to be issued after the date of
payment of such costs. As of the date hereof, the City reasonably expects that $1,600,000 is the
maximum principal amount of the Bonds which will be issued to finance the Project.
Each expenditure to be reimbursed from the Bonds is or will be a capital expenditure or a cost of
issuance, or any of the other types of expenditures described in Section 1.1502(d)(3) of the
Regulations.
AS of the date hereof, the statements and expectations contained in the Declaration are believed
to be reasonable and accurate.
Date: January 8 _ 2007
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Richard D. Pribyl — Fin ce Director
City of Fridley