In many cases when the City of Billings intends to issue bonds, it incurs expenses for engineering, financial, legal and other services before the bonds are issued.  Internal Revenue Service rules prevent cities from using bond proceeds to reimburse themselves for these expenses unless the issuer adopts a Reimbursement Resolution early in project development.  This resolution allows the City of Billings to use bond proceeds to reimburse itself for the One Big Sky Center (OBSC) project development expenses.  The reimbursement will occur only if the City issues the bonds. 

The City Council may:

• approve the resolution, or
• disapprove the resolution. 

Disapproving it will prevent the City from reimbursing itself for out-of-pocket expenses if the City issues TIF or other bonds to help support the OBSC project. 

Adopting the resolution creates no direct financial impact on the City.  It would allow the City to recover expenses that it incurs prior to issuing OBSC project bonds. 

Staff recommends that the City Council approve a reimbursement resolution for the OBSC project.