Res 32-07\.
RESOLUTION N0.32-07
DECLARATION OF OFFICIAL INTENT WITH
RESPECT TO REIMBURSEMENT OF TEMPORARY
ADVANCES MADE FOR CAPITAL EXPENDITURES TO
BE MADE FROM SUBSEQUENT BORROWINGS
WHEREAS, Treasury Regulation ~ 1.150-2 (the "Reimbursement Regulations"), issued
pursuant to Section 150 of the Internal Revenue Code of 1986, as amended, (the "Code") prescribes
certain requirements by which proceeds of tax-exempt bonds, notes, certificates or other obligations
included in the meaning of "bonds" under Section 150 of the Code ("Obligations") used to
reimburse advances made for Capital Expenditures (as hereinafter defined) paid before the issuance
of such Obligations may be deemed "spent" fox purposes of Sections 103 and 141 to 150 of the
Code and therefore, not further subject to any other requirements or restrictions under those
sections of the Code; and
WHEREAS, such Reimbursement Regulations require that an Issuer (as hereinafter
defined) make a Declaration of Official Intent (as hereinafter defined) to reimburse any Capital
Expenditure paid prior to the issuance of the Obligations intended to fund such Capital Expenditure
and require that such Declaration of Official Intent be made no later than sixty (60) days after
payment of the Capital Expenditure and further require that any Reimbursement Allocation (as
hereinafter defined) of the proceeds of such Obligations to reimburse such Capital Expenditures
occur no later than eighteen (18) months after the latex of the date the Capital Expenditure was paid
or the date the property acquired with the Capital Expenditure was placed in service, except that any
such Reimbursement Allocation must be made no later than three years after such Capital
Expenditure was paid; and
WHEREAS, the CITY OF DELRAY BEACH (the "Issuer") wishes to ensure
compliance with the Reimbursement Regulations;
NOW, THEREFORE, be it resolved by the Commission of the Issuer that:
Section 1. Definitions. The following definitions apply to the terms used herein:
"Allocation" means written evidence that proceeds of Obligations issued subsequent to the
payment of a Capital Expenditure are to reimburse the Issuer for such payments. "To allocate"
means to make such an allocation.
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"Capital Expenditure" means any expense for an item that is properly depreciable or
amortizable or is otherwise treated as a capital expenditure for purposes of the Code, as well as any
costs of issuing Reimbursement Bonds.
"Declaration of Official Intent" means a written declaration that the Issuer intends to fund
Capital Expenditures with an issue of Reimbursement Bonds and reasonably expects to be
reimbursed from the proceeds of such an issue. .
"Issuer" means either a governmental unit that is reasonably expected to issue Obligations,
or any governmental entity or 501 (c) (3) organization that is reasonably expected to borrow funds
from the actual issuer of the Obligations.
"Reimbursement" means the restoration to the Issuer of money temporarily advanced from
other funds, including moneys borrowed from other sources, of the Issuer to pay fox Capital
Expenditures before the issuance of Obligations intended to fund such Capital Expenditures. "To
reimburse" means to make such a restoration.
"Reimbursement Bonds" means Obligations that are issued to reimburse the Issuer for
Capital Expenditures, and for certain other expenses permitted by the Reimbursement Regulations,
previously paid by or for the Issuer.
"Reimbursement Regulations" means Treasury Regulation ~ 150-2 and any amendments
thereto or superseding regulations, whether in proposed, temporary or final form, as applicable,
prescribing conditions under which the proceeds of Obligations may be allocated to reimburse the
Issuer for Capital Expenditures and certain other expenses paid prior to the issuance of the
Obligations such that the proceeds of such Obligations will be treated as "spent" fox purposes of
Sections 103 and 141 to 150 of the Code.
Section 2. Declaration of Official Intent.
