The District expects to finance the acquisition and construction of Employee Housing (the “Project”).  The District will advance funds on the knowledge that it can be reimbursed for amounts expended on the Project from the subsequent sale of bonds or lease financing in order to finance the Project (the “Obligations”).  The Internal Revenue Code has certain requirements that need to be satisfied in order for a school district to reimburse itself for costs incurred for capital projects in advance of the sale of tax-exempt Obligations.  In order to qualify for reimbursement of such costs from the proceeds of the execution and delivery of the Obligations, the Board must adopt a resolution which satisfies all of the requirements of the Internal Revenue Code within 60 days of the date on which the expenditures are been made.

The District’s bond counsel has prepared the attached resolution which complies with applicable requirements of the Internal Revenue Code and allows the District to reimburse itself for any advanced Project costs from the proceeds of the sale of the Obligations.  The adoption of this resolution does not obligate the District to ever advance its own funds toward the Project.  The adoption of this resolution preserves the option for the Board to decide at a subsequent date whether or not it would be in the best interests of the District to allocate a portion of any proceeds of the sale of the Obligations towards the reimbursement of the monies the District might spend on the Project.

There is a reference in this resolution to $30,000,000.00 as the reasonably expected maximum principal amount of the Obligations.  The Internal Revenue Code obligates this resolution to include an estimated size of the borrowing from which the reimbursement will occur.  The District is not required to maintain this $30,000,000.00 amount.  It is included to satisfy a legal requirement and constitutes only a rough estimate of the likely size of the Obligations that the Board may consider.  If the Board were to sell a smaller borrowing, such decision would not adversely affect its ability to use a portion of the proceeds of the Obligations to reimburse the District for these costs.