5.9. SR 09-13-1999 - Laserfiche WebLink

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. . . City of Elk River September 9, 1999 (c) Bona Fide Debt Service Fund (d) Economic Life 10. Continuing Disclosure 11. Attachments The City must maintain a bona fide debt service fund for the Bonds or be subject to yield restriction. This requires restricting the investments held in the debt service fund to the yield on the bonds and/or paying back excess investment earnings in the debt service fund to the federal government. A bona fide debt service fund is a fund for which there is an equal matching of revenue to debt service expense, with carry over permitted equal to the greater of the investment earnings in the fund during that year or 1/12 the debt service of that year. As described in the introductory paragraph to these recommendations, using the excess cash accumulated in the debt service fund to refund the Series 1994A Bonds will provide for a better matching if annual special assessment collections to annual debt service payments in the future. This, in turn, will enable the City to better maintain a bona fide debt service fund. The average life of the Bonds cannot exceed 120% of the remaining economic life of the projects originally financed by the Series 1994A Bonds. The economic life of the improvements is 20 years. The time that has elapsed from the dated date on the Series 1994A Bonds is 5.42 years, and the average life of this issue is 6.87 years, for a total of 12.29 years; therefore this refunding issue is within the economic life requirements. This issue is subject to the SEC continuing disclosure requirements. However, since the principal amount of the Bonds is under $1,000,000, the City is exempt from complying with these regulations. . Refunding Schedules . Terms of Proposal Page 3