02-88. , �. ;1 .� `d 1 eJ � i� � P � 'S,
Council File # O 1 ��Y
Resolution #
Green Sheet # ��, aq �O
OF
MINNESOTA
' �p
;,
Presented By
Referred To
Committee: Date
RESOLUTION ESTABLISHING PROCEDURES
RELATING TO COMPLIANCE WITH REIMBURSEMENT BOND
REGULATIONS iJNDER THE INTERNAL REVENUE CODE
1 BE IT RESOLVED by the City Council (the "Council") of the City of Saint Paul, Minnesota (the
2 "City"), as follows:
3 1. Recitals.
4 (a) Minnesota Statutes, Chapter 462C (the "Act") confers upon cities, or housing and
5 redevelopment authorities authorized by ordinance to exercise on behalf of a city, the powers
6 conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of
7 planning, administering, making or purchasing loans with respect to one or more multi-family
8 housing project developments within the boundaries of the city;
9 (b) The Housing and Redevelopment Authority of the City of St. Paul, Minnesota (the
l0 "HRA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul,
11 Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to
12 462C.081;
13 (c) The Internal Revenue Service has issued Treasury Regulations, Section I.150-2
14 (as the same may be amended or supplemented, the "Regulations"), dealing with "reimbursement
15 bond" proceeds, being proceeds of bonds issued by the City or the HRA, and used to reimburse
16 for any project expenditure paid prior to the time of the issuance of those bonds.
17 (d) The Regulations generally require that the issuer of the bonds make a declazation
18 of intent (a "Declaration"), to reimburse such prior expenditures out of the proceeds of
19 subsequently issued bonds, that such declaration be made not later than 60 days after the
20 expenditure is actually paid, and that the bonds be issued and the written reimbursement
21 allocation be made from the proceeds of such bonds within 18 months after the later of (1) the
22 date of payment of the expenditure or (2) the date the project is placed in service (but in no event
23 more than 3 years after actual payment).
24 2. Official Intent Declazation. With respect to housing revenue bonds to be issued by the
25 City or the HRA pursuant to the Act, the Council hereby authorizes the Executive Director of the HRA to
1370094v1
Oa--�'Y
26 make the Declazations on behalf of the City or HI2A. Each Declaration shall comply with the
27 requirements of the Regulations, including without limitation the following:
28 (a) Each Declazation shall be made not later than 60 days after payment of the
29 applicable project cost and shall state that the City or F3RA, as the case may be, reasonably
30 expects to issue bonds to reimburse the expenditure. Each Declaration may be made substantially
31 in the form of the E�ibit A which is attached to and made a part of this Resolution, or in any
32 other format which may at the time comply with the Regulations.
33 (b) Each Declazation sha11(1) contain a reasonably accurate description of the
34 "project," as defined in the Regulations (which may include the property or program to be
35 financed, as applicable), to which the expenditure relates and (2) state the maximum principal
36 amount of bonding expected to be issued far that project.
37 (c) Caze shall be taken so that the City, HRA or their authorized representatives under
38 this Resolution, do not make Declarations in cases where the City or IIRA do not reasonably
39 expect to issue reimbursement bonds to fmance the project costs, and the City and HRA officials
4o aze hereby authorized to consult with bond counsel concerning the requirements of the
41 Regulations and their application in particular circumstances.
42 (d) The City and I-IRA shall be advised from time to time on the desirability and
43 timing of the issuance of reimbursement bonds relating to project expenditures for which the City
44 or HRA have made Declarations.
45 3. Reimbursement Allocations. The Executive Director shall also be responsible for making
46 the "reimbursement allocations" described in the Regulations, being generally written allocations that
47 evidence the City's or HRA's use of the bond proceeds to reimburse the original expenditures.
48 4. Effect. This Resolution shall amend and supplement all prior resolutions and/or
49 procedures adopted by the City or HRA for compliance with the Regulations (or their predecessor
5o versions) for revenue bonds issued pursuant to the Act, and, henceforth, in the event of any
51 inconsistency, the provisions of this Resolution sha11 apply and govern.
1370094v1
oa--8b'
s2
53
Exhibit A
Declaration of Official Intent
54 The undersigned, being the duly appointed and acting Executive Director of the Housing and
55 Redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA"), pursuant to and for
56 purposes of compliance with Treasury Regulations, Section 1.150-2 (the "Regulations"), under the
57 Intemal Revenue Code of 1986, as amended, hereby states and certifies on behalf of the HEtA as follows:
58
59
60
61
5. The undersigned has been and is on the date hereof duly authorized by the HRA to make
and execute this Declazation of Official Intent (the "Declaration") for and on behalf of the HRA.
