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HomeMy WebLinkAbout028823 RES - 10/26/2010RESOLUTION NO. A RESOLUTION RELATING TO ESTABLISHING THE CITY'S INTENTION TO REIMBURSE ITSELF IN AN AMOUNT NOT TO EXCEED 575,000,000 FOR THE PRIOR LAWFUL EXPENDITURE OF FUNDS FROM THE PROCEEDS OF TAX-EXEMPT OR TAXABLE OBLIGATIONS TO BE ISSUED BY THE CITY FOR AUTHORIZED PURPOSES RELATING TO CONSTRUCTING IMPROVEMENTS TO THE CITY'S COMBINED UTILITY SYSTEM; AUTHORIZING MATTERS INCIDENT AND RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council (the Governing Body) of the City of Corpus Christi, Texas (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, improving, enlarging, repairing, and extending the City's combined utility system (the System) and the purchase of equipment, supplies, machinery, and other personal property relating to the System (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 project that is the subject of this Resolution (the Project)]; and WHEREAS, the provisions of Section 1201.042, as amended, Texas Government Code 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, 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 obligations (the Obligations) that the Issuer currently contemplates issuing in an amount not to exceed $75,000,000 to finance a portion of the costs of the Project; and 90216198.2 028823 INDEXED 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 CORPUS CHRISTI, 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 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 (or 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 6: 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 of tax-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. 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 -2- 90216198,2 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. [The remainder of this page intentionally left blank] -3- 90216198.2 PASSED, ADOPTED AND APPROVED on this the 26th day of October, 2010. CITY OF CORPUS CHRISTI gel-alte Joe Ad e Mayor ATTEST: Armando Chapa City Secretary (CITY SEAL) Approved this 14th day of October, 2010 By: e�� Lisa Aguilar, As . tant City Attorney for City Attorney Corpus Christi, Texas of L , 2010 The above resolution was passed by the following vote: Joe Adame Chris N. Adler Brent Chesney Larry Elizondo, Sr. eA/uF Kevin Kieschnick Priscilla G. Leal John E. Marez Nelda Martinez Mark Scott 028823 THE STATE OF TEXAS )( COUNTY OF NUECES )( I, the undersigned, City Secretary of the City of Corpus Christi, Texas, do hereby certify that the above and foregoing is a true, full and correct copy of a Resolution passed by the City Council of the City of Corpus Christi, Texas (and of the minutes pertaining thereto) on the 26th day of October, 2010, relating to establishing the City's intention to reimburse itself in an amount not to exceed $75,000,000 for improvements to the City's combined utility system, which Resolution is duly of record in the minutes of said City Council, and said meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Texas Government Code, Chapter 551. EXECUTED UNDER MY HAND AND SEAL of said City, this the 26th day of October, 2010. City Secretary (CITY SEAL) -5- 90216198.2