INFORMATION #3 04-13-2009.a
' ' ~ ~_' _ Ehlers -leaders In Publr'c Finance Since X95'5
~~
oPEB Bonds
May H~Ip with
Budget Pressures
-Page 2
Market Update
---Page 2
Refinance,
Restructure,
Refocus
-Page 3
Are You
Conservation
Rate Ready?
--Page 4
GFOA
Recommended
Practices on
Selecting
Financial .,
Advisors
-Page 5
School District
Cash Flow
Shortfalls on the
Horizon
-Page ~
Municipal Bond Provisions in the
Federal Stimulus Bill
By, Joel Sutter, Financial Advisor
Mt~cln of the news co
federal stimtilt~s bill
in federal spending, r
spending provisions,
other changes relate
general intent of
these changes is to
make it easier and
less expensive for
state and Local
governments to
bot~.•ow money to
finance projects, We
have summa~•ized
preliminary
information on some
key provisions below.
Bank Qualification
Tine change that may have
tine biggest effect an many of our clients is an
expansion of the "bank qualification limit," rn
recent years, local gove~~.nments could designate
tax-exempt financings as "bank qualified" (or
BQ} if they isstxed $10 million or less in tax
exempt debt during a calendar year. Since BQ
issues rest~It in tax advantages for banks that
purchase them, interest rates on tlnese issues are
usually lower than on other tax-exempt issues,
The bill increases the annual BQ limit from
$10 million to X30 million for 2009 and 210,
making it possible for many more local
governments to issue BQ debt Tlne ultimate
effect of this change is uncertain, while BQ
issues have usually resulted in lower interest
rates, this bill will create a large increase in the
supply of BQ issues, which could .reduce or
eliminate the difference it1 i~~terest rates,
Other Bank Qualification Changes -The bill
includes other changes in bank qualification
rules which will affect some of ot~r clients,
Changes include: allowing 50z(c}(3}
organizations to be treated as tine "issuer" for
purposes of bank qualification, even if the debt
is issued by a larger organization; and allowing
bank qualification of larger pooled financings,
if the ultimate recipients of the finds each
receive $30 million or less.
verage about the historic New and Expanded Forms of
has focused on the $7S7 billion YIn recent years, the Federal
n addition to these dixect allowed several categories o
the bill includes a ntrmbe~• of financings, These are issues
d to municipal bonds. The investors receive a federal t
^ ^ inter
issue
ua ^
^~
little
exile
The b
alloca
of the ~ ca
- The allocation foi• Clean
`Tax. Credit" Bonds -
government has
f "tax credit"
for which
ax credit in lieu of
est, so debt can be
d with either very
or no interest
nse to the issuer.
ill increases
bons for several
existing
categories of tax
credit bonds and
Renewable Energy
Bonds ~CREBs) ~s inc~•eased from $S00
million to $2.4 billion.
-The allocation for Qualified Energy
Conservation Bonds (QECBs} is inc~•eased
ffom $ S00 million to $ 3.2 billion.
- The allocation for Qualified Zone
Academy Bonds (Q7ABs} for specific types
of school improvement is increased from
$ 400 million to $1.4 billion.
- Anew category of Qualified School
Construction Bonds is created, with
allocations of $11 billion each for 2009
and 2010,
For most of tlnese forms of .bonds, maximum
allocations will be granted to each state, and state
authorities will be responsible to assign allocations
to local governments wino apply, There also are
fairly complex eligibility requirements, labor
standard requirements, and repayment restrictions
for these bonds, So, it may take several months
before any of these new forms of bonds can
be issued.
