Minutes 11/10/1992 - Laserfiche WebLink

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November 10, 1992 Ayes: Clemons, Epperson, Griffin, Hawks,~King, Pitts~ Webb. Nays: None - CITY MANAGER'S REPORT - 92-384~i Letter from the City Manager:recommendZng adoption of a resolution providing for compliance with reimbursement regulations. "The United States Internal Revenue Service has issued new rules and regulations pertaining to. the method by which governmental:~bodies~ are able to be made for cap~itat~Drojects prior to bonds. Before these new regulations, reimbursed for expenditures the actual sale of~ the the City Council-, after adopting a resolution authorizing the issuance of bonds, would appropriate amounts for the various projects. When the City needed the~ cash~to-pay:the bills_for these projects, a bond issue woutdlbe-brought to market. The proceeds from the sale would then<,be applied~to the expenditures. Several. state and other govemn~en%al'~aoencies throughout the country apparently have abused~the~reimbursement process. For example, some have taken a building constructed twenty years ago from general fund monies and reimbursed themselves from a current bond issue to favorably impact on their general fund balance. Recognizing this as a possible widespread problem, the IRS has issued regulation~ that req6ire an intent form to be executed for each project to be~eimbursed from future bond proceeds. The resolution on your agenda has been prepared by the City's Bend Counsel and reviewed by,~the City~-Aqtorn~y~, It authcrizes~the~C%t~ Manager or the Director ef Finance~to record the Declaration of Intent With ~he CiZy Clerk~and to have it available for public issued. I, there[6r~, recommend the attached resolution." inspection untii the bonds are your favorable consideration of On mohion~of M~. Clemons, and seconded by Mr~ H~wks, the following resolution was adopted, and by the following vote: "A RESOLUTION PROVIDING FOR COMPLIANCE WITH REIMBURSEMENT REGULATIONS.. WHEREAS, the Department of Treasury of the United States has issued final regulations under Section 103 of the Internal Revenue Cod~' of 1986, as amended, to clarify when~the allocation of bond proceeds to reimburse expenditurem previously made by an issuer of tax-exempt bonds is treated as an expenditure of the bond proceeds; and WHEREAS, the regulations apply to bonds issued after March 2, 1992, to reimburse expenditures paid before and after such date; and WHEREAS, the City Council of the City o~f Portsmouth, Virginia (~he "City"), deems it advisable and in the best interests of the City to provide'~fo~ the ~reatment of reimbursements made from proceeds of tax-exempt debt as an expenditure of proceeds thereof; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Portsmouth, Virginia: