HomeMy WebLinkAboutOrd 2014-03 RESOLUTION NO. 2014-03
A RESOLUTION OF THE MAYOR AND COUNCIL OF THE TOWN OF
FOUNTAIN HILLS, ARIZONA, ADOPTING ISSUANCE AND POST-
ISSUANCE COMPLIANCE PROCEDURES RELATING TO TAX-EXEMPT
BONDS, TAX CREDIT BONDS AND OTHER TAX-EXEMPT FINANCINGS
FOR THE TOWN OF FOUNTAIN HILLS,ARIZONA.
WHEREAS, the Town of Fountain Hills, Arizona (the ``Town") has issued tax-exempt
bonds and other tax-exempt financings and may issue additional types of bonds in the future
(collectively the"Bonds"); and
WHEREAS, federal tax law encourages the Town to develop issuance and post-issuance
compliance procedures related to the Bonds;and
WHEREAS, the Town desires to adopt written issuance and post-issuance compliance
procedures related to the Bonds;
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF
THE TOWN OF FOUNTAIN HILLS as follows:
SECTION 1. The recitals above are hereby incorporated as if fully set forth herein.
SECTION 2. The Town hereby adopts the Issuance and Post-Issuance Compliance
Procedures Relating to Tax-Exempt Bonds, Tax Credit Bonds and Other Tax-Exempt Financings
for the Town of Fountain Hills, Arizona, attached hereto as Exhibit A and incorporated herein by
reference.
SECTION 3. The Mayor, the Town Manager, the Town Finance Director, the Town
Clerk and the Town Attorney are hereby authorized and directed to take all steps necessary to
carry out the purpose and intent of this Resolution.
PASSED AND ADOPTED by the Mayor and Council of the Town of Fountain Hills,
March 20,2014.
FOR THE TOWN OF FOUNTAIN HILLS: ATTESTED TO:
lnda M. Kavan , Mayor Bevelyn J. Be er,T n Clerk
REVIEWED BY: APP VED AS TO FORM:
.14.A4ciktA). 43ue.(244Ao.
Kenneth W. Buchanan,Town Manager Andrew J. McGuire, Town Attorney
2086811.4
EXHIBIT A
TO
RESOLUTION NO.2014-03
[Issuance and Post-Issuance Compliance Procedures Relating to Tax-Exempt Bonds,Tax Credit
Bonds and Other Tax-Exempt Financings for the Town of Fountain Hills, Arizona]
See following pages.
2086811.4 `�I
I
Cur URE
ISSUANCE AND POST-ISSUANCE COMPLIANCE PRO BONDS S
RELATING TO TAX-EXEMPT
S TAX CREDIT FINANCINGS
AND OTHER TAX-EXEMPT
FOR THE TOWN OF FOUNTAIN HILLS,ARIZONA
Date of Implementation: March 20,2014
1, INTRODUCTION lied with to permit and
Many conditions, restrictions and requirements must be subs'dy treatment of general obligation
preserve the tax-exempt, tax credit or direct federalthe Town
bonds, revenue bonds, lease-purchase agreements, and other tax-exempt financings by
Arizona (the "Town"). Prior to issuance, the Town and its bond counsel will
of Fountain Hills, issueI with these
review the facts and the reasonable expectations to determine if the There arel certain actions the
conditions, restrictions and requirements at the time of issuance.
Town must perform
after issuance to preserve the favorable tax treatment and certain aaNii n mu
of
n
the
st
Town after issuance can adversely affect the tax treatment. benefits n additi Y be critical to the
�,. maintain proper records to demonstrate compliance. Because tax
investors' decision to purchase the bonds or other obligations,
the Town will covenant with the
bond purchasers to comply with all of the conditions, restrictions and requirements throughout
the life of the bonds. the Finance Director, with
To ensure compliance, the Town identifies a single person,
e res onsibility. The Finance Director will be the responsible person and is
overall compliant p with any questions
referred to in these procedures as the "Bond Compliance Official." Anyone
nds the proceeds of the bonds, the facilities financed with the bonds or colme l ancd
about the bo > discuss with the conditions, restrictions and requirements should with bondhcounsel. The Bond
y, discuss them
Compliance Official shall meet with bond counsel
Official who shall, as necessarnsel to discuss these requirements and from time to
with these
time any changes in these requirements. In the event the Town fails
to soon as witprah these
procedures, the Bond Compliance Official shall meet with bond counsel so correct the
after the discovery of the failure to comply in order to discuss the steps required
noncompliance.
1615748.6
The Bond Compliance Official shall ensure that his or
�• Has a co her successor:
py of these issuance and post-issuance compliance proced
ii• Understands the Bond Compliance Official's responsibilities uthe
res;
and post-issuance compliance procedures;and under these issuance
iii. Understands the Town's existing continuing disclosure
(see Section 7, EMMA Reminder, below). If the Bond Com Tian undertaking obligations
of the Town's currently operative continuing disclosure underaakce Official does not have each
bond counsel. mgs, he or she should contact
1. INVESTMENT OF PROCEEDS UNTIL EXPENDED.
Detailed records of investments and earnings will be made and kept
with respect to all bond and investment proceeds.
p by the Town
(See Section 5, Record Retention, below.)
Generally, proceeds of bonds cannot be invested at a yield higher
yield unless during certain specific temporary periods. Therefore, g r than the bond
Compliance Official will determine with bond counsel which funds prior to closing, li y Bond
temporary period. nds do or do not qualify for a
Qualifying information will be set out in a tax certificate. No proceeds will
be invested at a yield higher than the bond yield unless the use of they qualify. If the actual facts regarding
proceeds changes from what was reasonably expected at closing,
Compliance Official will discuss those changes with bond counsel to the Bond
see if the temporary periods
changed.
