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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: "aAjAt? 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 �2La n-piew - Richard D. Pribyl — Fin ce Director City of Fridley