• Build America Bonds - Tlus is anothet• totally new
forth of bond. Local governments which are
authorized to issue tax exempt bonds will be
allowed to issue taxable Build America Bonds
itlstead during 2009 and 2010. An incentive will
~FFDERAL STIMULUS BILL continued on page 6y
creates one new
tegory of bonds,
Managing Yaur
Arbitrage
is Increasingly
Important
-Page 6
Chlers Atlvisor March 2UO3
OPEB Bonds May Help with Budget Pressures
As local governments in Minnesota
str~xggle with pending budget shortfalls,
some. have found limited relief through
a new Minnesota State Law related to
finding of other post-employment
benefits (OPEB}. Essentially, the ldw
allows governments to reduce their
operating fund expenditures by using
OPEB fonds to fund a trust, OPEB
costs (chiefly zetiree laealth insurance)
could then be paid from tlae trust
rather than from operating fiends.
The decision to issue OPEB bonds is
not an easy one, It will cause increased
debt service levies, and there maybe
other financial and political drawbacks,
including increased exposlue to
investment performance. Some local
governments may have already
reserved finds for tlaeir OPEB liabilities
or may have bettet• options For firnding
future costs.
As of March f, 38 Minnesota school
districts laave issued OPEB bonds,
ranging in size from $725,000 to
$40,085,000. Fewet• cities and counties
are considering OPEB bonds at this
time. Most cities have relatively low
liabilities, and most counties are able to
cash flow the costs from existing or
planned tax levies, It is likely that
counties and a few cities will issue debt
for OPEB in tlae near firtltre as levy
limits and budgets tighten,
As local governments prepa~•e to
implement the new accounting
standa>tds for OtXaer Post-Employment
Benefits (GASB 43 and 45}, they slaould
take the opportunity to develop a plan
for funding their OPEB liability. The
plan may include continuing to "pay as
you go," setting up a trust, anti possibly
issuing bonds to fiend the trust.
The fist step u1 t1~e process is the
completion of an actuarial study to
document the accrued liabilities and the
costs for OPEB. Once the actuarial study
is completed, the government unit
should develop a comprehensive
f~.aancial plan for its OPEB costs and
liabilities. The plan should address at
least the following issues:
+ whether to establish a trust and tlae
type of trust;
• what portion of the liability should
be fiXnded by the trust;
By Gary Olsen, Financial Advisor
How fiends in the gust should be
invested;
• Sources of fiends for the t~•ust
(bonds, operating fiends, or a
combination};
• Bond terms and structures;
• Tax impact of issuing bonds;.
• Political and otlae~• consequences of
issuing bonds;
• The impact on the general fund; and,
• How fitt~~re OPEB costs will be funded.
Developing a comp~•ehensive plan will
require a collaborative effort. Ehlers
financial advisors are ready to work
with yout• staff, yout• actuary, your
auditor once other professionals to
discuss yaLl1• options and help you
develop an OPEB firnding plan.
_ - lans~~e~~e®waei
~~ ~f ~ i~ ~< ~ ~ 5 i 1 II ~ V A~
Railer Coaster for Rafas. The last six months Nava been among the most tumultuous in
history far the world financial markets and for the municipal band market as well, Beginning in
mid-September, avariety offactors -plummeting investor confidence, the demise of large
financial institutions, lack of liquidityfor other large institutional investors - led to dramatic
II1CreaSeS In Interest Bond Buyer Index, 200Q to Present
rates on municipal ~.~Jo% March 6, 2009
bonds, As shown in this
graph, the Bond Buyer a,oo°I°
Index ~a weekly national
index of average yields ~,~o°lo
an AA-rated 20 year
municipal bonds rose ~.oo°lo
from x,54°I° in mid- , °
September to B.O~°/° ire 4.~0 la
mid-October, its highest ~ oo°~°
level since January of oo a~ 02 03 04 05 o6 07 as o9
280D, Rates fluctuated
wi id ly through NOTE; The sond Buyer 20 Band index is a weekly index of average yields on AA-rated municipal bands
maturing In 20 years. SOURCE; The Bond Buyer. Chart prepared by Ehlers & Associates, Inc,
December before
dropping dramatically in January, As of March 6, the Bond Buyer Index was back down to
4,96°I°, which is very close to its average over the last ten years
"Muni to Treasury" Ratios Return to More Normal Levels. One of the key ratios that we
moniter isthe ratio ofyields on high-rated municipal bonds ~"munis"~ to the yields on
treasuries. Because interest on municipal bonds is taxexempt, muni yields are generally lower
than treasury yields, For ten year bands, this ratio has hovered between 85°lo and 90°lo for most
of the past decade.l~hen the ratio gets significantly higher than this, it is usually a sign that
muni yields will decline.
