Minutes 04/27/1999 (2) - Laserfiche WebLink

Home Browse Search

TUESDAY, APRIL 27, 1999 4. Based upon the City Cotmeil's reasonable expectation expressed above that not more than $10,000,000 in bonds, notes, leases and other tax-exempt obligations will be issued in calendar year 1999 by it or its subordinate entities, with the applicable exceptions set forth above, and will not designate (excluding any bonds deemed designated pursuant to the pro-visions of Section 265(b)(3)(C)(ii) or Section 265(b)(3)(C)(iii) of the Code), or permit the designation by any of its subordinate entities of, any of its notes and bonds (or those of its subordinate entities) during the calendar year 1999 which would cause the $10,000,000 limitation of Section 265(b)(3)(D) of the Code to be violated, the City Council hereby designates the Lease Agreement as a "qualified tax-exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. 5. The City Council covenants that the City shall not take or omit to take any action the taking or omission of which will cause the Lease Obligations to be "arbitrage bonds" within the meaning of Section 148 of the Code, or otherwise cause interest on the Lease Obligations derived from the interest component of rental payments made by the City Council under the Lease Agreement to be includable in the gross income for Federal income tax purposes of the registered owners thereof under existing law. Without limiting the generality of the foregoing, the City shall comply with any provision of law that may require the City at any time to rebate to the United States any part of the earnings derived from the investment of the gross proceeds of the Lease Obligations. The City Council intends for the Lease Obligations to be treated as complying with the provisions of Section 148(f)(4)(D) of the Code and represents the following for such purposes: (i) the City is a governmental unit with general taxing powers, (ii) no "bond" which is part of the issue of the Lease Obligations is a private activity bond, (iii) 95% or more of the net proceeds of such issue are to be used for local governmental activities of the issuer within the jurisdiction of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the issuer), (iv) the aggregate face amount of all tax-exempt bonds (other than private activity bonds and bonds deemed designated pursuant to the provisions of Section 148(f)(4)(DX iii) and (iv) of the Code) issued by the City during the calendar year 1999 (and notes and bonds issued by any subordinate entity of the City) is not reasonably expected to exceed $5,000,000, except that, pursuant to the provisions of Section 148(f)(4)(D)(vii) of the Code, this amount of $5,000,000 is increased by the lesser of $5,000,000 or so much of the aggregate face amount of all the tax- exempt bonds (other than private activity bonds) issued by the City during the calendar year 1999 (and notes and bonds issued by any subordinate entity of the City) attributable to financing the construction (within the meaning of Section 148(f)(4)(C) of the Code) of public school facilities. 6. The City Council covenants that the City shall not permit the proceeds of the Lease Obligations to be used in any manner that would result in (a) 10% or more of such proceeds being used in a trade or business carried on by any person other than a governmental unit, as provided in Section 141 (b) of the Code, provided that no more than 5% of such proceeds may be used in a trade or business unrelated to the City's use of the Equipment, Co) 5% or more of such proceeds being used with respect to any "output facility" (other than a facility for the furnishing of water), within the meaning of Section 141 (b)(4) of the Code, or (c) 5% or more of such proceeds being used directly or indirectly to make or finance loans to any persons other than a governmental unit, as provided in Section 141 (c) of the Code; provided, however, that if the City receives an opinion of nationally recognized bond counsel that any such covenants need not be complied with to prevent the interest on the Lease Obligations from being includable in the gross income for Federal income tax purposes of the registered owner thereof under existing law, the City need not comply with such covenants. 7. The City has paid and will pay certain expenditures (the "Expenditures") in connection with the purchase and installation of the Equipment and has determines that it is necessary to reimburse the City for the Expenditures from the proceeds of the Lease Obligations. The City Council hereby declares its intent to reimburse the City with the proceeds of the Lease Obligations for the Expenditures with respect to the Equipment made on and after February 27, 1999, which date is no more than 60 days prior to the date hereof.