Agenda - Council - 08/27/1991 - Laserfiche WebLink

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(b) Preliminarv Expenditures - The declaration of official intent for Preliminary expenditures must occur at any time on or before the date the expenditure is paid. Preliminary expenditures are costs such as architectural, engineering, surveying, soil testing, and similar costs incurred prior to construction or acquisition, but not including land acquisition, site preparation, and similar costs incident to commencement of construction. Preliminary expenditures may not exceed 10% of the expected costs, determined as of the earlier of the bond issue date or the construction commencement (or abandonment). 3. Reimbursement period. (a) General Rule. The allocation of bond proceeds to the reimbursement must occur on or after the date of the expenditure and not later than one year after the expenditure was paid or the date the property was placed in service, whichever is later. (b) Abandonment. If a project is abandoned, the reimbursement period requirement does not apply to preliminary expenditures if a reimbursement allocation is made not later than one year after abandonment or three years after the expenditures. (c) Method of Allocation. An allocation of bond proceeds to reimburse a prior expenditure: (i) must be evidenced by an entry on the books or records of the issuer maintained with respect to the bonds, and (ii) must specifically identify the actual prior expenditure, and (iii) must be effective to relieve the allocated proceeds from any restrictions under the relevant legal documents and applicable state law that apply only to unspent proceeds. (d) Reasonableness. (i) Budgetary Financial Circumstances. An official intent must be consistent with budgetary and financial circumstances of the issuer as of the date of official intent. The issue must not reasonably expect or intend to reimburse an expenditure for which funds other than bond proceeds re expected to be allocated or reserved on a long-term basis, aside from bona fide changed circumstances. (ii) Pattern of Failing to Reimburse. The issuer must not have a pattern of failing to reimburse expenditures for which official intent has been deelared. This is an all facts and circumstances test with a safe harbor. Where the issue has reimbursed with proceeds of a borrowing at least 75% of I ! I I I I I I I I I ! I ! I I I I I