2016-29612 Reso RESOLUTION NO. 2016-29612
A RESOLUTION OF THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA,
AUTHORIZING DECLARATIONS OF OFFICIAL INTENT
UNDER U.S. TREASURY REGULATIONS WITH RESPECT
TO REIMBURSEMENTS FROM BOND, NOTE AND OTHER
OBLIGATION PROCEEDS OF TEMPORARY ADVANCES
MADE FOR PAYMENTS PRIOR TO ISSUANCE, AND
RELATED MATTERS.
WHEREAS, United States Treasury Regulations §1.150-2 (the "Reimbursement
Regulations") prescribe conditions under which proceeds of bonds, notes or other obligations
("Bonds") used to reimburse advances made for capital and certain other expenditures ("Original
Expenditures") paid before the issuance of such Bonds will be deemed to be expended (or properly
allocated to expenditures) for purposes of Sections 103 and 141-150 of the Internal Revenue Code
of 1986, as amended (the "Code"), upon such reimbursement so that the proceeds so used will no
longer be subject to requirements or restrictions under those sections of the Code; and
WHEREAS, certain provisions of the Reimbursement Regulations require that there be a
Declaration of Official Intent not later than 60 days following payment of the Original Expenditures
expected to be reimbursed from proceeds of Bonds, and that the reimbursement occur within certain
prescribed time periods after an Original Expenditure is paid or after the property resulting from that
Original Expenditure is placed in service; and
WHEREAS, the Mayor and City Commission of the City of Miami Beach, Florida (the
"City")wishes to take steps to comply with the Reimbursement Regulations;
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA:
Section 1. Definitions. The following definitions apply to the terms used herein:
"Authorized Officer"means the City Manager of the City, the Chief Financial Officer of the
City or in the absence of both, the Treasury and Debt Manager of the City.
"Declaration of Official Intent"means a declaration of intent, in the form, manner and time
contemplated in the Reimbursement Regulations, that the advances for expenditures referred to
therein are reasonably expected to be reimbursed from the proceeds of Bonds to be issued after
those expenditures are paid.
"Reimbursement" or "reimburse" means the restoration to the City of money temporarily
advanced from its own funds and spent for Original Expenditures before the issuance of the Bonds,
evidenced in writing by an allocation on the books and records of the City that shows the use of the
proceeds of the Bonds to restore the money advanced for the Original Expenditures.
010-8268-6252/1/AMERICAS
"Reimbursement" or "reimburse" generally does not include the refunding or retiring of Bonds
previously issued and sold to,or borrowings from,unrelated entities.
Section 2. Authorization and Requirement of Declarations of Official Intent. Each
Authorized Officer is authorized to prepare and sign Declarations of Official Intent in substantially
the form attached with respect to Original Expenditures to which the Reimbursement Regulations
apply, to be made from money temporarily advanced and that is reasonably expected to be
reimbursed (in accordance with applicable authorizations, policies and practices) from the proceeds
of Bonds, to make appropriate reimbursement and timely allocations from the proceeds of the
Bonds to reimburse such Original Expenditures, and to take any other actions as may be
appropriate, all at the times and in the manner required under the Reimbursement Regulations in
order for the reimbursement to be treated as an expenditure of such proceeds for purposes of
Sections 103 and 141 to 150 of the Code. No advance from any fund or account or order for
payment may be made for Original Expenditures (other than expenditures excepted from such
requirement under the Reimbursement Regulations) that are to be reimbursed subsequently from
proceeds of Bonds unless a Declaration of Official Intent with respect thereto is made within the
time required by the Reimbursement Regulations.
Section 3. Effective Date. This Resolution shall take effect immediately upon its
adoption. /
PASSED AND ADOPTED this /9 day of Aide,,,!2016.
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010-8268-6252/1/AMERICAS
DECLARATION OF OFFICIAL INTENT
For Reimbursement of Expenditures from Bonds/Notes
This is a Declaration of Official Intent under U.S. Treasury Regulations for purposes of Sections
103 and 141 to 150 of the Internal Revenue Code of 1986,as amended(the"Code").
1. The undersigned, on behalf of the City of Miami Beach, Florida(the"City") declares that
the City reasonably expects that the capital and other expenditures described in
paragraph 2 (the "Project") will be reimbursed with the proceeds of"bonds" (as defined
in Section 150 of the Code). The maximum principal amount of bonds expected to be
issued for the Project is $
2. Description of capital and other expenditures to be reimbursed. [Complete either the first
option or the second option but do not use the second option unless the functional
purpose of the fund or account is generally descriptive of the purpose of the
expenditures.]
