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CITY OF GEM LAKE RESOLUTION NO.2004.07 24 May 2004 RESOLUTION DECLARING THE, OFFICIAL INTENT OF THECITY OF GEM LAKE, MINNESOTA TO REIMBURSE CERTAIN ORIGINAL EXPENDITURES FOR 'GOVERNMENTAL .PURPOSES FROM THE PROCEEDS OF TAX- EXEMPT BONDS TO BE ISSUED.BY THE CITY OF GEM LAKE, MINNESOTA AFTER THE PAYMENT OF SUCH ORIGINAL EXPENDITURES WIIEREAS, Treasury Regulations, Section 1..1.50-2 (the "Reimbursement Regulation"), promulgated pursuant to Section 150 of the Internal Revenue Code of 1986, as. amended (the "Code"), providesthat the allocation of the proceeds of tax-exempt bonds to expenditures for governmental purposes originally paid from a .source other than such tax-exempt bonds will be treated as expenditures of such tax-exempt bonds onlyif certain requirements .of the Reimbursement Regulation.. are satisfied by the issuer of such tax-exempt bonds; and WHEREAS, the City of Gem Lake, Minnesota, a statutory city and a political subdivision of the State of Minnesota (the "City"), expects to incur certain original expenditures for governmental purposesto be financed temporarily from sources other than the proceeds of tax-exempt bonds and which are expectedto be reimbursedfromtheproceeds of one or more series of tax-exempt. bonds; NOW. THEREFORE, BE IT RESOLVED BY THE CITY .COUNCIL OF THE CITY OF GEM LAKE AS FOLLOWS: 1. The City has a reasonable expectation. (within the meaning of Treasury Regulations,Section I.148-1(b)) that it will make expenditures for the projects generally described. in EXHIBIT A attached to this resolution (the "Projects"): The City has a reasonable expectation that it will issue one or more series of tax-exempt bonds (the "Bonds") for each .of'the Projects in the estimated maximum principal amounts set forth in EXHIBIT A and that it will make reimbursement allocations with respect to such original expenditures from. the proceeds of such. Bonds. 2 The City 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 Council at theearliest practicable date and shall be fled with the official books and records of the City as provided in Section 3. 3. This resolution shall be maintained as part of the books and records .of the City at the main. administrative office of the. City, and shallbe continuously available: duringnormal business hours of the City on every business. day of the period .beginniingnot more than thirty days after adoption of this resolution and ending onthe last date of issue of. any Bonds issued to reimburse expenditures described in.EXH1BIT A. 4. This resolution has .been .adopted not later than sixty (60) .days after payment of any original. expenditure to be subject to a reimbursement allocation with respect to the proceeds .of Bonds. 5. All reimbursement allocations with respect to the Bonds will be made notlater than eighteen (18) 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 (3) years after the original expenditure. 6. All original expenditures to which reimbursement allocations are to be made. constitute: (i) capital expenditures; (ii) costs :of issuance of the Bonds; (iii) expenditures for extraordinary, nonrecurring items that are not customarily payable from current revenues, such as casualty losses or extraordinary legal judgments in amounts in excessof reasonable insurance coverage, and for which no reserve is maintained; or (iv). a grant (as defined in Treasury Regulations,. Section 1.148-G(d)(4), as a transfer fora governmental purpose of money or property to a transferee that is not.a related party to or an agent .of the transferor with: respect towhich no obligation or condition is imposed to directly or indirectly repay any amount to the transferor). -1-