(a) The Issuer declares that it reasonably expects that the Capital Expenditures described
in Section (b), which were paid no earlier than sixty (60) days prior to the date hereof, or which will
be paid prior to the issuance of any Obligations intended to fund such Capital Expenditures, will be
reimbursed with the proceeds of Obligations, representing a borrowing by the Issuer in the
approximate principal amount, for such Reimbursements, of $3,000,000; and
(b) The Capital Expenditures to be reimbursed are to be used for the construction of
various parks, the Old School Square Garage, and in part, a new Environmental Services Building.
Section 3. Reasonable Expectations. The Issuer does not expect any other funds
(including the money advanced to make the Capital Expenditures that are to be reimbursed), to be
2 RES. NO. 32-07
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reserved, allocated on a long-term basis, or otherwise set aside by the Issuer or any other entity, with
respect to the Capital Expenditures for the purposes described in Section 2(b).
Section 4. Open Meeting. It is found and determined that all formal actions of this
Commission of the Issuer concerning and relating to the adoption of this resolution were adopted in
an open meeting of this Commission of the Issuer; and that all deliberations of this Commission of
the Issuer and of any of its committees that resulted in such formal action, were in meetings open to
the public, in compliance with the law.
The undersigned has been authorized by Commission of the Issuer to sign this resolution on
behalf of the Commission of the Issuer.
Passed and adopted in regular session on this 1st day , 2007.
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MAYOR
ATTEST:
City Clerk
3 RES. NO.32-07
MEMORANDUM
TO: MAYOR AND CITY COMMISSIONERS
FROM: Rebecca S. O'Conner, Treasurer
THROUGH: CITY MANAGER~~
DATE: Apri127, 2007
SUBJECT: AGENDA ITEM # . r -REGULAR MEETING OF MAY 1, 2007
REIMBURSEMENT RESOLUTION
ITEM BEFORE COMMISSION
Reimbursement Resolution #32-07
BACKGROUND
Resolution #32-07 declares the official intent of the City Commission to reimburse, from
subsequent borrowing, certain temporary advances of funds made for capital expenditures. The
City will be reimbursing expenses relative to various parks, the Old School Square Parking Garage,
the Environmental Services building and the Intracoastal Park (Mangrove Park) from a proposed
Utility Tax Bond Issue. We are required by the Internal Revenue Service to issue a Declaration of
Intent if expenses are incurred for capital projects prior to receiving funding from a bond issue. Tax
law requires that a declaration be made within 60 days of the first expense relative to project
construction or asset acquisition. This declaration falls within the 60 day period and, therefore,
provides for compliance.
Our options are: (1) short term borrowing from a bank, (2) delaying the start of some projects until
the utility tax bonds are sold, or (3) borrowing these funds internally and repaying the source when
the bonds are sold. The Finance Department recommends approval of this resolution to implement
option (3).
FUNDING SOURCE
N/A
RECOMMENDATION
Recommend Commission approval of Resolution #32-07 declaring an official intent with'respect to
reimbursement, to be made from a subsequent borrowing, of temporary advances made for capital
expenditures.
RESOLUTION No. 32-07
DECLARATION OF OFFICIAL INTENT WfTH RESPECT TO
REIMBURSEMENT OF TEMPORARY ADVANCES MADE FOR
CAPITAL EXPENDITURES TO BE MADE FROM SUBSEQUENT
BORROWINGS
WHEREAS, Treasury Regulation § 1.150-2 (the "Reimbursement Regulations"), issued pursuant
to Section 150 of the Internal Revenue Code of 1986, as amended, (the "Code") prescribes certain
requirements by which proceeds of tax-exempt bonds, notes, certificates or other obligations included in
the meaning of "bonds" under Section 150 of the Code ("Obligations") used to reimburse advances made
for Capital Expenditures (as hereinafter defined) paid before the issuance of such Obligations may be
deemed "spent' for purposes of Sections 103 and 141 to 150 of the Code and therefore, not further
subject to any other requirements or restrictions under those sections of the Code; and
WHEREAS, such Reimbursement Regulations require that an Issuer (as hereinafter defined}
make a Declaration of Official Intent (as hereinafter defined) to reimburse any Capital Expenditure paid
prior to the issuance of the Obligations intended to fund such Capital Expenditure and require that such
Declaration of Official Intent be made no later than sixty (60) days after payment of the Capital
Expenditure and further require that any Reimbursement Allocation (as hereinafter defined) of the
proceeds of such Obligations to reimburse such Capital Expenditures occur no later than eighteen (18)
months after the later of the date the Capital Expenditure was paid or the date the property acquired with
the Capital Expenditure was placed in service, except that any such Reimbursement Allocation must be
made no later than three years after such Capital Expenditure was paid; and
WHEREAS, the CITY OF DELRAY BEACH (the "Issuer") wishes to ensure compliance with the
Reimbursement Regulations;
NOW, THEREFORE, be it resolved by the Commission of the Issuer that:
Section 1. Definitions. The following definitions apply to the terms used herein:
"Allocation" means written evidence that proceeds of Obligations issued subsequent to the
payment of a Capital Expenditure are to reimburse the Issuer for such payments. 'To allocate" means to
make such an allocation.
