R-02-10-24-11F1 - 10/18/2002■
RESOLUTION NO. R- 02- 10- 24 -11F1
WHEREAS, the City of Round Rock, Texas (the "Issuer ") is a
home -rule City of the State of Texas, and
WHEREAS,the Issuer expects to pay expenditures in connection
with acquiring certain vehicles and equipment (the "Property ")
prior to the issuance of obligations to finance the Property, and
WHEREAS, the Issuer finds, considers, and declares that the
reimbursement of the Issuer for the payment of such expenditures
will be appropriate and consistent with the lawful objectives of
the Issuer and, as such, chooses to declare its intention, in
accordance with the provisions of Section 1.150 -2 of the Treasury
Regulations, to reimburse itself for such payments at such time as
it issues obligations to finance the Property, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
That the Issuer reasonably expects to incur debt, as one or
more separate series of various types of obligations, with an
aggregate maximum principal amount equal to $600,000 for the
purpose of paying the costs of the Property.
II.
That all costs to be reimbursed pursuant hereto will be
capital expenditures. No tax - exempt obligations will be issued by
■:0OMM \WORL00% \O. \M00% \ROSOLUTI \R21024P1.MPO /sc
DATE: October 18, 2002
SUBJECT: City Council Meeting — October 24, 2002
ITEM: * 11.F.1. Consider a resolution expressing official intent to reimburse cost of
acquiring certain vehicles and equipment.
Resource: David Kautz, Chief Financial Officer
Bill White, Finance Director
History:
In accordance with the operating budget, certain equipment is acquired
with cash and subsequently financed for three years through a tax -
exempt leasing arrangement. Because of the tax- exempt nature of the
financing, Internal Revenue Service regulations require the City to
state its intentions before the transactions are completed. This type of
financing allows the City to acquire new equipment and replace
equipment and rolling stock in a timely manner as replacement criteria
are met. For the current fiscal year, the equipment to be financed is
scheduled at $600,000.
Funding:
Cost: Outlined in the attachment.
Source of Funds: Payment of principal and interest for the three -year amortization of
this obligation is funded from the debt service portion of the property
tax.
Outside Resources: N/A
Impact/Benefit:
Public Comment: N/A
Sponsor: Finance Department
With a three -year payback, the impact on any one operating budget is
minimized. Additionally, the tax- exempt lease rates offer a very
favorable cost of capital to the City. This program permits scheduled
replacement of worn equipment on a revolving basis.