As investors grew increasingly nervous last year and showed a strong preference far the safety of
treasuries, the muni to treasury ratio for 1D year bonds increased above 100°l~ on September ~2
and hit an incredible high of 188°I° in December, This led to a chorus of pronouncements from
brokers and other financial experts that munis were a "great buy," followed by an increase in
demand for munisand adec~ine inyields, Bymid-February., the 1o year muni to treasury ratio
had dropped down below 100°/Q, As of March 1, it had increased to just above 100°/°.
This means that munis are no longer the "great buy" that they were in recent months, So here is
less raasan aow to beliave ihat moor yields: will coniiaoa i~a ~'ecline s~bsta~~ially tllart here was
a moa~l7 ago, These trends; however, apply primarily tohigher-rated bonds with relatively short
maturities. Yields onlower-rated bonds and longer maturities are still high relativeto treasuries,
Ehlers. Weekly Market ~'nmmentarles to Clients. To help our clients stay aware of the
rapid changes in the municipal band market, we began last #all to send out weekly market
commentaries to cur clients by eWmail~ If you are a client and are not receiving these
commentaries, you may contact your Fhlers financial advisor to be added to the list.
•2•
shiers Advisor • March 2x09
built in 2008, To address the problem, the City is undertaking
multiple strategies uacludirlg:
• Increasing user fees;
• Reducing operating expenses at the plant; and,
• Restructuring the debt with G,Q, capital appreciation
bonds (CABs),
CABs are a type of debt that allows an issue to forego any
interest or principal for five, ten or 20 years. ~e recommend
caution when utilizing this type of debt. Because City B has
$10 million of older debt outstanding, the CABS can be utilized
to increase the duration of the older debt and leave the newer
debt in place. CABs do carry slightly higher interest rates than
typical G.4. Bonds and delaying debt payments significantly
increases the interest costs. The charts on page 3 demonstrate
debt payments before and after tlYe rest~l~ctuting for City B,
Again, local governments should exercise extreme caution u~
delaying debt service payments, Pushing bonds to later years
reduces firtLue flexib' 'ty to layer additional debt on top of the
existing str<rcture. It may be better to find other resources
from the City (interfiind loans, tax levy, etc) to pay debt
service in the short ter7m rather than issue CABs and incur 1~igh
interest costs,
As we refocus to a new economic reality, we at Ehlers want
you to be .aware of all options to consider.
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flew ~~nnesota .Law - - .
Re wires dater Conser~rat~on
q
Rate Stru ctu res
By Jca~~c i/ogt ar~o' Eiizabe~n Diaz, Flnar~clal Analysis
fUlinnesota State haw requires publicwafer uti itiesta implemenf
residential and commercial rate structures that encourage water
conservation among customers. There are three implementation dates
affecting water utilities serving mare than 1,000 people.
• Now, utilities must comply before requesting State approval to
construct a new well or increase existing well volumes
• Metro area utilities must comply by January 1, 2010, meaning any
necessary changes need fo be made this year,
• All other utilities must comply byJanuary 1, 2013.
Public water utilities that serve fewer than 1,000 people or lack user
meters are exempt from the conservation rate mandate.
A conservation rate structure is a rate structure that provides
households and businesses with a financial incentive to use less
water, The most common conservation rate structure in Minnesota
employs "block rates" which provide for an increase in the rate as
water usage increases,
An example of block rates would be.
