IV.7. Approve Resolution 2020-003; BishopJanuary 7, 2020 Council Report 2020-007
APPROVE RESOLUTION 2020-003
DECLARING THE OFFICIAL INTENT OF THE CITY
OF HOPKINS TO REIMBURSE CERTAIN
EXPENDITURES FROM THE PROCEEDS OF EQUIPMENT
CERTIFICATES TO BE ISSUED BY THE CITY
Proposed Action.
Staff recommends adoption of the following motion: Move that Council adopt Resolution 2020-
003 Declaring the Official Intent of the City to Reimburse Certain Expenditures from the
Proceeds of Equipment Certificates to be Issued by the City regarding equipment purchases.
Overview:
The City will purchase a wheel loader for snow plowing listed in the 2020-2024 Equipment
Replacement Plan. It has an estimated purchase price of $218,000 and a 20 year useful life. The
City intends to issue equipment certificates in 2020, which require equipment to have at least a
10 year useful life. Due to the timing of the purchases the City may incur some costs before
equipment certificates are issued. Approving this resolution will allow any capital expenditures
that are incurred before the issuance to be reimbursed from the proceeds and comply with I.R.S.
regulations.
Supporting Information:
Resolution 2020-003
________________________________________
Nick Bishop
Finance Director
CITY OF HOPKINS
HENNEPIN COUNTY, MINNESOTA
RESOLUTION 2020-003
DECLARING THE OFFICIAL INTENT OF THE CITY OF HOPKINS
TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS
OF EQUIPMENT CERTIFICATES TO BE ISSUED BY THE CITY
WHEREAS, the Internal Revenue Service has issued Treas. Reg. § 1.150-02 (the
“Reimbursement Regulations”) providing that proceeds of tax exempt bonds used to reimburse
prior expenditures will not be deemed spent unless certain requirements are met; and
WHEREAS, the City of Hopkins, Minnesota (the “City”) expects to incur certain expenditures
that may be financed temporarily from sources other than bonds, and reimbursed from the
proceeds of a tax-exempt bond;
WHEREAS, the City has determined to make this declaration of official intent (“Declaration”)
to reimburse certain costs from proceeds of bonds in accordance with the Reimbursement
Regulations.
NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Hopkins hereby
1. The City intends to incur expenditures for the purchase of equipment included in the
2020-2024 Equipment Replacement fund for $218,000.
2. The City reasonably expects to reimburse the expenditures made for certain equipment
costs from the proceeds of the equipment certificates. All reimbursed expenditures will
be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for
reimbursement under Section 1.150-2(d)(3) of the Reimbursement Regulation.
3. This Declaration has been made not later than 60 days after payment of any original
expenditure to be subject to a reimbursement allocation with respect to the proceeds of
equipment certificates, except for the following expenditures: (a) costs of issuance of
bonds; (b) costs in an amount not in excess of $100,000 or 5 percent of the aggregate
issue price of the issue.
4. This declaration is an expression of the reasonable expectations of the City based on the
facts and circumstances known to the City as of the date hereof. The anticipated original
expenditures for the equipment are consistent with the City’s budgetary and financial
circumstances.
5. This Declaration is intended to constitute a declaration of official intent for the purposes
of the Reimbursement Regulations.
Adopted by the City Council of the City of Hopkins this 7th day of January, 2020.
By:___________________________
Jason Gadd, Mayor
ATTEST:
_______________________________
Amy Domeier, City Clerk