"Capital Expenditure" means any expense for an item that is properly depreciable or amortizable
or is otherwise treated as a capital expenditure for purposes of the Code, as well as any costs of issuing
Reimbursement Bonds.
"Declaration of Official Intent' means a written declaration that the Issuer intends to fund Capital
Expenditures with an issue of Reimbursement Bonds and reasonably expects to be reimbursed from the
proceeds of such an issue.
"Issuer" means either a govemmental unit that is reasonably expected to issue Obligations, or
any governmental entity or 501(c)(3) organization that is reasonably expected to borrow funds from the
actual issuer of the Obligations.
"Reimbursement' means the restoration to the Issuer of money temporarily advanced from other
funds, including moneys borrowed from other sources, of the Issuer to pay for Capital Expenditures
before the issuance of Obligations intended to fund such Capital Expenditures. "To reimburse" means to
make such a restoration.
"Reimbursement Bonds" means Obligations that are issued to reimburse the Issuer for Capital
Expenditures, and for certain other expenses permitted by the Reimbursement Regulations, previously
paid by or for the Issuer.
"Reimbursement Regulations" means Treasury Regulation § 150-2 and any amendments thereto
or superseding regulations, whether in proposed, temporary or final form, as applicable, prescribing
conditions under which the proceeds of Obligations may be allocated to reimburse the Issuer for Capital
Expenditures and certain other expenses paid prior to the issuance of the Obligations such that the
proceeds of such Obligations will be treated as "spent" for purposes of Sections 103 and 141 to 150 of
the Code.
Section 2. Declaration of Official Intent.
(a) The Issuer declares that it reasonably expects that the Capital Expenditures described in
Section (b), which were paid no earlier than sixty (60) days prior to the date hereof, or which will be paid
prior to the issuance of any Obligations intended to fund such Capital Expenditures, will be reimbursed
with the proceeds of Obligations, representing a borrowing by the Issuer in the approximate principal
amount, for such Reimbursements, of $3,000,000; and
(b) The Capital Expenditures to be reimbursed are to be used for the construction of various
parks, the Old School Square Garage, and in part, a new Environmental Services Building.
Section 3. Reasonable F~cpectations. The Issuer does not expect any other funds (including
the money advanced to make the Capital Expenditures that are to be reimbursed), to be reserved,
allocated on a long-term basis, or otherwise set aside by the Issuer or any other entity, with respect to the
Capital Expenditures for the purposes described in Section 2(b).
Section 4. Open Meeting. It is found and determined that alt formal actions of this
Commission of the Issuer concerning and relating to the adoption of this resolution were adopted in an
open meeting of this Commission of the Issuer; and that all deliberations of this Commission of the Issuer
and of any of its committees that resulted in such formal action, were in meetings open to the public, in
compliance with the law.
The undersigned has been authorized by Commission of the Issuer to sign this resolution on
behalf of the Commission of the Issuer.
Passed and adopted in regular session on this 1 st day of May, 2007.
CITY OF DELRAY BEACH
By:
Mayor
Attested by:
City Clerk
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