Expenditures for(insert a general functional description of property,project,program
or purpose):
[OR]
Expenditures initially made from and to be reimbursed to the fund or account entitled
, the general functional purpose
of which fund or account is
The undersigned has been authorized by the City to make and sign this Declaration on
behalf of the City.
Date of Declaration: CITY OF MIAMI BEACH,FLORIDA
, 20
By
(Signature)
(Type or print Name and Title)
Caution: This Declaration of Official Intent will not be effective unless the bonds providing
moneys for the reimbursement are issued and the reimbursement for the Project
described above is made (by an allocation on the books and records identifying the
expenditures as in paragraph 2 above) within the applicable period prescribed in the
Treasury Regulations — generally, 18 months after the later of the date of the
expenditure or the date the Project is placed in service,but in no event later than three
years after the date of the expenditure.
010-8268-6252/1/AMERICAS
INSTRUCTIONS
for
DECLARATION OF OFFICIAL INTENT
for
Reimbursement From Tax-Exempt Bonds/Notes
PURPOSE
The form to which these instructions pertain is intended for use under Treasury Regulations
§1.150-2 (the "Reimbursement Regulations") in order that capital and certain other expenditures
paid with moneys temporarily advanced from other funds that are reasonably expected to be
reimbursed from proceeds of subsequently issued notes, bonds or other obligations ("Bonds") may
qualify for such reimbursement. Failure to comply can result in the inability for federal income tax
purposes to treat proceeds of the Bonds used to reimburse the expenditures as spent for
arbitrage/rebate purposes. With certain exceptions for qualified "preliminary expenditures" and
certain de minimis expenditures, a Declaration of Official Intent must be made not later than 60
days after payment of any expenditure expected to be reimbursed from proceeds of Bonds.
Declarations of Official Intent should not be made systematically for all expenditures or in
exaggerated amounts regardless of actual expectations,but only when it is realistically expected that
the expenditure will be reimbursed from the proceeds of Bonds. In general only capital
expenditures can be reimbursed from the proceeds of Bonds. "Capital expenditures" include
(subject to any more restrictive state law) any costs related to the acquisition or construction of land
or interests in real estate, buildings, structures, additions thereto, or other permanent improvements,
and restoration or betterments made to increase the value of property or substantially prolong its
useful life, and machinery, equipment, furniture and fixtures or other property having a useful life of
at least one year or such longer period as is required by applicable state law. Costs of issuance of
the Bonds are capital expenditures. Certain other expenditures also qualify for reimbursement. The
Regulations do not apply to, and this form is not needed in connection with, the use of proceeds of
Bonds to finance expenditures paid on or after the date of issuance of the Bonds. This form also
generally is not needed in connection with the issuance of Bonds to refinance external borrowings
(taxable or tax-exempt).
INSTRUCTIONS
These instructions are based on the Reimbursement Regulations currently in effect. The
references are to the particular paragraphs on the form of Declaration of Official Intent.
Paragraph 1. Insert the anticipated maximum principal amount of Bonds expected to be
issued for the Project. The amount should include the maximum principal amount of all Bonds to
be issued for the Project (i.e., Bonds for reimbursement of prior expenditures and Bonds to finance
expenditures to be paid on or after the date of issuance of the Bonds). A Project includes any
property, project, or program (e.g., highway capital improvement program, hospital equipment
acquisition, or school building renovation).
Paragraph 2. The general description of the capital expenditures to be reimbursed may be
set forth in one of two ways -- either by a functional description of the property, project or program
for which the expenditures are made--
Examples -- "highway capital improvement program"; "street and bridge improvements";
"hospital equipment acquisition"; "school buildings renovation";
or by identification of the fund or account from which the money will be advanced to pay the
expenditures that will be reimbursed subsequently from Bonds, and a statement of the general
functional purpose of that fund or account--
010-8268-6252/1/AMERICAS
Example -- "parks and recreation fund, the general functional purpose of which fund or
account is recreational facility capital improvement program."
The second option concerning identification and description of the fund can be used where the fund
purpose, in effect, describes the generic purpose of the project, property or program, such as a
waterworks improvement for which money is advanced from the water utility capital improvement
fund. If the money is to be advanced from a general purpose fund such as the general fund or a
capital improvements fund that is available for any type of capital improvement, use the first option
by stating the generic function of the project,property or improvement.
501(c) Organizations. If the proceeds of the Bonds will be loaned to a 501(c)(3)
organization, either the 501(c)(3) organization or the issuer of the Bonds may make the Declaration
with respect to expenditures of the 501(c)(3)organization that are to be reimbursed.
