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HomeMy WebLinkAboutRESOLUTION NO. 2016-42 Fairfax419915-23/RRR FEDERAL REIMBURSEMENT RESOLUTION 419915-23 Fairfax, Iowa May 17, 2016 The City Council of the City of Fairfax, Iowa, met on May 17, 2016, at 6:00 o'clock p.m., at 525 Vanderbilt Street in Fairfax, Iowa. The meeting was called to order by the Mayor, and the roll was called showing the following Council Members present and absent: Present: JoAnn Beer, Mike Daly, Nick Volk, and Marianne Wainwright Absent: Joe Kell. It was reported that, in order to preserve the City's potential eligibility to issue tax exempt bonds in order to finance proposed sanitary sewer and waterworks improvements, it would be necessary for the Council to adopt a resolution declaring the Council's intent to spend cash and later reimburse those expenses from the proceeds of a bond issue. Council Member Wainwright introduced the resolution next hereinafter set out, related to financing a projects, and moved its adoption, seconded by Council Member Daly. After due consideration and discussion,the Mayor put the question upon the adoption of said resolution, and the roll being called, the following Council Members voted: Ayes: Beer, Daly, Volk, and Wainwright Nays: None. Whereupon, the Mayor declared the resolution duly adopted as hereinafter set out. At the conclusion of the meeting, and upon motion and vote, the Council adjourned. �. Burnell G. Frieden, Mayor Attest: Cyt la K. Stimson, City Clerk/Treasurer -1- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Fairfax419915-23/RRR RESOLUTION NO. 2016-42 RESOLUTION RELATING TO FINANCING OF PROJECTS TO BE UNDERTAKEN BY THE CITY OF FAIRFAX, IOWA; ESTABLISHING COMPLIANCE WITH REIMBURSEMENT BOND REGULATIONS UNDER THE INTERNAL REVENUE CODE BE IT RESOLVED by the City Council (the "Council") of the City of Fairfax, Iowa (the "City"), as follows: Section 1. Recitals. (a) The Internal Revenue Service has issued Section 1.150-2 of the Income Tax Regulations(the"Regulations")dealing with the issuance of bonds,all or a portion of the proceeds of which are to be used to reimburse the City for project expenditures made by the City prior to the date of issuance. (b) The Regulations generally require that the City make a prior declaration of its official intent to reimburse itself for such prior expenditures out of the proceeds of a subsequently issued borrowing and that the borrowing occur and the reimbursement allocation be made from the proceeds of such borrowing within a certain period after the payment of the expenditure or the date the projects are placed in service; and (c) The City desires to comply with requirements of the Regulations with respect to projects hereinafter identified. Section 2. Official Intent Declaration. (a) The City proposes to undertake the following projects and to make original expenditures with respect thereto prior to the issuance of bonds, notes or other obligations (the "Bonds") and reasonably expects to issue the Bonds for such projects in the maximum principal amount shown below: Maximum Amount of Bonds Projects Expected to be Issued for Projects Sanitary sewer and waterworks improvements $1,665,000 (b) Other than (i) expenditures to be paid or reimbursed from sources other than the Bonds or (ii) expenditures made not earlier than sixty days prior to the date of this Resolution or(iii) expenditures amounting to the lesser of$100,000 or 5% of the proceeds of the Bonds or (iv) expenditures constituting preliminary expenditures as defined in Section 1.150-2(f)(2) of the Regulations, no expenditures for the projects have heretofore been made by the City for which the City will seek reimbursement from the proceeds of the Bonds. -2- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA Fairfax419915-23/RRR (c) This declaration is a declaration of official intent adopted pursuant to Section 1.150-2 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. 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, all within the meaning and content of the Regulations. Section 4. Reimbursement Allocations. The City's financial officer 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 payment of the prior 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, shall specifically identify the actual prior expenditure being reimbursed or, in the case of reimbursement of a fund or account, the fund or account from which the expenditure was paid, and shall be effective to relieve the proceeds of the Bonds from any restriction under the bond resolution or other relevant legal documents for the Bonds, and under any applicable state statute,which would apply to the unspent proceeds of the Bonds. Section 5. Repealer. All resolutions, parts of resolutions, or actions of the Council in conflict herewith are hereby repealed, to the extent of such conflict. Passed and approved May 17, 2016. Burnell G. Frieden, Mayor Attest: Cyn is K. Stimson, City Clerk/Treasurer fie• •, 3 Y -3- DORSEY&WHITNEY LLP,ATTORNEYS,DES MOINES,IOWA May 12, 2016 Cynthia Stimson City Clerk/City Hall PO Box 337 Fairfax, Iowa 52228-0337 Re: Reimbursement Regulation Resolution/Sewer and Water improvements Our file: 419915-23 Dear Cynthia: I have prepared the enclosed resolution which may be adopted by your City Council on May 17 in order to comply with federal regulations and to preserve the City's eligibility to be reimbursed from future tax exempt bond proceeds for cash spent on the proposed water and sewer improvement projects. Please return one executed copy of the resolution to us for our files. Very truly yours, Robert E. Josten Enclosure cc by email: Maggie Burger