Loading...
1. Resolution 4741 - Reimbursement for Water Bond ProjectsCity of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 REPORT TO: Mayor Kennedy and City Council Members FROM: Amy Robertson, Finance Director Chris Kukulski, City Manager SUBJECT: Reimbursement Resolution - Water bond projects MEETING DATE: September 16, 2002 BACKGROUND: The City is currently preparing the application for the Board of Investments financing for the water projects and other equipment that was approved in the budget. The application will go to the "Board" on October 31' for their approval and we will adopt the bond resolutions in November. This resolution allows the City to proceed with purchasing the meters and hydrants to get started on the projects while the weather is good. Both these projects have been bid and will be installed by City crews. This resolution, prepared by Bond Counsel, is necessary under IRS rules in order to reimburse the city for expenditures made before the bond proceeds are received. RECOMMENDATION: Adopt Resolutions 4741 ALTERNATIVES: Not adopting the resolution will delay purchase of the materials until after the bonds sale. Amy A. Robertson Chris A. Kukulski Finance Director City Manager Report compiled: Sept. 12, 2002 RESOLUTION NO. y2 / 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 (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 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 1.150-20)(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 $485,000 (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. Budsetary 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 he 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 16th day of September, 2002. Mayor Attest: City Clerk EXHIBIT A Description of Projects Estimated Cost Change out residential water meters and installation of $485,000 30 to 35 hydrants A-1