8.1. SR 06-16-2014 - Laserfiche WebLink

Home Browse Search

POST ISSUANCE The issuance of these bonds will result in post-issuance compliance responsibilities. The COMPLIANCE: responsibilities are in two primary areas: i)compliance with federal arbitrage requirements and ii)compliance with secondary disclosure requirements. Federal arbitrage requirements include a wide range of implications that have been taken into account as your issue has been structured. Post-issuance compliance responsibilities for your tax-exempt issue include both rebate and yield restriction provisions of the IRS Code. In general terms the arbitrage requirements control the earnings on unexpended bond proceeds, including investment earnings, moneys held for debt service payments (which are considered to be proceeds under the IRS regulations), and/or reserves. The arbitrage rules provide an exception from rebate provisions for gross proceeds that are spent within an 18-month period in accordance with certain spending criteria. The City expects to meet the 18-month spending exception and gross proceeds that meet the test will qualify for an exception to rebate. Yield restriction provisions will apply to the debt service fund and any project proceeds unspent after three years under certain conditions and the funds should be monitored throughout the life of the issue. Secondary disclosure requirements result from an SEC requirement that underwriters provide ongoing disclosure information to investors. To meet this requirement, any prospective underwriter will require the City to commit to providing the information needed to comply under a continuing disclosure agreement. Springsted currently provides arbitrage and continuing disclosure compliance services to the City under separate contracts. Contract amendments adding this issue will be provided to City staff. SUPPLEMENTAL Supplementary information will be available to staff including detailed terms and conditions INFORMATION AND of sale, comprehensive structuring schedules and information to assist in meeting post- BOND RECORD: issuance compliance responsibilities. Upon completion of the financing, a bond record will be provided that contains pertinent documents and final debt service calculations for the transaction. PURPOSE: Proceeds of the Bonds will be used, together with other sources of funding, to finance a waste water facility improvement project. The other funding sources include: (i) Sewer Utility funds and Trunk Utility funds totaling $4,000,000; (ii) a state grant in the amount of$2,800,000; and (iii) additional future borrowing necessary to provide approximately $1,237,050 of net proceeds. The total cost of the project is currently estimated at$17,857,050. The City is issuing the federal maximum permitted amount of$10 million per calendar year for the Bonds and deferring the issuance of additional debt at this time in order to take advantage of the benefit of designating the current Bonds as bank qualified obligations. In the current market there is an interest rate advantage to issuing tax exempt debt as bank qualified. There will also be an opportunity for the future debt for the project to be issued as bank qualified obligations. AUTHORITY: Statutory Authority: The Bonds are being issued pursuant to Minnesota Statutes, Chapters 444 and 475. Statutory Requirements: Pursuant to Minnesota Statutes, Chapter 444 and the resolution awarding the Bonds, the City will covenant to maintain rates in an amount sufficient to Springsted Page