This resolution will, by City Council action, allow the the city of Hermiston to reimburse itself for capital expenditures incurred prior to the issuance of municipal bonds for the purpose of (1) improvements to, and renovations of, the City Library to accommodate temporary offices for City employees and allow for future growth of the Library and (2) a new City Hall (collectively, the “Project”.) 

This resolution declares an issuer's official intent to reimburse an original expenditure with proceeds of an obligation.

Under federal tax laws, an issuer (the City) may reimburse itself with proceeds of tax-exempt bonds for certain expenditures made up to 60 days prior to the date of the resolution.

The expenditure requirements are as follows:

Capital Expenditure - The project financed must consist of capital expenditures and issuance costs.

Intent: - The resolution is evidence of the organization’s intent to reimburse itself for expenditures made prior to financing.

Reimbursement Period: The reimbursement must take place within 18 months after the project is “placed in service,” and in no event later than 3 years from the date of expenditure for which the issuer/borrower seeks reimbursement.

This resolution does not obligate the organization to anything or anyone. In essence, it says that if the organization completes the project and finances it with tax-exempt debt, that it is the organization’s intent to reimburse itself for appropriate expenses under IRS and Treasury rules.

An organization (the City) that passes a reimbursement resolution has the option, but not the obligation, to reimburse itself. An organization that does not pass a reimbursement resolution foregoes, with few exceptions, the option to reimburse itself.

1.  Approve Resolution No. 2144

2.  Table Resolution No. 2144 with recommendations to staff

3.  Deny Resolution No. 2144 with recommendations to staff

Approve Resolution No. 2144