12-R-10 - Reimbursement by Cibolo Valley Local Government CorporationRESOLUTION NO. 12 -R -10
A RESOLUTION RELATING TO ESTABLISHING THE CITY'S
INTENTION TO BE REIMBURSED BY THE CIBOLO VALLEY LOCAL
GOVERNMENT CORPORATION FOR THE PRIOR LAWFUL
EXPENDITURE OF FUNDS FROM THE PROCEEDS OF TAX - EXEMPT
OBLIGATIONS TO BE ISSUED BY THE CIBOLO VALLEY LOCAL
GOVERNMENT CORPORATION FOR AUTHORIZED PURPOSES;
AUTHORIZING OTHER MATTERS INCIDENT AND RELATED
THERETO; AND PROVIDING AN EFFECTIVE DATE
WHEREAS, the City Council (the Governing Body) of the City of Schertz, Texas (the
City), acting by and through the Cibolo Valley Local Government Corporation (the Issuer) has
entered into or will enter into various contracts pertaining to the expenditure of lawfully
available funds of the Issuer to finance the costs associated with (i) constructing, acquiring,
purchasing, renovating, equipping, enlarging, and improving the utility system that will be
owned, operated, and maintained by the Cibolo Valley Local Government Corporation and that
is commonly known as the Guadalupe Project, and the purchase of materials, supplies,
equipment, land, and rights -of -way for authorized needs and purposes relating to these utility
system improvements (the Construction Costs), (ii) the payment of various engineering costs,
including design testing, design engineering, and construction inspection related to the
Construction Costs (the Engineering Costs), (iii) the payment of various architectural costs,
including preparation of plans and specifications and various other plans and drawings related to
the Construction Costs (the Architectural Costs), and (iv) the payment of various administrative
costs, including the fees of bond counsel, financial advisor, project manager, other professionals,
and bond printer (the Administrative Costs) [the Construction Costs, the Engineering Costs, the
Architectural Costs, and the Administrative Costs collectively constitute the costs of the Issuer's
project that is the subject of this Resolution (the Project)]; and
WHEREAS, the provisions of Section 1201.042, as amended, Texas Government Code
(Section 1201.042) provide that the proceeds from the sale of obligations issued to finance the
acquisition, construction, equipping, or furnishing of any project or facilities, such as the Project,
may be used to reimburse the Issuer for costs attributable to such project or facilities paid or
incurred before the date of issuance of such obligations; and
WHEREAS, the United States Department of Treasury (the Department) released
Regulation Section 1.150 -2 (the Regulations) which establishes when the proceeds of obligations
are spent and therefore are no longer subject to various federal income tax restrictions contained
in the Internal Revenue Code of 1986, as amended (the Code); and
WHEREAS, the Issuer intends to reimburse itself (and, in turn, the City), within eighteen
months from the later of the date of expenditure or the date the property financed is placed in
service (but in no event more than three years after the original expenditures are paid), for the
prior lawful capital expenditure of funds from the proceeds of one or more series of tax- exempt
obligations (the Obligations) that the Cibolo Valley Local Government Corporation currently
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contemplates issuing in the principal amount of not to exceed $32,000,000 to finance a portion of
the costs of the Project; and
WHEREAS, under the Regulations, to fund such reimbursement with proceeds of the
Obligations, the Issuer must declare its expectation ultimately to make such reimbursement
before making the expenditures; and
WHEREAS, the City hereby finds and determines that the reimbursement for the prior
expenditure of funds of the City is not inconsistent with the City's budgetary and financial
circumstances; and
WHEREAS, the Governing Body hereby finds and determines that the adoption of this
Resolution is in the best interests of the citizens of the City; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS
1'ff 11"
SECTION 1: This Resolution is a declaration of intent to establish the City's reasonable,
official intent under section 1.150 -2 of the Regulations and Section 1201.042 for the Issuer to
reimburse itself (and, in turn, the City) from certain of the proceeds of the Obligations for any
capital expenditures previously incurred (not more than 60 days prior to the date hereof) or to be
incurred with respect to the Project from the City's General Fund or other lawfully available
funds of the Issuer.
SECTION 2: The City intends that the Issuer will issue the Obligations and allocate
within 30 days after the date of issuance of the Obligations the proceeds therefrom to reimburse
the Issuer (and, in turn, the City) for prior lawful expenditures with respect to the Project in a
manner to comply with the Regulations.