Bond proceeds include the amount received from the sale of the bonds,
held in a payment or reserve fund for the bonds and investment earnings
amounts
The proceeds will not be invested in any investmen whereoae u t .
determined. yieldcannot be
Any investment in a guaranteed investment contract or similar investor
agreement will be made only in compliance with the bidding requirements as reviewedent
counsel. by bond
Bond proceeds from each issue will be invested so that they can be
acked
separately from any other funds or other bond issues of the Town. The Town will work with the
registrar, trustee or other applicable person or entity to be sure that invested earnings a the
allocated between bond proceeds and other funds. g re properly
1615748.6
2
2. USE OF PROCEEDS.
Detailed records will be made and kept by the Town with regard to the use of
bond proceeds and shall be kept for each separate bond sale or other tax-exempt financing. For
each expenditure,the amount,date of and purpose must be recorded. If the project is also funded
with non-bond proceeds, the records will reflect an allocation of expenditures between bond
proceeds and other funds. No proceeds will be used to reimburse an expenditure made prior to
the issue date of the bonds unless the reimbursement requirement, including the prior declaration
of intent to reimburse, has been fully complied with and evidence of such compliance is
maintained. The Town Council by taking action or the Finance Director is authorized to
complete the declaration of intent to reimburse.
The Town is expected to exercise diligence to expend the proceeds, to enter into
within six months of the issue date a binding contract to expend at least 10%of the proceeds and
to have expended at least 85% of the proceeds and investment income on the proceeds within
three years. After the day before the third anniversary of the bonds' closing, any remaining
proceeds in the construction account must be yield restricted.
The Bond Compliance Official shall periodically review the progress of the
projects and the expenditure of proceeds to ensure timely expenditure.
3. USE OF BOND FINANCED FACILITIES.
Detailed records of the use of proceeds will identify those facilities that are
financed in whole or in part with bond proceeds and must reflect the allocation of bond proceeds
and other funds used. Any sale or lease to, or other agreement for use by, a private party in a
trade or business can adversely affect the tax status of the bonds. The Town will not sell or lease
any bond financed property or enter into any agreement with non-governmental entities
(including non-profit entities) for use or management of any bond financed property without a
thorough review by the Bond Compliance Official and bond counsel. Although not a
comprehensive list,the Bond Compliance Official will review the following types of transactions
with bond counsel prior to entering into any agreement with non-governmental entities or
persons: (a) the sale or lease of any bond financed property, including to non-profit entities and
501(c)(3) entities (i.e. Boys & Girls Clubs), (b) any management contracts with a food service
1615748.6
3
provider or book store, (c) any research agreements, and (d) public-private partnerships. The
Bond Compliance Official shall periodically review the use of all bond financed facilities to
ensure compliance with the private use restrictions. In the event the Town takes action that
causes the bonds to meet the private business tests or private loan financing test, the Bond
Compliance Official shall meet with bond counsel as soon practicable after the issue is
discovered to discuss the steps required to correct the noncompliance, including, if necessary,
redeeming or defeasing all of the bonds that meet the private business tests or private loan
financing test.
4. ARBITRAGE REBATE.
Any time that bond proceeds are permitted to be invested at a yield higher than
the bond yield, the amount earned over the bond yield is arbitrage. With certain exceptions, the
Town is obligated to pay over(rebate) to the United States any arbitrage earned. The Town will
keep complete and accurate records of all investments of bond proceeds and all information
supporting any applicable exceptions to the rebate requirement and will retain or ensure that
either the registrar or trustee has retained a professional rebate consultant to review the records
and prepare a report so that the Town or the registrar or trustee can make any necessary rebate J
payments. Unless exempt, the Town must, at a minimum, make payments at every fifth
anniversary of the issue and upon final payment of a series of bonds. The Bond Compliance
Official will review any exemption prior to each fifth anniversary and upon final payment to
determine if any facts have changed which might eliminate the exemption.
5. RECORD RETENTION.
All records concerning the bond issue, including
a) the transcript of the original proceedings,
b) investment of proceeds,
c) use and allocation of proceeds, including the declaration of intent to
reimburse,
d) non-governmental use of bond financed property,
e) payment of principal and interest on the bonds,
f) the interest rate or rates on the bonds from time to time, if variable,
g) compliance with reimbursement and tax return filing requirements,
1615748.6
4 „gm)
h) refunding of all or part of the bonds, including proof of payment of
principal and interest on refunding and refunded bonds, either at maturity
or prior redemption,
i) payment of arbitrage rebate or information supporting any exemption to
rebate, and
j) evidence of compliance with special requirements for Tax Credit Bonds, if
applicable,
shall be kept for the life of the bonds plus three years and, if the bonds are refunded, for the life
of all of the refunding bonds plus three years or for the time specified for the retention of such
records under Arizona law, whichever is longer.
6. SPECIAL REQUIREMENTS FOR TAX CREDIT BONDS.
If the Town issues any Qualified Forestry Conservation Bonds, New Clean
Renewable Energy Bonds or Qualified Energy Conservation Bonds (the "Tax Credit Bonds"),
additional procedures will be adopted.
7. EMMA REMINDER.
As an issuer of bonds,the Town is also required to provide ongoing disclosures in
the form of annual financing information and certain listed events, currently filed on the
Municipal Securities Rulemaking Board's Electronic Municipal Market Access ("EMMA")
system.
L
1615748.6
5
j