Res 83RESOLUTION NO. 83
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF POWAY, CALIFORNIA
EXPRESSING OPPOSITION TO INTERNAL REVENUE SERVICE
RULING 80-55
WHEREAS, the Internal Revenue Service ruling 80-55 will not allow
banks which use Tax Exempt Municipal Securities as collateral for public
deposits to charge as a business expense the interest that the Banks pay
to local agencies who invest in such deposits; and
WHEREAS, this procedure would reduce the demand for Tax Exempt
Municipal Bonds as collateral for public deposits, increase borrowing cost
for municipalities, force municipalities to withdraw local funds from
local institutions because of uncompetitive interest rates, and threaten
a municipality's ability to provide basic public services;
NOW THEREFORE, BE IT RESOLVED:
1. That the City Council strongly objects to the implementation of
Internal Revenue Service Ruling 80-55; and
2. That the City Clerk be directed to forward copies to:
(a)
Internal Revenue Service
Assistant Commissioner Gerald Portney
1111 Constitution Avenue, N.W., Room 3042
Washington, D.C. 20224
(b) U.S. Senators Alan Cranston and S.I. Hayakawa
and Congressman Clair Burgener
APPROVED AND ADOPTED by the City Council of the City of
Poway, California at a regular meeting thereof this 10th day of March,
1981.
Clyd~ E. Rexrode, Mayor
ATTEST:
Marjorie K~ Wahlsten, City Clerk