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5. Resolution 5244 - Reimbursement - Wastewater Treatment PlantCity of Kalispell Post Office Box 1997 -- Kalispell, Montana 59903--1997 µ Telephone (406)758-7700 Fax (405)758-7758 REPORT To: Mayor Kennedy and City Council Members FROM: Any Robertson, Finance Director Jaynes H. Patrick, City Manager SUBJECT: Reimbursement Resolution — Wastewater Treatment Plant MEETING HATE: October 1, 2007 BACKGROUND: The City is approved for the financing of the 'wastewater Treatment Plant Construction Project. The City is utilizing the Montana Department of Natural Resources program — Sewer Revolving Fund. This resolution, prepared by Bond Counsel, is necessary under IRS rules in order to reimburse the city for expenses made before the bond proceeds are received. The interest rate on the SRF money is 3.75% fixed. Our investments are averaging 5.4% currently. The bond resolution Will be provided for the October 17"h meeting and bond closing will be mid - November. RECOMMENDATION: Adopt Resolution. Amy H. Robertson Finance Director Report compiled: September 26, 2007 James H. Patrick City Manager RESOLUTION No. 5244 RESOLUTION RELATING To FINANCING OF CERTAIN PROPOSED PROJECTS; ESTABLISHING COMPLIANCE WITH REIMBURSEMENT BOND REGULATIONS UNDER THE INTERNAL REVENUE CODE BE IT RESOLVED by the City Council of the City of Kalispell, Montana (the "City"), as follows: Section 1. Recitals. 1.01 The United States Department of Treasury has promulgated final regulations governing the use of proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City for project expenditures paid by the City prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the "Regulations") require that the City adopt a statement of official intent to reimburse an original expenditure not later than 60 days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds within 18 months (or three years, if the reimbursement bond issue qualifies for the "small issuer" exception from the arbitrage rebate requirement) after the later of (i) the date the expenditure is paid or (11) the date the project is placed in service or abandoned, but (unless the issue qualifies for the "small issuer" exception from the arbitrage rebate requirement) in no event more than three years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 1.02 The City desires to comply with requirements of the Regulations with respect to certain projects hereinafter identified. Section 2. official Intent Declaration. 2.01 The City proposes to undertake certain projects, which projects and the estimated costs thereof are generally described on Exhibit A hereto, which is hereby incorporated herein and made a part hereof (the "Projects"). 2.02 other than (i) expenditures to be paid or reimbursed from sources other than the Bonds (as hereinafter defined), (ii) expenditures permitted to be reimbursed under the transitional provision contained in Section 1.15O-20)(2) of the Regulations, (111) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iv) expenditures in a "de minimus" amount (as defined in Section I.150-2(f)(1) of the Regulations), no expenditures for the Projects have heretofore been paid by the City and no expenditures will be paid by the City until after the date of this Resolution. 2.03 The City reasonably expects to reimburse some or all of the expenditures made for costs of the Projects out of the proceeds of debt in an estimated maximum aggregate principal amount of $14,470,000 (the "Bonds") after the date of payment of all or a portion of the costs of the Projects. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds or other expenditures eligible for reimbursement under Section 1.15Ow2(d)(3) of the Regulations. Section 3. Budaetar*fir Matters. As of the date hereof, there are no City funds reserved, allocated on a long-term basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Projects, other than pursuant to the issuance of the Bonds and to pay costs of the Project in excess of the proceeds of the Bonds. The statement of intent contained in this resolution, therefore, is determined to be consistent with the City's budgetary and financial circumstances as they exist or are reasonably foreseeable on the date hereof. Section 4. Reimbursement Allocations. The City Finance Officer or designee shall be responsible for making the "reimbursement allocations" described in the Regulations, being generally the transfer of the appropriate amount of proceeds of the Bonds to reimburse the source of temporary financing used by the City to make prior payment of the costs of the Projects. Each allocation shall be evidenced by an entry on the official books and records of the City maintained for the .Bonds or the Projects and shall specifically identify the actual original expenditure being reimbursed. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS I ST DAY OF OCTOBER, 2007. ATTEST: Theresa White City Clerk 2 Pamela B. Kennedy Mayor EXHIBIT A Description of Pro'ects Estimated Cost Expansion of the existing Kalispell Advanced $21 ,742,500 Wastewater Treatment Plant to increase the capacity thereof and make related betterments. Major upgrades include the headworks, influent pump station, secondary treatment complex, disinfection, solids treatment and odor control, and adding a new truck storage facility. A-1.