HomeMy WebLinkAbout2011-008 Federal Income Tax RegulationsRESOLUTION NO. Og
A RESOLUTION OF THE CITY OF CHUBBUCK, BANNOCK COUNTY, IDAHO,
EXPRESSING OFFICIAL INTENT, PURSUANT TO SECTION 1.150-2 OF THE
FEDERAL INCOME TAX REGULATIONS, TO REIMBURSE THE CITY FROM THE
PROCEEDS OF REVENUE BONDS OF THE CITY FOR CERTAIN EXPENSES TO BE
PAID FROM FUNDS OF THE CITY PENDING THE ISSUANCE OF BONDS; AND
PROVIDING AN EFFECTIVE DATE
WHEREAS, the City Council of the' City of Chubbuck, Bannock
County, Idaho (the "City"), on November 23, 2010, determined that
the expenditure of an amount not to -'exceed $2,000,000 for the
acquisition of water rights was an ordinary and necessary expense
of the City and such expenditure should be financed by the sale
of water revenue bonds to finance the costs of making this
improvement to the domestic water system (the "Bonds"); and
WHEREAS, such determination was validated by the District
Court of the Sixth Judicial District of the State of Idaho in
Case No. 10-52530C; and
WHEREAS, it is the intent of the City to pay certain
expenditures incident to the acquisition of the water rights to
be financed by the proceeds of the water revenue bonds from other
funds of the City pending the sale and delivery of the bonds and
the receipt of the proceeds thereof, and to reimburse the funds
of the City from the proceeds of such bonds.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF CHUBBUCK, Bannock County, Idaho, as follows:
Section 1: The City Council reasonably expects to
reimburse the expenditures described herein with the proceeds of
the Water Revenue Bonds, in the principal amount of approximately
$2,000,000 (hereinafter, the "Water Reimbursement Bonds"),
anticipated to be issued, sold, and delivered no later than April
30, 2012.
Section 2: This declaration of official intention is
made pursuant to Section 1.150-2 of the Income Tax Regulations
promulgated by the United States Department of the Treasury.
Page 1
LIM&
Richard Morgan
From: Stephanie J. Bonney [SJB@msbtlaw.com]
Sent: Monday, May 23, 2011 10:52 AM
To: Steve Smart
Cc: Thomas Holmes; Richard Morgan
Subject: Intent Resolution
Attachments: intent resolution.doc
Steve,
I spoke with Bill Jerrel and he mentioned that he thought the City either had or needed to expend its own money for
expenses in relation to the acquisition of water rights and then wanted to be reimbursed upon the sale of the bonds. If so,
the City needs to adopt the attached resolution. By IRS rules, in order for the City to be reimbursed, it has to declare its
intention to do so. The City Council just needs to adopt the attached resolution at its next meeting.
Please let me know if you have questions.
Stephanie J Bonney
Moore Smith Buxton & Turcke, Chartered
950 West Bannock Street, Suite 520
Boise, ID 83702
208-331-1800 (voice)
208-331-1202 (fax)
sjb@msbtlaw.com
www.msbtlaw.com
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IRS Circular 230 Disclosure:
To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication, unless expressly stated otherwise, was not
intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax -related penalties under the Internal Revenue Code or (ii) promoting, marketing or
recommending to another party any tax -related matter(s) addressed herein.
Section 3: The maximum principal amount of Water
Reimbursement Bonds expected to be issued is $2,000,000.
Section 4: The expenditures with respect to which the
City reasonably expects to be reimbursed from the proceeds of the
Water Reimbursement Bonds are for certain preliminary expenses
that are necessary for the acquisition of water rights.
Section 5: The expenditures with respect to which the
City reasonably expects to be reimbursed from the proceeds of the
Reimbursement Bonds will be made from the General Fund of the
City.
Section 6: The City intends to issue its Water
Reimbursement Bonds within one year of the date such capital
expenditures described herein are paid or placed in service.
Section 7: The city will allocate the Water
Reimbursement Bond proceeds to the expenditures described herein.
DATED this day of June, 2011.
ATTEST:
City Clerk
Page I
CITY OF CHUBBUCK
Bannock County, Idaho
BV A
mayor