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REQUEST FOR ACTION <br />TO ITEM NUMBER <br />Economic Develo went Authori <br />AGENDA SECTION MEETING DATE PREPARED BY <br />Consent Februa 13, 2012 Tim Simon, Finance Director <br />ITEM DESCRIPTION REVIEWED By <br />Post-Issuance Debt Compliance Policy <br /> REVIEWED BY <br />ACTION REQUESTED <br />The Economic Development Authority is requested to approve the Post-Issuance Debt Compliance <br />Policy <br />BACKGROUND/DISCUSSION <br />All issuers of tax-exempt bonds are required to file Internal Revenue Service (IRS) Form 8038-G (see <br />sample attached). Last September, the IRS added three additional lines (43, 44, and 45 A&B). The most <br />significant change was asking if issuers have written procedures to ensure compliance with the Internal <br />Revenue Code. The IRS expects issuers and beneficiaries of these obligations to adopt and implement a <br />post-issuance debt compliance policy and procedures to safeguard against post-issuance violations. These <br />are procedures the city and Economic Development Authority (EDA) have been doing but is now asked <br />to be in writing. Many governmental entities are currently adopting a policy. <br />The attached policy has been reviewed by Ehlers and our bond attorney. As Finance Director, I will have <br />to maintain a checklist on all the bond issues. The EDA will need to adopt this policy since on occasion <br />the EDA issues bonds and may in the future. The current outstanding EDA bonds are the YMCA <br />referendum bonds. The City Council passed a similar policy on February 6, 2012. <br />The Post-Issuance Debt Compliance Procedures will address the following: <br />1. General post-issuance compliance <br />2. Proper and timely use of bond proceeds and bond-financed property; <br />3. Arbitrage yield restriction and rebate; <br />4. Timely filings and other general requirements, <br />5. Additional undertakings or activities that support points 1 through 4 above; <br />6. Other requirements that become necessary in the future <br />FINANCIAL IMPACT <br />No additional financial impact since all required post-compliance debt procedures will be completed by <br />finance staff. <br />ATTACHMENTS <br />^ Post-Issuance Debt Compliance Policy <br />^ Sample IRS form 8038-G (Information Return for Tax-Exempt Governmental Obligations) <br />PQMfEflE9 'r <br />N:APublic Bodies\City Counci]\Finance\Tim\2012\EDAPosCissuancedebtcompliancepolicy.docx ~~~~ <br />