University of Virginia Library

APPROVAL OF USE OF AND INTENT TO ISSUE TAX EXEMPT DEBT - ROUSS HALL

(approved by the Finance Committee on April 12, 2007)

WHEREAS, the University seeks to replace gifts with tax-exempt debt as a funding source in the renovation and expansion of Rouss Hall; and

WHEREAS, the United States Department of the Treasury has promulgated final regulations in Section l.l50-2 of the Treasury Regulations governing when the allocation of bond proceeds to reimburse expenditures previously made by a borrower shall be treated as an expenditure of the bond proceeds; and

WHEREAS, the Regulations require a declaration of official intent by a borrower to provide evidence that the borrower intended to reimburse such expenditures with proceeds of its debt; and

WHEREAS, the Board of Visitors of the University of Virginia desires to make such a declaration of official intent as required by the Regulations; and

WHEREAS, the University may be required to provide short-term financing to the project prior to issuing long-term debt in order to implement an efficient and timely construction schedule; and

WHEREAS, the University has funding mechanisms to accommodate short-term financing needs, defined as a period of less than sixty months; and

WHEREAS, the authority for the University to enter into financing arrangements exceeding sixty months in maturity for this project is not included in this resolution; and

WHEREAS, if the University arranges short-term financing for the project, and if the project is not ultimately completed, or if the project utilizes funding sources other than debt, then the school or unit remains responsible for refunding the short-term obligation;

RESOLVED, that the Board of Visitors of the University of Virginia approves the replacement of gift funding with University debt in the Rouss Hall Renovation and Expansion Project;

RESOLVED FURTHER that, pursuant to the terms of the Treasury Regulations, the University of Virginia declares its intent to reimburse expenditures in accordance with the following:

• 1. The University reasonably expects to reimburse expenditures from the issuance of tax-exempt debt to be issued by the University incurred for the project;


• 2. This resolution is a declaration of official intent under Section 1.150-2 of the Regulations;


• 3. The maximum principal amount of debt expected to be issued for the purpose of reimbursing expenditures relating to the Renovation and Expansion of Rouss Hall is $11,845,000 (total of all requests = $55,245,000);

RESOLVED FURTHER, funds may be borrowed for the project on a short-term basis, but only if the following conditions are met:

• 1. The Board of Visitors approves the current resolution;


• 2. A comprehensive and detailed financial plan for the school project is submitted;


• 3. Short-term financing shall not exceed sixty months in maturity; and


• 4. The school remains responsible for any debt obligation incurred regardless of the status of the capital project or whether or not a debt issuance actually occurs.