HomeMy WebLinkAbout6.i. Inducement Resolution for Industrial Revenue Bond - Cannon Equipment CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: May 7, 1996
AGENDA ITEM: Inducement Resolution for Industrial AGENDA SECTION:
Revenue Bond -- Cannon Equipment New Business
PREPARED BY: —AGENDA NO.
Dan Rogness, Community Development Director ITEM Tl./�,
ATTACHMENTS: Resolution APPROVED BY:
Cannon Equipment has requested that the City of Rosemount consider utilizing
Industrial Revenue Bonds as a permanent source of financing their proposed new
building in the business park. The next statewide allocation is January of 1997,
but existing financing (private lender, equity, etc.) can be replaced by this type of
financing.
This "inducement" resolution is no formal approval of such financing; it essentially
starts the time clock for expenditures to be eligible for this financing, and further
sets the stage for its use at a later time. In most cases, all legal/closing costs are
ultimately paid by the business, and the risk is void of the city due to the bonding's
"revenue" status (versus general obligation).
RECOMMENDED ACTION:
MOTION to approve the RESOLUTION DECLARING
THE OFFICIAL INTENT OF THE CITY OF ROSEMOUNT TO REIMBURSE CERTAIN
EXPENDITURES FROM THE PROCEEDS OF BONDS TO BE ISSUED BY THE CITY
COUNCIL ACTION:
THE CITY OF ROSEMOUNT, MINNESOTA
RESOLUTION 1996-
DECLARING THE OFFICIAL INTENT OF THE CITY OF ROSEMOUNT
TO REIMBURSE CERTAIN EXPENDITURES FROM THE PROCEEDS
OF BONDS TO BE ISSUED BY THE CITY
WHEREAS, the Internal Revenue Service has issued Tres. Reg. 1.150-2
providing that proceeds of tax-exempt bonds used to reimburse prior expenditures will
not be deemed spent unless certain requirements are met; and
WHEREAS,S t he City or a conduit borrow er expects ect
s to incur certain expenditures
which may be financed temporarily from sources other than bonds, and reimbursed
from the proceeds of a bond;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF ROSEMOUNT (THE "CITY") AS FOLLOWS:
1. The City or a conduit borrower reasonably intends to make expenditures
for the project described in Exhibit A (the "Project"), and reasonably intends to
reimburse itself for such expenditures from the proceeds of debt to be issued by the
City in the maximum principal amount described in Exhibit A.
2. The Mayor is authorized to designate appropriate additions to Exhibit A in
circumstances where time is of the essence, and any such designation shall be
reported to the City Council at the earliest practicable date and shall be filed with the
official books and records of the City as provided in Section 3.
3. This resolution is intended to constitute a declaration of official intent for
purposes of Tres. Reg. 1.150-2 and any successor law, regulation, or ruling.
Approved by the City Council of the City of Rosemount this 7th day of May, 1996.
CITY OF ROSEMOUNT
Cathy Busho, Mayor
Attest:
Susan M. Walsh, City Clerk
Motion by: Seconded by:
Voted in favor:
Voted against:
Members Absent:
EXHIBIT A
TO OFFICIAL INTENT RESOLUTION
ADOPTED MAY 7, 1996
Maximum Principal
Amount of Debt
Date of Declaration Description of Project for Project
May 7, 1996 Cannon Equipment Company, $4,500,000
Manufacturing Facility