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HomeMy WebLinkAboutResolution_33-12_12/10/2012 RESOLUTION NO. 33-12 A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, FLORIDA, TO ADOPT WRITTEN POLICIES AND PROCEDURES (SEE EXHIBIT A) TO MONITOR THE REQUIREMENTS OF SECTION 148 OF THE INTERNAL REVENUE CODE AND TO ENSURE THAT ALL NONQUALIFIED BONDS OF THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, FLORIDA ARE REMEDIATED ACCORDING TO THE REQUIREMENTS UNDER THE INTERNAL REVENUE CODE AND REGULATIONS; PROVIDING FOR SEVERABILITY; PROVIDING AN EFFECTIVE DATE; AND FOR OTHER PURPOSES. WHEREAS, the Village Council of the Village of Tequesta, Florida (the "Issuer ") has previously issued certain bonds the interest on which is excluded from the gross income of the holders thereof for federal income tax purposes (the "Tax- Exempt Bonds "); and WHEREAS, the Issuer has previously covenanted with the holders of such Tax- Exempt Bonds that it will comply with all provisions of the Code (as hereinafter defined) necessary to maintain the exclusion from gross income of interest on such Tax- Exempt Bonds for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code; and WHEREAS, the Issuer has provided certificates or entered into written tax agreements upon the issuance of each series of Tax- Exempt Bonds and has now determined it to be in its best interest to adopt general written policies attached hereto to monitor the requirements of Section 148 of the Code and to ensure that all nonqualified bonds are remediated according to the requirements under the code (the "Policies and Procedures "). NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS: Section 1 Authori , for this Resolution This Resolution is adopted pursuant to the Constitution of the State of Florida and other applicable provisions of law (collectively, the "Act "). Section 2 Approval of Written Policies and Procedures The Policies (Exhibit A) attached hereto are hereby incorporated into this section as if expressly set forth herein. The Issuer hereby covenants that unless it shall receive an opinion of Bond Counsel to the effect that failure to so comply with such policies shall not adversely affect the exclusion from gross income of interest on the applicable Tax- Exempt Bonds, it shall comply with the Policies to the extent necessary to maintain the exclusion from gross income of interest on the Tax- Exempt Bonds for purposes of federal income taxation, including, in particular, the payment of any amount required to be rebated to the U.S. Treasury pursuant to the Code. Section 3 Applicable Provisions of Law. This Resolution shall be governed by and construed in accordance with the laws of the State of Florida. Section 4 Effective Date This Resolution shall take effect immediately upon its adoption. 2 EXHIBIT A VILLAGE OF TEQUESTA, FLORIDA Policies and Procedures Federal Tax Compliance — Tax- Exempt Debt Obligations PURPOSE In order to issue tax- exempt debt obligations ("Tax- Exempt Obligations'), the interest on which is excluded from gross income of the holders of such debt obligations, the Village of Tequesta, Florida (the "Village"), must comply with federal tax rules regarding expenditure of proceeds, use of financed property, investment of proceeds in compliance with arbitrage rules, retention of records and filings with the Internal Revenue Service pursuant to Section 148 of the Internal Revenue Code of 1986, as amended (the "Code "). This Tax Compliance Policy sets forth the Village's policies for compliance with Sections 141 -150 of the Code and related rules and regulations. I. Expenditure of Proceeds • Establish forms and procedures for documenting expenditures of the proceeds, including for new money issues, a description of the property financed with each expenditure and for refunding issues a description of the refunded obligations and the property financed with the refunded obligations. • Only permit proceeds to be expended for capital expenditures, working capital if accompanied by an opinion of bond counsel, refunding of Tax Exempt Obligations and other debt obligations used for the foregoing purposes, and Costs of Issuance of Tax - Exempt Obligations. • Not permit amounts to be expended to pay capitalized interest on Tax- Exempt Obligations except during the actual construction period of financed property unless accompanied by an opinion of bond counsel. • Restrict reimbursement of costs that were paid prior to the issuance of the Tax- Exempt Obligations to costs paid subsequent to, or not more than 60 days prior to, the date a "declaration of intent" to reimburse the costs was adopted by the Village or as is otherwise approved by bond counsel. • Prepare a "final allocation" of proceeds to uses, which will be made and retained with the records of the Tax- Exempt Obligations, not later than 18 months after the placed -in- service date of the financed property (and in any event not later than 5 years and 60 days after the issuance of the issue). • Monitor the expenditure of proceeds of new -money Tax Exempt Obligations against the tax certificate expectation to (i) spend or commit 5% of net sale proceeds within 3 6months, (ii) spend 85% of net sale proceeds within 3 years, and (iii) proceed with due diligence to complete the project and fully spend the net sale proceeds. • Monitor the expenditure of proceeds of the Tax - Exempt Obligations against the schedule for any arbitrage rebate exception or exceptions identified in the tax certificate related to such issue of Tax- Exempt Obligations. II. Use of Property Financed with Tax- Exempt Obligations Use of property