HomeMy WebLinkAboutR-91-0709i
J-91-763
b/28/91
RESOLUTION NO. (� _ o
A RESOLUTION AUTHORIZING THE EXECUTION AND
FILING OF DECLARATIONS OF OFFICIAL INTENT
WITH RESPECT TO REIMBURSEMENTS FROM NOTE AND
BOND PROCEEDS OF TEMPORARY ADVANCES MADE FOR
CAPITAL EXPENDITURES AND RELATED MATTERS;
PROVIDING AN EFFECTIVE DATE.
WHEREAS, the Internal Revenue Service (IRS) has proposed,
that proceeds of bonds, notes or other obligations (bonds) will
be deemed "spent" for purposes of Sections 103 and 141 to 180 of
the Internal Revenue Code of 1986 (the Code) when used to
reimburse advances made for expenditures paid before the issuance
of such bonds, so that the proceeds so used will no longer be
subject to requirements or restrictions set forth in those
sections of the Code; and
WHEREAS, certain provisions of the proposed regulations
would apply to expenditures currently being paid or to be paid
before September 8, 1991 if they are to be reimbursed from the
proceeds of bonds issued after September 7, 1991, and all of the
provisions will apply to expenditures paid after September 7,
1991 which are to be reimbursed from governmental use bonds or
qualified 501(o)(3) bonds issued after the expenditure is paid;
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WHEREAS, it is deemed advisable that steps be taken to
prepare to comply with the proposed regulations in the event that
they are ultimately adopted by IRS although the provisions of the
proposed regulations may be altered in some respects before they
become final; and
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The recital and findings contained in the
Preamble to this Resolution are hereby adopted by reference
thereto and incorporated herein as if fully set forth in this
Section.
CITY COMMISSION
M£=iG OF
O CT a 1991
91- 709
Section 2. In addition to the definitions stated in the
Preamble, the following definitions apply to the terms used
herein:
"Authorized Officer" means the City Manager and any
person with authority at the time
to exercise functions of that
office, or the Finance Director of
the City and any person with
authority at the time to exercise
functions of that office, or
the chief financial officer of any
City department or agency with
authority to make or authorize the
expenditure to be advanced.
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"Bonds" means and includes bonds, notes, certificates
and other obligations included in
the meaning of "bonds" under
Section 150 of the Code.
"Declaration of Official
Intent" means the declaration
of official intent, as contemplated in the Reimbursement
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Regulations, that an expenditure
is expected to be reimbursed -
from the proceeds of Reimbursement Bonds to be issued after the
expenditure is paid.
"Public Records" means
the records kept by the City
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Clerk, which are required to be available for reasonable public
inspection.
"Reimbursement" means the restoration to the issuer or
conduit borrower of money temporarily advanced from its other
funds and spent, before the issuance of the Reimbursement Bonds,
on property having a reasonably expected economic life of one
year or more. "Reimbursement" does not include the refunding or
retiring of Bonds previously issued and sold to, or borrowings
from unrelated entities (entities not in the same "controlled
group", as defined in the Reimbursement Regulations).
"Reimbursement Regulations" means Treasury Regulations,
whether in proposed, temporary or final form, as at the time and
as may be applicable, prescribing conditions under which the
proceeds of bonds when allocated or applied to a reimbursement
will be treated as "spent" for purposes of Sections 103 and 141
to 150 of the Code, including the Proposed Treasury Regulations
(Sections 1.103-17 and 1.103-18 (FI-89-89)).
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Section 3. Authorization of Deolarations of Intent, The
Authorized Officer is authorized to prepare, sign, and file in
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the Public Records. Declarations of Official Intent at the
appropriate time sand in appropriate form, consistent with the
Reimbursement Regulations, with respect to expenditures to be
made from money temporarily available and which is to be
reimbursed (in accordance with applicable authorizations,
policies and practices) from the proceeds of Reimbursement Bonds:
to make appropriate reimbursement allocations, and to take any
other actions as may be appropriate under the Reimbursement
Regulations to qualify proceeds used for reimbursement as "spent"
for purposes of Section 103 and Sections 141 to 150 of the Code.
Section 4. Flllngf and Public Inspections. Each Declaration
of Official Intent shall be filed in the Public Records not later
than the earlier of (i) ten days after the date of the
Declaration of Official Intent or (ii) the date of issuance of
the Reimbursement Bonds pertinent to such Declaration of Official
Intent, and shall be available for public inspection continuously —
during normal business hours on every business day to an
including the date of issuance of the Reimbursement Bonds.
Section 5. Conduit Issues. With regard to Reimbursement
Bonds any portion of the proceeds of which are to be loaned to a
borrower for its purposes (conduit borrower), any Declaration of
Official Intent by he conduit borrower with respect to
reimbursement of prior expenditures may be filed, at the option
of the conduit borrower, with the Public Records for inspection
by the general public as provided in Section 4.
Section 6. Bffeetive Date. This Resolution shall become
effective immediately upon its adoption.
PASSED AND ADOPTED this 3rd day of October 1891.
4E''XAVIER SUAREZ, MAYOR
AI
City Clerk
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91- 709
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PREPARED AND APPROVED BY!
RAFAEL 0. DIAZ
Chief Assistant City Attorney
APPROVED AS TO FORM AND
CORRECTNESS:
A. MyMttorneyS, IIIActing
ROD/pb/M2827
' CITY OF MIAMI, PLORIDA W9
1 INTER -OFFICE MEMORANDUM
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DATE ( �) FILE
I To Honorable Mayor and Members SEi J 1991
of th City Commission _
SUBJECT
City Commission
Agenda Item
ROM : REFERENCES
Cesar H. Odio
City Manager ENCLOSURES
RECOMMENDATION'
It is respectfully recommended that the attached resolution
authorizing the execution and filing of Declarations of Official
Intent with respect to reimbursements from note and bond proceeds
of temporary advances made for capital expenditures, and related
matters, be approved.
$ACKGROUND:
Appropriations for capital projects provide the approval of the
City Commission for the design and construction of capital
projects. Often times projects already approved by the City
Commission incur expenses prior to the bond sale, with the
expectation of having such expenses reimbursed once the bond sale
takes place. The timing of a bond sale may vary depending upon
several factors, including market demand and interest rates.
Newly proposed Treasury Regulations prescribe certain conditions
which must be met to avoid possible adverse federal tax law
consequences in connection with reimbursing capital expenditures
from the proceeds of subsequently issued tax-exempt notes or
bonds.
If those proposed regulations are adopted, any proceeds of
reimbursement bonds used to reimburse prior expenditures may not
be deemed to be spent for those expenditures. Therefore, those
proceeds'will remain subject to federal tax law restrictions and
conditions, which may include, among others, arbitrage yield
restrictions, rebate, or payment of alternative penalties, as may
apply to the unspent proceeds, unless there is "objective
evidence" that at the time the expenditure was paid (a) the
issuer expected to reimburse the expenditure from the proceeds of
the borrowing, and (b) other unbudgeted or uncommitted money was
not lawfully available on a long-term basis for the expenditure,
and that various other requirements are met.
The attached resolution proposes that once capital projects are
approved by the City Commission, a City Official, such as the
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City Commission Agenda item
Page -2-
City Manager or Finance Director, will be authorized to execute
and file with the City Clerk a Declaration of official Intent
if bonds or notes are not expected to be sold before any
expenditures are incurred. This Declaration will meet the
"objective evidence" requirement of the Federal Regulations.
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