6. This Declaration relates to the following project, properiy or program (the "Project") and
the costs thereof to be financed:
62 7. The HRA reasonably expects to reimburse the payment of certain costs of the Project out
63 of the proceeds of a bond issue (the "Bonds") to be issued by the IIRA after the date of payment of such
64 costs. As of the date hereof, the HRA reasonably expects that $ is the maYimum principal
65
66
67
68
69
�o
71
72
73
amount of the Bonds which will be issued to finance the Project.
8. Each expenditure to be reimbursed from the Bonds is or will be a capital expenditure or a
cost of issuance, or any of the other types of expenditures described in Section 1.150-2(d)(3) of the
Regulations.
9. As of the date hereof, the statements and expectations contained in this Declaration are
believed to be reasonable and accurate.
Date:
200_ / �
Executive D� or
1370094v1
oa--��
Adoption Certified by Council Secretasy
By:
Approved by
By:
Requested by Department of:
Plannin & Hconomic
By: L+ /
/�..
Approved by F' ial i
By:
Form Approved �
By:
'�pproved by May
By:
�1
1370094v1
Adopted by Council: Date ��., �_( �op�
V
DEPAR'i'MENT/OFFICE/COUNCIL: DATE IlVITIATED Gg�EN SHEET No.: 111296 b� �
PED 7anuary 25, zoo2
CONTACP PERSON & PHONE: BVITIAI✓DATE IIVITLIL/DATE
Allen Carlson, 26b-661b � z DEPAR'CMENT DII2. CITYCOUNCII,
MUST BE ON COUNCII. AGENDA BY (DATE) '�IGN 3 CITY ATTORN6Y_McC 6 COUNCSL RESEARCI-I
pUMBER 4 FINANCIAL SERV DIIt _ FINANCIAL SER /ACCTG
- �R 5 MAYOR (OR ASST.) 1 Team Leader�_
— �T�
ROUTING
February 6, 2002 ��ER
TOTAL # OF SIGNATURE PAGES 1_(CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQUESTED:Sign attached City Council resolution which authorizes the Acting Executive D'uector to
sign a declaration of intent to issue bonds for the Straus Building which said declaration allows the owner,
Sherman Associates to be reimbursed the purchase price for the building from bond proceeds should
reimbursement bonds ever be issued for this housing project.
REWMMENDA110NS: Approve (A) or Reject (R) YERSONAL SERVICE CONTRACI'S MIJST ANSWER THE FOLLOWING
QUESTIONS:
PLANNING COMIvIISSION 1. Has this person/$rtn ever worked under a conhac[ for t}us deparhnent?
CIB COM�-IITTEE Yes No
CIVIL SERVICE CONIIvIISSION 2. Has thu peisonffum evei been a city employee?
Yes No
3. Does this person/fivn possess a skill not normally possessed by any cu�rent ciTy employee�
Yes No
Explain aIl yes answers on separate sheet and attach to green sheet
INITIAI'ING PROBLEM, ISSl7E, OPPORTIJNITY (Who, What, When, Where, Why):
Gearge Sherman purchased the historic Straus building at 350 Sibley Street on December 13, 2001. He intends to
convert the vacant building into 49 units of rental housing and 6,000 square of commercial space. The most
efficient and primary method to finance the renovation is with tax exempt revenue bonds which is estimated to be
about $5.5 million.. In order for the costs of acquisition to be eligible to be reimbursed from the proceeds of the
bonds, the HRA, as the issuer of the conduit revenue bonds, needs to declare its intent, within 60 days of the
expenditure, to use the proceeds of the bonds to reimburse the expenditure. Treasury regulations provide that the
declaration may be made by the issuer or a representative of the issuer (the City). Since the HRA meets after the 60
day period staff is requesting the City Council to act on this item. APPROVAL OF THE RESOLUTION DOES
NOT CONSTITUTE A COMMITMENT TO ISSUE BONDS OR AN APPROVAL OF THE PROJECT.
ADVANTAGESIFAPPROVED: - �
Acquisifion costs can be reimbursed from bond proceeds and the acquisition cost can be included in the basis for
tas credits purposes �
, gq�jP�^.tY!`z � dJ�
e4
DISADVANTAGESIFAPPROVED: '� �,.`:`z�,�`g��`
If acquisition is not reimbursable total development cost increases. �� ��
DISADVANTAGES IF NOT APPROVED: �'
�����
TOTAL AMOUNT OF TRA.NSACTiON: COST/REVENUE BUDGETED:
F[JNDINGSOURCE: ACTIVITYN[7MBER _ � � , �
FINANCIAL INFORMATION: (EXPLAII�
. , �. ;1 .� `d 1 eJ � i� � P � 'S,
Council File # O 1 ��Y
Resolution #
Green Sheet # ��, aq �O
OF
MINNESOTA
' �p
;,
Presented By
Referred To
Committee: Date
RESOLUTION ESTABLISHING PROCEDURES
RELATING TO COMPLIANCE WITH REIMBURSEMENT BOND
REGULATIONS iJNDER THE INTERNAL REVENUE CODE
1 BE IT RESOLVED by the City Council (the "Council") of the City of Saint Paul, Minnesota (the
2 "City"), as follows:
3 1. Recitals.
