13-R-58 - Reimbursement of Funds regarding Public ImprovementsRESOLUTION NO. 13-R-58
A RESOLUTION RELATING TO ESTABLISHING THE CITY'S
INTENTION TO REIMBURSE ITSELF FOR THE PRIOR LAWFUL
EXPENDITURE OF FUNDS RELATING TO CONSTRUCTING
VARIOUS PUBLIC FMPROVEMENTS FROM THE PROCEEDS OF TAX-
EXEMPT OBLIGATIONS TO BE ISSUED BY THE CITY OR FOR THE
BENEFIT OF THE CITY BY THE CIBOLO CREEK MUNICIPAL
AUTHORITY 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 or the
Cibolo Creek Municipal Authority (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) conshucting, acquiring, purchasing, renovating, equipping, enlarging,
and improving the Cibolo Creek Municipal Authority's utility system concerning the regional
wastewater treatment facility (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, project consultant,
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 projects that are the subject of this Resolution {the Project}j; 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 casts 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 1.1 SO-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 19$6, as amended (the Code}; and
WHEREAS, the Issuer intends to reimburse itself, 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 tluee years after the original expenditures are paid), for the prior lawful capital
expenditure of funds from the proceeds of one or mare series of tax-exempt obligations (the
Obligations} that the Cibolo Creek Municipal Authority currently contemplates issuing in the
principal amount of not to exceed $7,000,000 to finance a portion of the costs of the Project; and
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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 Issuer hereby finds and determines that the reimbursement for the prior
expenditure of funds of the Issuer is not inconsistent with the Issuer'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 Issuer; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS
THAT:
SECTION 1: This Resolution is a declaration of intent to establish the Issuer's
reasonable, official intent under section 1.150-2 of the Regulations and Section 1201A42 to
reimburse itself 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 Issuer's General Fund or other lawfully available funds of the
Issuer.
SECTION 2: The Issuer intends to issue the Obligations and allocate within 30 days
after the date of issuance of the Obligations the proceeds therefrom to reimburse the Issuer 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 {a• would be so chargeable with a proper election) under general federal income tax
principles.
SECTION 4: The Issuer intends to 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 b: With respect to the proceeds of the Obligations allocated to reimburse the
Issuer 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 oftax-exempt obligations.
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.
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SECTION 8: A11 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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PASSED, ADOPTED AND APPROVED on this the 301h day of July, 2013.
ATTEST:
rty Secretary
{ISSUER SEAL)
CITY 4k' SCHERTZ, TEXAS
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