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15. Resolution 4961 - Reimbursement Resolution - Fire Station 62C-11ity of Kalispell Post Office Box i 97 - Kalispell, Monuina 5990 -1997 - e e hOn (40 )758-7700 Fy_x (= )758-77 REPORT TO: Mayor Kennedy and City Council Members FROM: Any Robertson, Finance Director Janes H. Patrick, City Manager SUBJECT: Fire Hall Reimbursement Resolution MEETING DATE: December 6, 2004 BACKGROUND: The City will be selling General Obligation Bonds (G. O. Bonds) in the spring; after the bids for the new Fire Hall are received. In order to cover the expenses prior to sale of the bonds we need to adopt a reimbursement resolution. We have adapted reimbursement resolutions in the past as it is common practice to include the preliminary costs associated with a project in the financing. The resolution was prepared by our bond counsel. RECOMMENDATION: Adopt Reimbursement Resolution. ALTERNATIVES: At Council's discretion. Amy H. Robertson Finance Director Report compiled: November 23, 2004 .lames H. Patrick City Manager RESOLUTION NO.4961 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 frog, 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 (ii) 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 pen -nit 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 (1) expenditures to be paid or reimbursed from sources other than the Bonds (as hereinafter defined), (ii) expenditures penrtitted to be reimbursed under the transitional provision contained in Section 1.150-20)(2) of the Regulations, (iii) 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 1.150-2(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 $3,000,000 (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 1.150-2(d)(3) of the Regulations. Section 3. Budgetary 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. 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 Director 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. Adopted this 6th day of December, 2004. ATTEST: Theresa White City Clerk Pamela B. Kennedy Mayor N EXHIBIT A Description of Projects Estimated Cost North Fire Hall No.62 $3,000,000 November 2, 2004 voters approved a $3,000,000 G. O. bond to construct the City' first satellite fire station on the north end of town. Design is currently under way and this resolution will allow for reimbursement of costs from the bond proceeds. Bonds will be issued after the bids are accepted in the Spring of 2005. A-1