4 (a) Minnesota Statutes, Chapter 462C (the "Act") confers upon cities, or housing and
5 redevelopment authorities authorized by ordinance to exercise on behalf of a city, the powers
6 conferred by the Act, the power to issue revenue bonds to finance a program for the purposes of
7 planning, administering, making or purchasing loans with respect to one or more multi-family
8 housing project developments within the boundaries of the city;
9 (b) The Housing and Redevelopment Authority of the City of St. Paul, Minnesota (the
l0 "HRA") has been designated, by ordinance, to exercise, on behalf of the City of Saint Paul,
11 Minnesota (the "City") the powers conferred by Minnesota Statutes, Section 462C.01 to
12 462C.081;
13 (c) The Internal Revenue Service has issued Treasury Regulations, Section I.150-2
14 (as the same may be amended or supplemented, the "Regulations"), dealing with "reimbursement
15 bond" proceeds, being proceeds of bonds issued by the City or the HRA, and used to reimburse
16 for any project expenditure paid prior to the time of the issuance of those bonds.
17 (d) The Regulations generally require that the issuer of the bonds make a declazation
18 of intent (a "Declaration"), to reimburse such prior expenditures out of the proceeds of
19 subsequently issued bonds, that such declaration be made not later than 60 days after the
20 expenditure is actually paid, and that the bonds be issued and the written reimbursement
21 allocation be made from the proceeds of such bonds within 18 months after the later of (1) the
22 date of payment of the expenditure or (2) the date the project is placed in service (but in no event
23 more than 3 years after actual payment).
24 2. Official Intent Declazation. With respect to housing revenue bonds to be issued by the
25 City or the HRA pursuant to the Act, the Council hereby authorizes the Executive Director of the HRA to
1370094v1
Oa--�'Y
26 make the Declazations on behalf of the City or HI2A. Each Declaration shall comply with the
27 requirements of the Regulations, including without limitation the following:
28 (a) Each Declazation shall be made not later than 60 days after payment of the
29 applicable project cost and shall state that the City or F3RA, as the case may be, reasonably
30 expects to issue bonds to reimburse the expenditure. Each Declaration may be made substantially
31 in the form of the E�ibit A which is attached to and made a part of this Resolution, or in any
32 other format which may at the time comply with the Regulations.
33 (b) Each Declazation sha11(1) contain a reasonably accurate description of the
34 "project," as defined in the Regulations (which may include the property or program to be
35 financed, as applicable), to which the expenditure relates and (2) state the maximum principal
36 amount of bonding expected to be issued far that project.
37 (c) Caze shall be taken so that the City, HRA or their authorized representatives under
38 this Resolution, do not make Declarations in cases where the City or IIRA do not reasonably
39 expect to issue reimbursement bonds to fmance the project costs, and the City and HRA officials
4o aze hereby authorized to consult with bond counsel concerning the requirements of the
41 Regulations and their application in particular circumstances.
42 (d) The City and I-IRA shall be advised from time to time on the desirability and
43 timing of the issuance of reimbursement bonds relating to project expenditures for which the City
44 or HRA have made Declarations.
45 3. Reimbursement Allocations. The Executive Director shall also be responsible for making
46 the "reimbursement allocations" described in the Regulations, being generally written allocations that
47 evidence the City's or HRA's use of the bond proceeds to reimburse the original expenditures.
48 4. Effect. This Resolution shall amend and supplement all prior resolutions and/or
49 procedures adopted by the City or HRA for compliance with the Regulations (or their predecessor
5o versions) for revenue bonds issued pursuant to the Act, and, henceforth, in the event of any
51 inconsistency, the provisions of this Resolution sha11 apply and govern.
1370094v1
oa--8b'
s2
53
Exhibit A
Declaration of Official Intent
54 The undersigned, being the duly appointed and acting Executive Director of the Housing and
55 Redevelopment Authority of the City of Saint Paul, Minnesota (the "IIRA"), pursuant to and for
56 purposes of compliance with Treasury Regulations, Section 1.150-2 (the "Regulations"), under the
57 Intemal Revenue Code of 1986, as amended, hereby states and certifies on behalf of the HEtA as follows:
58
59
60
61
5. The undersigned has been and is on the date hereof duly authorized by the HRA to make
and execute this Declazation of Official Intent (the "Declaration") for and on behalf of the HRA.