2
010-8268-6252/1/AMERICAS
Resolutions - R7 J
MIAMI BEACH
COMMISSION MEMORANDUM
TO: Honorable Mayor and Members of the City Commission
FROM: Jimmy L. Morales, City Manager
DATE: October 19, 2016
SUBJECT: A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AUTHORIZING DECLARATIONS OF OFFICIAL
INTENT UNDER U.S. TREASURY REGULATIONS WITH RESPECT TO
REIMBURSEMENTS FROM BOND, NOTE AND OTHER OBLIGATION
PROCEEDS OF TEMPORARY ADVANCES MADE FOR PAYMENTS PRIOR TO
ISSUANCE,AND RELATED MATTERS.
RECOMMENDATION
Adopt the Resolution.
ANALYSIS
This Resolution is intended for use under Treasury Regulations §1.150-2 (the "Reimbursement
Regulations") in order that capital and certain other expenditures paid with moneys temporarily
advanced from other funds that are reasonably expected to be reimbursed from proceeds of
subsequently issued notes, bonds or other obligations ("Bonds") may qualify for such
reimbursement. Failure to comply can result in the inability for federal income tax purposes to
treat proceeds of the Bonds used to reimburse the expenditures as spent for arbitrage/rebate
purposes. With certain exceptions for qualified "preliminary expenditures" and certain de
minimis expenditures, a Declaration of Official Intent must be made not later than 60 days after
payment of any expenditure expected to be reimbursed from proceeds of Bonds. Declarations
of Official Intent should not be made systematically for all expenditures or in exaggerated
amounts regardless of actual expectations, but only when it is realistically expected that the
expenditure will be reimbursed from the proceeds of Bonds. In general only capital
expenditures can be reimbursed from the proceeds of Bonds. "Capital expenditures" include
(subject to any more restrictive state law) any costs related to the acquisition or construction of
land or interests in real estate, buildings, structures, additions thereto, or other permanent
improvements, and restoration or betterments made to increase the value of property or
substantially prolong its useful life, and machinery, equipment, furniture and fixtures or other
property having a useful life of at least one year or such longer period as is required by
applicable state law. Costs of issuance of the Bonds are capital expenditures. Certain other
expenditures also qualify for reimbursement. The Regulations do not apply to, and
this Resolution is not needed in connection with, the use of proceeds of Bonds to finance
expenditures paid on or after the date of issuance of the Bonds. This Resolution also generally
is not needed in connection with the issuance of Bonds to refinance external borrowings
Page 1166 of 1614
(taxable or tax-exempt).
An Authorized Officer is authorized to prepare and sign a Declaration of Official Intent in the
form attached to this resolution with respect to the expenditures to which the reimbursement
regulations apply to be made from money temporarily advanced and that is reasonable
expected to be reimbursed from the proceeds of the bonds. The Authorized Officers are
defined in the resolution as the City Manager, the Chief Financial Officer, or in the absence of
both, the Treasury Manager.
CONCLUSION
The Administration recommends that the Mayor and City Commission of the City of Miami
Beach, Florida, adopt the attached resolution authorizing declarations of official intent under U.S.
Treasury Regulations with respect to reimbursements from bond, note and other obligation
proceeds of temporary advances made for payments prior to issuance, and related matters.
KEY INTENDED OUTCOMES SUPPORTED
Ensure Expenditure Trends Are Sustainable Over The Long Term
FINANCIAL INFORMATION
This Resolution does not have any financial impact. It only requires a Declaration of Intent to
reimburse the City from future "bonds" for expenditures made prior to the issuance of those
bonds.
Legislative Tracking
9
Finance
ATTACHMENTS:
Description
❑ Finance - Oct. 2016 Resolution
Page 1167 of 1614
DECLARATION OF OFFICIAL INTENT
For Reimbursement of Expenditures from Bonds/Notes
This is a Declaration of Official Intent under U.S. Treasury Regulations for purposes of Sections
103 and 141 to 150 of the Internal Revenue Code of 1986, as amended (the"Code").
1. The undersigned, on behalf of the City of Miami Beach, Florida(the "City") declares that
the City reasonably expects that the capital and other expenditures described in
paragraph 2 (the "Project") will be reimbursed with the proceeds of"bonds" (as defined
in Section 150 of the Code). The maximum principal amount of bonds expected to be
issued for the Project is $
2. Description of capital and other expenditures to be reimbursed. [Complete either the first
option or the second option but do not use the second option unless the functional
purpose of the fund or account is generally descriptive of the purpose of the
expenditures.]
