R-07-10-11-13A1 - 10/11/2007 RESOLUTION NO. R-07-10-11-13A 1
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,
1.
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 $750, 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 the Issuer in
furtherance of this Resolution after a date which is later than 18
months after the later of (1) the date the expenditures are paid or (2)
the date on which the property, with respect to which such expenditures
were made, is placed in service.
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III.
The foregoing notwithstanding, no tax-exempt obligation will be
issued pursuant to this Resolution more than three years after the date
any expenditure which is to be reimbursed is paid.
IV.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 11th day of October,17
N
P11, Mayor
AT
City of Round Rock, Texas
E T:
CHRISTINE R. MARTINEZ, City Secr ary
2 .
DATE: October 4, 2007
SUBJECT: City Council Meeting - October 11, 2007
ITEM: *13A1. Consider a resolution expressing official intent to reimburse
cost of acquiring certain vehicles and equipment. or
Department: Finance Department
Staff Person: Cindy Demers, Finance Director
Justification:
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
$750,000.
Funding:
Cost: $750,000
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
Background Information•
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.
Public Comment: N/A