6. This Declaration relates to the following project, properiy or program (the "Project") and
the costs thereof to be financed:
62 7. The HRA reasonably expects to reimburse the payment of certain costs of the Project out
63 of the proceeds of a bond issue (the "Bonds") to be issued by the IIRA after the date of payment of such
64 costs. As of the date hereof, the HRA reasonably expects that $ is the maYimum principal
65
66
67
68
69
�o
71
72
73
amount of the Bonds which will be issued to finance the Project.
8. Each expenditure to be reimbursed from the Bonds is or will be a capital expenditure or a
cost of issuance, or any of the other types of expenditures described in Section 1.150-2(d)(3) of the
Regulations.
9. As of the date hereof, the statements and expectations contained in this Declaration are
believed to be reasonable and accurate.
Date:
200_ / �
Executive D� or
1370094v1
oa--��
Adoption Certified by Council Secretasy
By:
Approved by
By:
Requested by Department of:
Plannin & Hconomic
By: L+ /
/�..
Approved by F' ial i
By:
Form Approved �
By:
'�pproved by May
By:
�1
1370094v1
Adopted by Council: Date ��., �_( �op�
V
DEPAR'i'MENT/OFFICE/COUNCIL: DATE IlVITIATED Gg�EN SHEET No.: 111296 b� �
PED 7anuary 25, zoo2
CONTACP PERSON & PHONE: BVITIAI✓DATE IIVITLIL/DATE
Allen Carlson, 26b-661b � z DEPAR'CMENT DII2. CITYCOUNCII,
MUST BE ON COUNCII. AGENDA BY (DATE) '�IGN 3 CITY ATTORN6Y_McC 6 COUNCSL RESEARCI-I
pUMBER 4 FINANCIAL SERV DIIt _ FINANCIAL SER /ACCTG
- �R 5 MAYOR (OR ASST.) 1 Team Leader�_
— �T�
ROUTING
February 6, 2002 ��ER
TOTAL # OF SIGNATURE PAGES 1_(CLIP ALL LOCATIONS FOR SIGNATURE)
ACTION REQUESTED:Sign attached City Council resolution which authorizes the Acting Executive D'uector to
sign a declaration of intent to issue bonds for the Straus Building which said declaration allows the owner,
Sherman Associates to be reimbursed the purchase price for the building from bond proceeds should
reimbursement bonds ever be issued for this housing project.
REWMMENDA110NS: Approve (A) or Reject (R) YERSONAL SERVICE CONTRACI'S MIJST ANSWER THE FOLLOWING
QUESTIONS:
PLANNING COMIvIISSION 1. Has this person/$rtn ever worked under a conhac[ for t}us deparhnent?
CIB COM�-IITTEE Yes No
CIVIL SERVICE CONIIvIISSION 2. Has thu peisonffum evei been a city employee?
Yes No
3. Does this person/fivn possess a skill not normally possessed by any cu�rent ciTy employee�
Yes No
Explain aIl yes answers on separate sheet and attach to green sheet
INITIAI'ING PROBLEM, ISSl7E, OPPORTIJNITY (Who, What, When, Where, Why):
Gearge Sherman purchased the historic Straus building at 350 Sibley Street on December 13, 2001. He intends to
convert the vacant building into 49 units of rental housing and 6,000 square of commercial space. The most
efficient and primary method to finance the renovation is with tax exempt revenue bonds which is estimated to be
about $5.5 million.. In order for the costs of acquisition to be eligible to be reimbursed from the proceeds of the
bonds, the HRA, as the issuer of the conduit revenue bonds, needs to declare its intent, within 60 days of the
expenditure, to use the proceeds of the bonds to reimburse the expenditure. Treasury regulations provide that the
declaration may be made by the issuer or a representative of the issuer (the City). Since the HRA meets after the 60
day period staff is requesting the City Council to act on this item. APPROVAL OF THE RESOLUTION DOES
NOT CONSTITUTE A COMMITMENT TO ISSUE BONDS OR AN APPROVAL OF THE PROJECT.
ADVANTAGESIFAPPROVED: - �
Acquisifion costs can be reimbursed from bond proceeds and the acquisition cost can be included in the basis for
tas credits purposes �
, gq�jP�^.tY!`z � dJ�
e4
DISADVANTAGESIFAPPROVED: '� �,.`:`z�,�`g��`
If acquisition is not reimbursable total development cost increases. �� ��
DISADVANTAGES IF NOT APPROVED: �'
�����
TOTAL AMOUNT OF TRA.NSACTiON: COST/REVENUE BUDGETED:
F[JNDINGSOURCE: ACTIVITYN[7MBER _ � � , �
FINANCIAL INFORMATION: (EXPLAII