Number
240869
Version
Original
Sponsor
THE CHAIR
Title
Certification that obligations can be sold and issued, and declaring official intent to be reimbursed from proceeds of obligations issued under City borrowing resolutions recently adopted or to be considered for adoption by the Common Council.
Analysis
Resolution certifies that obligations can be issued and declares official intent for the City to be reimbursed from proceeds of obligations issued.
Body
Whereas, the Common Council (“Common Council”) of the City of Milwaukee (“City”) has adopted or currently has before it for consideration various borrowing resolutions authorizing the issuance of municipal obligations to finance the property, projects, or programs (the “Projects”) as detailed in the attached exhibit; and
Whereas, section 67.10(6), Wis. Stat., provides that a first-class city may enter into contracts (“Contracts”) in anticipation of the sale of municipal obligations and make expenditures (“Expenditures”) prior to the sale of such municipal obligations for the Projects for which municipal obligations have been authorized if such city’s commissioners of public debt have made certain certifications; and
Whereas, funds for the Expenditures will be provided on an interim basis from the City’s existing cash resources or temporary borrowings (“Temporary Advances”); and
Whereas, pursuant to the budgetary and financial policies and practices of the City, the Temporary Advances are not available to fund the Expenditures on a long-term basis; and
Whereas, it is reasonably expected that the Expenditures will be financed, in whole or in part, on a long-term basis with tax-exempt municipal obligations; and
Whereas, section 1.150-2 of the IRS Regulations and section 54A(d)(2)(D) of the Internal Revenue Code of 1986 (collectively, “Reimbursement Tax Law Rules”) describe the circumstances under which tax-exempt and tax credit debt may be issued to finance reimbursement expenditures, including the Temporary Advances; and
Whereas, Common Council File No. 921116 delegated the responsibility for complying with the “Official Intent” requirements of the Reimbursement Tax Law Rules to the City’s Commissioners of the Public Debt (the “Commissioners”);
Now, therefore, be it resolved, that the Commissioners do hereby certify to the Comptroller of the City (the “Comptroller”) that the municipal obligations, as detailed in the attached exhibit, upon adoption by the Common Council and approval of the Mayor of one or more resolutions authorizing such municipal obligations, may be sold if the Comptroller determines that there is in the City treasury sufficient money (other than that raised for the payment of interest and principal of bonds, mortgages, mortgage certificates or similar instruments of indebtedness) to warrant entering into the Contracts or making the Expenditures prior to the sale of such municipal obligations; and
Be it further resolved, that the Commissioners declare the official intent of the City respecting various borrowing resolutions as detailed in the attached exhibit, to be as follows:
1. The City reasonably expects to reimburse the Expenditures with proceeds of tax-exempt municipal obligations to be issued by the City;
2. This statement of intent is a declaration of official intent (a “Declaration”) under the Reimbursement Tax Law Rules;
3. The maximum principal amounts of municipal obligations to be issued and a general functional description of the Projects to be financed are as detailed in the attached exhibit.
4. Before the date that is 60 days prior to the date of this Declaration, no payments have been made by the City for the Expenditures to be reimbursed relating to a Project described in the attached exhibit, other than for preliminary expenditures that are incurred prior to commencement of construction, rehabilitation, or acquisition of such Project, and these preliminary expenditures do not exceed 20% of the aggregate issue price of that portion of the borrowing or borrowings that finance or are reasonably expected to finance such Project. The term “preliminary expenditures” means architectural, engineering, surveying, soil testing, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction, or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction
5. Each issue of municipal obligations from which an Expenditure for a Project is to be reimbursed will be issued within 18 months following the later of (i) the date of the Expenditure, or (ii) the date on which such Project is placed in service, but no later than 3 years after the date of the Expenditure.
Drafter
Comptroller
Joshua Benson
PD-8689cW.rtf