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HomeMy WebLinkAbout97-019 e e e CITY OF ARDEN IllLLS RAMSEY COUNTY STATE OF MINNESOTA RESOLUTION NO. 97-19 A RESOLUTION ESTABLISIllNG PROCEDURES RELATING TO COMPLIANCE WITH REIMBURSEMENT BOND REGULATIONS UNDER THE INTERNAL REVENUE CODE WHEREAS, the Arden Hills City Council created Development District No.1 and Tax Increment Financing District No.1 and No.2 on June 26, 1989; and WHEREAS, the development program adopted with these Districts allows for the use of tax increment financing consistent with Minnesota Statutes, Section 469; and WHEREAS, the City Council is considering the issuance of General Obligation Tax Increment Financing Bonds to achieve the development program objectives; and WHEREAS, the City Council desires to use bond proceeds to reimburse itself for any project expenditures paid by the City prior to the time of issuance ofthose bonds. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ARDEN IllLLS, MINNESOTA: 1. Recitals. A. The Internal Revenue Service has issued final Treasury Regulations, Section 1.103-18 (the "Regulations") dealing with reimbursement bond proceeds, which would include those proceeds of the City's bonds to be used to reimburse the City for any project expenditure paid by the City prior to the time of the issuance of those bonds. B. The Regulations generally require that the City make a prior declaration of its official intent to reimburse itself for such prior expenditures out of the proceeds of subsequent borrowings, that such declaration generally be made on or before the date the expenditure is actually paid, that the bonding occur and the reimbursement allocation be made from the proceeds of such bonds within one (1) year of the payment of the expenditure (or not later than one year after the project is placed in service, ifthat is a longer period), and that the expenditure be a capital expenditure. {2L. kf;:.\( 'f('(,. 4" \~ ~ ,'\'~'~: !~~ i~Q,.v'> I..i, . \ L. ~ -'1 ..'. . __c_,,"" I I I Resolution No. 97 - 19 April 14, 1997 Page Two C. The City's Bond Counsel has advised the City that the Regulations do not apply, and hence the provisions ofthis 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. 2. Official Intent Declaration. The Regulations, in the situations in which they apply, require the City to have made an official declaration of its reasonable intention (hereinafter referred to as the "Official Intent Declaration" or the "Declaration") to reimburse itself for previously paid project expenditures out of the proceeds of subsequent bonds or other borrowings. The Council hereby authorizes the City Administrator to make the City's Official Intent 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: A. Each Declaration shall be made on or before the date the City pays the applicable project cost and shall state that the City reasonably intends and expects to reimburse itself for the expenditure with proceeds of a borrowing. Each Declaration may be made substantially in the form of the "Declaration of Official Intent" which is attached to and made a part of this Resolution. B. Each Declaration shall specifically contain the following statement: "This Declaration is a declaration of official intent under Treasury Regulations, Section 1.103-18." C. Each Declaration shall and is hereby declared to be made and filed in the publicly available official books, records, or proceedings of the City, which shall be reasonably available for public inspection at City Hall during normal business hours ofthe City on every business day during the period beginning on the earlier of ten (10) days after the making of the Declaration or the date of issuance of the reimbursement bonds and ending on the day after the issuance of such bonds. D. Each Declaration shall, at a minimum, contain a general functional description ofthe property, project, or program for which the expenditure to be reimbursed is paid (for example, "1992 Street Improvement Project" or other specific, identifiable project of the City) or, in the alternative, I I I Resolution No. 97 - 19 April 14, 1997 Page Three shall identify the particular fund or account of the City from which the expenditure to be reimbursed is paid, including a description of the general functional purpose of that fund or account (for example, "park and recreation fund - recreational facility capital improvement program"). E. Each Declaration shall also contain a statement ofthe maximum principal amount of debt expected to be issued for the subject project. F. Care shall be taken so that the City, or its authorized representatives under this Resolution, not make declarations in cases where the City does not reasonably expect that it will ultimately issue reimbursement bonds to provide long-term financing for the subject project costs, and the City officials are hereby authorized to consult with Bond Counsel to the City concerning the requirements of the Regulations in general and their application in particular circumstances. It is the Council's intention that Declarations not be made (i) when available funds ofthe City have been or are reasonably expected to be dedicated or otherwise reserved to fund on a long-term basis the particular expenditures involved, or (ii) when it is not reasonably expected that reimbursement bonding will occur. G. 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 Official Intent Declarations, including recommendations on the timing of the issuance of such bonds so that the "reimbursement allocation" described in the Regulations and in Paragraph 3 below can be made within the one (1) year time limits prescribed in the Regulations. H. This Resolution shall supplement and amend all prior determinations and policies adopted by the City in regard to complying with the Regulations, as initially proposed, and in the event of any inconsistency between the terms provided in this Resolution and said prior determinations or policies, the provisions of this Resolution shall govern. 