SECTION 3: The reimbursed expenditure will be a type properly chargeable to a capital
account (or would be so chargeable with a proper election) under general Federal income tax
principles.
SECTION 4: The City intends that the Issuer will otherwise comply, in addition to those
matters addressed within this Resolution, with all the requirements contained in the Regulations.
SECTION 5: This Resolution may be relied upon by the appropriate officials at the
Office of the Attorney General for the State of Texas and establishes compliance by the Issuer
with the requirements of Texas law and the Regulations.
SECTION 6: With respect to the proceeds of the Obligations allocated to reimburse the
Issuer (and, in turn, the City) for prior expenditures, the Issuer shall not employ an abusive
device under Treasury Regulation Section 1.148 -10, including using within one year of the
reimbursement allocation, the funds corresponding to the proceeds of the Obligations in a
manner that results in the creation of "replacement proceeds ", as defined in Treasury Regulation
Section 1.148 -1, of the Obligations or another issue of tax- exempt obligations.
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SECTION 7: The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the Governing Body.
SECTION 8: All ordinances and resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Resolution are hereby repealed to the extent of such
conflict, and the provisions of this Resolution shall be and remain controlling as to the matters
resolved herein.
SECTION 9: This Resolution shall be construed and enforced in accordance with the
laws of the State of Texas and the United States of America.
SECTION 10: If any provision of this Resolution or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Resolution and the application
of such provision to other persons and circumstances shall nevertheless be valid, and the
Governing Body hereby declares that this Resolution would have been enacted without such
invalid provision.
SECTION 11: It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, as amended, Texas Government Code.
SECTION 12: This Resolution shall be in force and effect from and after its final
passage, and it is so resolved.
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95428673.3
PASSED, ADOPTED AND APPROVED on this the 7h day of February, 2012.
CITY OF SCHERTZ, TEXAS
Mayor `
ATTEST:
� 5� S�-xS� C�Y'N�
City Secretary
(CITY SEAL)
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95428673.3
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS §
COUNTIES OF GUADALUPE, COMAL §
AND BEXAR §
CITY OF SCHERTZ §
THE UNDERSIGNED HEREBY CERTIFIES that:
1. On the 7th day of February, 2012, the City Council (the Council) of the City of
Schertz, Texas (the City) convened in regular session at its regular meeting place in the City Hall
of the City (the Meeting), the duly constituted members of the Council being as follows:
Harold D. Baldwin
Jim Fowler
David Scagliola
George Antuna, Jr.
Cedric Edwards, Sr.
Michael Carpenter
Mayor
Mayor Pro Tem
Councilmember
Councilmember
Councilmember
Councilmember
and all of such persons were present at the Meeting, except the following: `Mo,%,,,G"L R,
thus constituting a quorum. Among other business considered at the Meeting, the attached
resolution (the Resolution) entitled:
A RESOLUTION RELATING TO ESTABLISHING THE CITY'S INTENTION
TO BE REIMBURSED BY THE CIBOLO VALLEY LOCAL GOVERNMENT
CORPORATION FOR THE PRIOR LAWFUL EXPENDITURE OF FUNDS
FROM THE PROCEEDS OF TAX - EXEMPT OBLIGATIONS TO BE ISSUED
BY THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION FOR
AUTHORIZED PURPOSES; AUTHORIZING OTHER MATTERS INCIDENT
AND RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE
was introduced and submitted to the Council. After presentation and due consideration of the
Resolution, a motion was made by Councilmember s that the Resolution be
finally passed and adopted in accordance with the City's Home Rule Charter. The motion was
seconded by Councilmember -SocZ�Q-2 and carried by the following vote:
L--) voted "For" (D voted "Against" D abstained
all as shown in the official Minutes of the Council for the Meeting.
2. The attached Resolution is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the Council of the City on
the date of the Meeting are those persons shown above, and, according to the records of my
office, each member of the Council was given actual notice of the time, place, and purpose of the
Meeting and had actual notice that the Resolution would be considered; and the Meeting and
95446883.1
deliberation of the aforesaid public business, including the subject of the Resolution, was posted
and given in advance thereof in compliance with the provisions of Chapter 551, as amended,
Texas Government Code.
IN WITNESS WHEREOF, I have signed my name officially and affixed the seal of the
City, this 7th day of February, 2012.
City Secretary
City of Schertz, Texas
(SEAL)
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95446883.1