• 0 to 1,000 gallons of water usage per quarter would cost $2,00
per 1,000 gallons;
• 15,000~4~,000 gallons of water usage per quarter would increase
to $2.~0 per 1,000 gallons; and,
• 45,ooa=~a,000 gailans~af water usage per quarter would increase
fo$3.15:pergallan. -.
More examples of conservation rate structures an are an the
Department of Natural Resources ~DNR} Web site at.
hftp,llfiles,dnr.state,mn.uslwaterslwatermgmt_sectianlappropriafians
Iconservatian_rate_structures,pdf.
l~hlers recommends taking the following steps fo ensure compliance
with the new law,
• Review your existing rate structure to determine if it meets the
DNR's guidelines far a conservation rate structure.
• If you determine a change is needed, advise your governing body
that they will need to consider new rates over the next 12~2~4
months.
• Select one ar two optional rafe structures, and assess how they
will impact different types of customers. Who will pay mare and
who will pay less than they do now? Will wafer conservation result
in lower wafer bills?
• Prepare a financial projection of the new rafe opfion~s} fo ensure
adequate revenue will be available to the utility.
• Provide the results fo your governing body and request them fo
approve a new rate structure.
• Communicate with your customers, Bill inserts, newsletters, and
open houses all provide opportunities to let yaurcustomers know
about the new rafe structure and ways fo conserve water,
Please see the "Conservation Rates. far Wafer Utilities" resource page
at wwwc>7iers~ir~c.corr~or contact an Fhlers Financial Advisor for
more information.
•4•
Ehlers Advisor • March 20U9
GFOA RECOMMENDED PRACTICES ON SELECTING FINANCIAL ADVISORS
Only Independent Advisors Should Represent You
By Bruce .Kimmel, Financial Advisor
When the Government Finance officers Association ~GFDA)
published its f S recommended practices on effective financial
management last yeat•, two st~•ongly-wo~•ded recommendations
stressed the importance of an independent financial advisor.
The two GFOA recommended practices, "Selecting Financial
Advisors" and "Selecting Unde~•writers for Negotiated Bond
Sales," stressed the need to beep the fnaancial advisory and
bond unde~•writing fi~nctions completely separate in any
competitive or negotiated debt issuance process.
At its outset, Selecting Financial Advisors states t11at;
"A financial advisor represents the issuer, and only the
issuer, in the sale of bonds, Issuers should assure
themselves that the selected financial advisor has the
necessary expertise to assist the issuer in selecting other
finance professionals, planning t1~e bond sale, and
successfi~lly selling and closing tlae bonds."
The guidelines go on to explain that the GFDA intends to set a
highe~• standard than is required by current ~•egulations on
undetwiiti~lg practices because "disclosure and consent are.
not st~ficient to cure the inherent conflict of interest,"
Selecting Underwriters for ~1Tegotiated .Bond Sales expands on
this theme as follows;
"Issuers must keep in mind that tlae roles of the
unclei•writer and the financial advisor are separate,
adversarial roles and cannot be provided by the same
party. Underwi~ters do not I~ave a fiduciary responsibility
to tlae issuer, A fi~~ancial advisor represents only the issuer
and has a Bclucia~y ~•esponsib' 'ty to tlae issue~•."
This recommended practice advises that if an issuer is
considetyng a negotiated sale, it should retain an independent
financial adviso~• fit•st. The advisor can then help the issuer ita
deciding the best bond sale method, and if a negotiated sale is
most appropriate, the advisor can conduct the unde~•writei•
selection process,
This GFGA recommended practice on selecting undef•writers is
consistent with Minnesota's statlito~y requirement that any
negotiated sale ove~• ~ 1 million be. evaluated by an independent
financial advisor.
Ce~•tain underw~7ters claim compliance with the statute and
GFaA guidelines by having an advisor who has no relationship
with the issuer review tlae negotiated sale results after pricing,
In those cases, it is the underwriter who hires the financial
adviso~•, and the direct lii~l~ to the issuer and the objectivity of a
financial advisor are Lost. This practice is tl~e exact opposite of
GFDA's recommended approach.