3. Reimbursement Allocations. The designated City officials shall also be responsible for making the "reimbursement allocations" described in the Regulations, being generally the transfer of the appropriate amount of reimbursement bond proceeds to reimburse the source of temporary financing used by the City to make payment of the prior expenditure. Each allocation shall be evidenced by an entry on the official books or records of the City maintained for such reimbursement bonds; shall specifically identify the actual prior expenditure being reimbursed or, in the case of the I I I Resolution No. 97 - 19 April 14, 1997 Page Four reimbursement of a particular fund or account, the fund or account from which the expenditure was paid; and shall be effective to relieve the bond proceeds involved from any restriction under the bond resolution or other relevant legal documents for those bonds and under any applicable state statute applicable to unspent proceeds of such bond issue. PASSED AND ADOPTED BY THE CITY COUNCIL OF TH ITY OF ARDEN HILLS THIS 14TH DAY OF APRIL, 1997. ATTEST: /~ ../ / // / ,/ / f /..)::>'~/~;"/ ~:..l.:-;:~' ~- / c/~ 1;rc / BRIAN FRITSINGER, CITY ADMINISTRATOR . . . CERTIFICATION The undersigned, being the duly qualified and acting City Administrator of the City of Arden Hills, Minnesota, hereby certifies the following: The foregoing is a true and correct copy of a Resolution on file and of official, publicly available record in the offices of the City, which Resolution relates to procedures of the City for compliance with certain IRS Regulations on reimbursement bonds. Said Resolution was duly adopted by the governing body of the City (the "Council") at a regular meeting of the Council held on April 14, 1997. Said meeting was duly called, regularly held, open to the public, and held at the place at which meetings of the Council are regularly held. Councilmember Hicks moved the adoption of the Resolution, which motion was seconded by Councilmember ADlikowski . A vote being taken on the motion, the following members of the Council voted in favor of the motion to adopt the Resolution: Malone, Hicks, Keim, Aplikowski and Probst and the following voted against the same: N/A Whereupon said Resolution was declared duly passed and adopted. The Resolution is in full force and effect and no action has been taken by the Council which would in any way alter or amend the Resolution. WITNESS MY HAND officially as the City Administrator of the City of Arden Hills, Minnesota, this 14th day of April, 1997. ~~ BRIAN FRITS GE, CITY ADMINISTRATOR City of Arden Hills, Minnesota . , , DECLARATION OF OFFICIAL INTENT The undersigned, being the duly appointed and acting City Administrator of the City of Arden Hills, Minnesota (the "City"), pursuant to and for purposes of compliance with Treasury Regulations, Section 1.103-18 (the "Regulations") under the Internal Revenue Code of 1986, as amended, hereby states and certifies as follows: 1. The undersigned has been, and is on the date hereof, duly authorized by the governing body of the City, the City Council, to make and execute this Declaration of Official Intent (the "Declaration") for and on behalf of the City. This Declaration is a declaration of official intent under Treasury Regulations, Section 1.103-18. 2. The property, project, or program to which this Declaration relates is generally and functionally described as follows: The redevelopment of the Gateway Business District and associated public improvements. 3. The specific fund or account of the City from which expenditure to be reimbursed will be paid, and the general functional purpose of that fund or account, are as follows: The Arden HiIIs General Fund 101, DevelopmentlRedevelopment Fund 522, and Permanent Improvement Revolving Loan Fund 501 may be used to finance all land acquisition, engineering, legal, architectural, financial and bond consultant costs associated with the project identified in Item 2 above. 4. The maximum principal amount of the debt expected to be issued by the City for the purpose of reimbursing and expenditures to which this Declaration relates (the "Expenditures") is on the date hereof reasonably estimated to be $4,100,000. Each of the Expenditures is (or would be with a proper election) a capital expenditure under the federal tax law principles, as described in the Regulations. 5. The City intends and reasonably expects to reimburse itself for the payment ofthe Expenditures out ofthe proceeds of a borrowing (the "Bonds") to be made by the City after the date of payment ofthe Expenditures. 6. As of the date hereof, there are no sources of City funds which have been or are reasonably expected to be allocated or available on a long-term basis, reserved, or otherwise set aside to provide permanent financing for the Expenditures, other than pursuant to the subsequent issuance of the Bonds. On the basis on the foregoing, the statements and certifications contained in this Declaration are believed to be reasonable and accurate, and this Declaration is believed to be e , , Declaration of Official Intent April 14, 1997 Page Two consistent with the City's budgetary and financial circumstances as they exist or are reasonably foreseeable on the date hereof, all within the meaning and content of the Regulations. 7. This Declaration is and shall remain a part of the publicly available official books, records, or proceedings of the City and shall be continuously available for inspection by the general public at City Hall during regular City hours for a period ending not earlier than the day after the issuance of the Bonds. IN WITNESS WHEREOF, the undersigned has executed this Declaration and placed it on file in the official City records this 14th day of April, 1997. ,/. //,/ /~-; ..:::: /./ ,/./ ../ BRIANi'RI ING R, CITY ADMINISTRATOR City of Arden Hills, Minnesota