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W, CITY OF GEM LAKE RESOLUTION NO.2006-34 14 SEPTEMBER 2006 A RESOLUTION DECLARING THE OFFICIAL INTENT OF GEM LAKE TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE CITY. WHEREAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-2 (the "Reimbursement Regulations") providing that proceeds of tax-exempt bonds used to reimburse prior expenditures will not be deemed spent unless certain requirements are met; and WHEREAS, the City expects to incur certain expenditures that may be financed temporarily from sources other than bonds, and reimbursed from the proceeds of a tax-exempt bond; WHEREAS, the City has determined to make this declaration of official intent ("Declaration") to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement Regulations. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF GEM LAKE AS FOLLOWS: 1. The City proposes to undertake the following projects in the city in 2006 (the "Project"): legal and other professional expenses in connection with threatened annexation of City property. 2. The City reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of bonds in an estimated maximum principal amount of $300,000. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulations. 3. This Declaration has been made 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, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of $100,000 or five (5.0%) percent of the proceeds of an issue; or (0) "preliminary expenditures" up to an amount not in excess of twenty (20%) percent of the aggregate issue price of the issue or issues that finance or are reasonably expected by the City to finance the project for which the preliminary expenditures were incurred. The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. 4. This Declaration 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 original expenditures for the Project and the principal amount of the bonds described in paragraph 2 are consistent with the City's budgetary and financial circumstances. No sources other than proceeds of bonds to be issued by the City are, or are reasonably expected to be, reserved, allocated on a long-term basis, or other%vise set aside pursuant to the City's budget or financial policies to pay such Project expenditures. 5. This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. The foregoing Resolution was offered by Mayor Emeott and was supported by Councilor Bosak and was declared I,...0.,.111 A tha fnllmvino unta- NAME EMEOTT WATSON RASMUSSEN I SCHILLING I BOSAK VOTE Aye Aye Absent Aye Aye Page 6 of 8