financed with Tax- Exempt Obligations, when completed and placed in service, will be reviewed by the Village Manager, the Finance Director or the Village Clerk on at least an annual basis. The Village will not do any of the following with respect to the financed property without prior discussion with bond counsel regarding potential effect of such action on the tax exemption of the Tax- Exempt Obligations that financed or refinanced such property: • Enter into a management, service or incentive payment contract with any non- governmental person or entity (including the federal government) (a "Non- Governmental Person "). • Enter into a lease with any Non - Governmental Person. • Sell or otherwise transfer such property to any Non - Governmental Person. • Grant special legal entitlements with respect to such property to any Non - Governmental Person. If any action occurs, notwithstanding the foregoing, that causes Tax- Exempt Obligations to become private activity bonds as a result of private use of financed projects and/or private payments for parties utilizing financed projects, the Village will promptly consult with bond counsel as to the steps to be taken in order to remediate such change in use in accordance with the regulations under the Code, including the remediation of nonqualified bonds. III. Investment of Proceeds Investment of proceeds of Tax- Exempt Obligations in compliance with the arbitrage bond rules and rebate of arbitrage will be supervised by the Village Manager and the Finance Director. All proceeds of each Tax- Exempt Obligation will be deposited and maintained in a separate account or accounts. The investment of the proceeds of Tax- Exempt Obligations shall comply with the following: • Investments will be purchased only in market transactions at fair market value. • Calculations of rebate liability will be performed periodically as set forth in the tax certificate by outside consultants unless the Village is eligible for an exception to rebate liability with respect to the Tax- Exempt Obligations. 4 • Rebate payments, if required, will be made with a Form 8038 -T no later than 60 days after (a) each fifth anniversary of the date of issuance and (b) the final retirement of the Tax- Exempt Obligations. Compliance with rebate requirements will be reported to the bond trustee, if any. • The Village will identify the date for the first rebate payment at the time of issuance if rebate payments are expected. IV. Records • Records will be retained for the life of the Tax- Exempt Obligations plus and refunding bonds plus three years. Records may be in the form of documents of electronic copies of documents, appropriately indexed to specific bond issues and compliance functions. • Retainable records pertaining to the issuance of Tax - Exempt Obligations include the transcript of documents executed in connection with the issuance of the Tax- Exempt Obligations and any amendments, and copies of rebate calculations and records of payment including form 8038 -T. • Retainable records pertaining to expenditures of proceeds of Tax- Exempt Obligations include requisitions, trustee statements (if any) and final allocation of proceeds. • Retainable records pertaining to use of property include all agreements reviewed for nonexempt use and any reviewed documents relating to unrelated business activity. • Retainable records pertaining to investments include guaranteed investment contract and hedge documents under the Treasury regulations, records of purchase and sale of other investments, and records of investment activity sufficient to permit calculation of arbitrage rebate or demonstration that no rebate is due. V. Miscellaneous Post -Issuance Changes The Village Manager or Finance Director will consult with bond counsel prior to engaging in any post - issuance credit enhancement transactions (e.g., letter of credit or bond insurance) or hedging transactions (e.g., interest rate swaps). The Village Manager or Finance Director will consult with bond counsel prior to the making of any significant modifications to the bond documents that might cause a "reissuance" of the Tax - Exempt Obligations as described in the Section 11001 -3 of the Treasury regulations such as (i) changes in the yield of a Tax- Exempt Obligation, (ii) changes in the timing of payments on a Tax- Exempt Obligation or (iii) changes in the obligor of or security for a Tax- Exempt Obligation. VI. Overall Responsibility Overall administration and coordination of this policy is the responsibility of the Village Manager. The Village Manager or the Finance Director will identify any violations of federal tax requirements relating to any Tax- Exempt Obligations and consult with bond counsel as to the best method for the timely correction of any identified violations either through available 5 remedial actions or through the IRS's Voluntary Closing Agreement Program. The Village Manager is responsible for obtaining and providing for the training and education necessary to administer these policies and procedures. 6 The foregoing Resolution was offered by Council Member Okun who moved its adoption. The motion was seconded by Council Member D'Ambra and upon being put to a vote, the vote was as follows: For Adoption Against Adoption Mayor Tom Paterno X Vice -Mayor Vince Arena X Council Member Abby Brennan Absent Council Member Frank D'Ambra X Council Member Steve Okun X The Mayor thereupon declared the Resolution duly passed and adopted this 10 day of December, 2012. MAYOR OF TEQUESTA Tom Paterno ATTEST: Lori McWilliams, MMC = /N� F 9 � pm 9p � m '�= Village Clerk " =_-A l ed !J9 FL 7