Agenda - Council - 07/26/2011 - Laserfiche WebLink

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Related Considerations: • Bank Qualified - because total tax - exempt debt issued by the. City in calendar year 2011 is expected to be less than $10.0M, the Bonds will be designated as "bank qualified" obligations pursuant to Federal Tax Law. The impact of this designation may result in slightly lower interest rates since banking institutions will be interested in purchasing the Bonds. We have adjusted the estimated interest rates accordingly. • Arbitrage Compliance — o Project / Construction Fund — All tax exempt issues are subject to federal rebate requirements which require all arbitrage earned to be rebated to the U.S. Treasury. A rebate exemption the City expects to qualify for is the "small issuer exemption" because the City expects to issue less than $5.0M of tax exempt bonds in calendar year. Debt Service Fund — The City must maintain a bona fide debt service fund for the certificates or be subject to yield restriction in the debt service fund. A bona fide debt service fund involves an equal matching of revenues to debt service expense with a balance forward permitted equal to the greater of the investment earnings in the fund during that year or 1/12 of the debt service of that year. The City should become familiar with the various Arbitrage Compliance requirements for this bond issue. The Resolution explains the requirements in greater detail. We are also available to assist the City in meeting these requirements. • Book Entry - The Bonds will be global book entry with a bank designated as the paying agent. As "paperless" certificates, you will avoid the cost of bond printing and annual registrar charges. The Paying Agent will invoice you for the interest semiannually and on an annual basis for the principal coming due. You will be charged only for paying agent /transfer agent services provided by the bank. This cost of services has been capitalized into the bond issue. • Continuing Disclosure - Because the City's outstanding debt exceeds $10.0M, it is subject to the Securities and Exchange Commission's continuing disclosure requirements. Northland Securities is prepared to assist the City in this capacity. a �* N4 \v�\o\vaaavu a\�. �,a cw .a.�vv aavvav�csaa :aaa.�x��u�:.a\�voc s\a o\cu.�.a ma aaa NORTHLAND Page 5 SECURITIES