Expenditures for(insert a general functional description of property,project,program
or purpose):
[OR]
Expenditures initially made from and to be reimbursed to the fund or account entitled
, the general functional purpose
of which fund or account is
•
The undersigned has been authorized by the City to make and sign this Declaration on
behalf of the City.
Date of Declaration: CITY OF MIAMI BEACH,FLORIDA
, 20
By
(Signature)
(Type or print Name and Title)
Caution: This Declaration of Official Intent will not be effective unless the bonds providing
moneys for the reimbursement are issued and the reimbursement for the Project
described above is made (by an allocation on the books and records identifying the
expenditures as in paragraph 2 above) within the applicable period prescribed in the
Treasury, Regulations - generally, 18 months after the later of the date of the
expenditure or the date the Project is placed in service, but in no event later than three
years after the date of the expenditure. .
•
Page 1170 of 1614
010-8268-6252/1/AMERICAS
INSTRUCTION S
for
DECLARATION OF OFFICIAL INTENT
for
Reimbursement From Tax-Exempt Bonds/Notes
PURPOSE
The form to which these instructions pertain is intended for use under Treasury Regulations
§1.150-2 (the "Reimbursement Regulations") in order that capital and certain other expenditures
paid with moneys temporarily advanced from other funds that are reasonably expected to be
reimbursed from proceeds of subsequently issued notes, bonds or other obligations ("Bonds") may
qualify for such reimbursement. Failure to comply can result in the inability for federal income tax
purposes to treat proceeds of the Bonds used to reimburse the expenditures as spent for
arbitrage/rebate purposes. With certain exceptions for qualified "preliminary expenditures" and
certain de minimis expenditures, a Declaration of Official Intent must be made not later than 60
days after payment of any expenditure expected to be reimbursed from proceeds of Bonds.
Declarations of Official Intent should not be made systematically for all expenditures or in
exaggerated amounts regardless of actual expectations,but only when it is realistically expected that
the expenditure will be reimbursed from the proceeds of Bonds. In general only capital
expenditures can be reimbursed from the proceeds of Bonds. "Capital expenditures" include
(subject to any more restrictive state law) any costs related to the acquisition or construction of land
or interests in real estate, buildings, structures, additions thereto, or other permanent improvements,
and restoration or betterments made to increase the value of property or substantially prolong its
useful life, and machinery, equipment, furniture and fixtures or other property having a useful life of
at least one year or such longer period as is required by applicable state law. Costs of issuance of
the Bonds are capital expenditures. Certain other expenditures also qualify for reimbursement. The
Regulations do not apply to, and this form is not needed in connection with, the use of proceeds of
Bonds to finance expenditures paid on or after the date of issuance of the Bonds. This form also
generally is not needed in connection with the issuance of Bonds to refinance external borrowings
(taxable or tax-exempt).
INSTRUCTIONS
These instructions are based on the Reimbursement Regulations currently in effect. The
references are to the particularparagraphs on the form of Declaration of Official Intent.
Paragraph 1. Insert the anticipated maximum principal amount of Bonds expected to be
issued for the Project. The amount should include the maximum principal amount of all Bonds to
be issued for the Project (i.e., Bonds for reimbursement of prior expenditures and Bonds to finance
expenditures to be paid on or after the date of issuance of the Bonds). A Project includes any
property, project, or program (e.g., highway capital improvement program, hospital equipment
acquisition, or school building renovation).
Paragraph 2. The general description of the capital expenditures to be reimbursed may be
set forth in one of two ways -- either by a functional description of the property, project or program
for which the expenditures are made--
Examples -- "highway capital improvement program"; "street and bridge improvements";
"hospital equipment acquisition"; "school buildings renovation";
or by identification of the fund or account from which the money will be advanced to pay the
expenditures that will be reimbursed subsequently from Bonds, and a statement of the general
functional purpose of that fund or account--
Page 1171 of 1614
010-8268-6252/1/AMERICAS
•
Example -- "parks and recreation fund, the general functional purpose of which fund or
account is recreational facility capital improvement program."
The second option concerning identification and description of the fund can be used where the fund
purpose, in effect, describes the generic purpose of the project, property or program, such as a
waterworks improvement for which money is advanced from the water utility capital improvement
fund. If the money is to be advanced from a general purpose fund such as the general fund or a
capital improvements fund that is available for any type of capital improvement, use the first option
by stating the generic function of the project,property or improvement.
501(c) Organizations. If the proceeds of the Bonds will be loaned to a 501(c)(3)
organization, either the 501(c)(3) organization or the issuer of the Bonds may make the Declaration
with respect to expenditures of the 501(c)(3)organization that are to be reimbursed.
•
•
2
Page 1172 of 1614
010-8268-6252/1/AMERICAS