Further, "GFGA recommends that a f~.•m hired as a financial
advisor should not be allowed to resign iti order to unde~•w~ti.te
the proposed negotiated sale of bonds."
As a charter member of the National Association of
Independent Public Finance Advisors (NAIPFA), Ehlers Iaas
sought to raise governmental awareness of the critical
distinctions between financial advisors and unde~•writers. We
believe it is noteworthy that GFaA loos addressed the inherent
difference in roles and responsibilities so directly in its debt
management guidelines.
To download copies of these and other GFOA recommended
practices, visit www.gfoa,org and choose "Recommended
P~•actices" from the menu on tlae Ieft side of the home page.
Ehlers 2009 School Finance Seminar
It's aRecession -Now Vllhat?
Managing School Finances in a Recession
Friday, March 27, 2009
At fhe Radisson Ho#e[ in Roseville
Over the past six months, newspaper headlines often have resembled
stories from the 1930s, but with a more modern twist. At Ehlers, we are
well aware of haw fhe recession and related problems in the financial
markets are creating serious difficulties for school districts, Mast
districts are spending lots of time an forecasting and budget reductions,
while at the same time trying fo figure out the impact of f=ederal and
State initiatives, fUlany districts are also struggling to decide, in this era
of uncertainty, whether to put a referendum proposal on the ballot.
Because of these pressures, we have decided to focus the Ehlers annual
school finance seminar on presentations that may help districts manage
their finances in these challenging times.
opening the seminar will be a presentation by Angie Eiers, research
director of Growth & Justice, on their important new initiative Smart
Investments5"" in Minnesota's Students,
Other presentations will ~~~ ~ ~ ~~
address the fol owing topics;
;~
• Investing of public funds;
• Geffing stafceholder input through a
community survey;
Creative tools for financing critical capital needs;
Using a cornrnunitytas~ farce for ~eyfinancial decisions;
l/inancial reporting options under GASB 4~; and,
• Hottopics in school finance cash flow borrowing, oPEBfunding,
federal stimulus package, and other topics,
We will end with a panel of finance experts discussing the changing
financial markets and their impact on school districts,
Detailed inforrnatian, a seminar brochure, and online registration are
available now on the Ehlers vl~eb site -- wwwcf~iers-i~c.cor~,
.~.
Ehlers Advisor • March 2009
Refinance, Restructure, Refocus
By Mark Ruff, Finccnc~ctl Advisor and Brian Shannon, Ftnanc~al Analyst
These are trying times u~ many ways. Many of us are trying to
fnad a perspective; trying to balance the uncertainty of what is
to come ii1 the next few years with the optimism that better
economic times are ahead.
City will need to wait four to five years for the tax forfeiture
process to result in a sale of tlae p~•operty and hope foi• some
recovery of the special assessments (special assessments are
paid first iii this situation).
One piece of good news is that interest rates are low and.
refinancing for savings will help short-term budgets. However,
a more wholesale
restructuring of debt is
also an option that local
goveri~nents are
considering.
Many communities
issued debt over the Iasi
five to ten years,
anticipating growth,
Gtowtl~ was expected to
provide new tax
~•evenues or was
expected to pay water
and sewer hookup fees
(otherwise known as
sAC/WAC fees), or was
expected to simply
make good on the
special assessments
levied against the
piopeity.
Many communities
issued general obligation
(G.O.) debt expecting
these increased tax
revenues, water and
sewer fees, or special
assessments to pay for
the debt service. Even
when the growth
assumptions were
moderate, the stark
reality of today's real
estate market is causing
financial st~•ain. with
some special
assessments now in
delinquency or with CITY B: Annual Payments After CABs Issu
new water or sewer
treatment plants in place, communities are looking foi• options
to reduce payments dramatically.
How does a City afford. $200.,000 per year of debt service
payments for four or five years with oz~.y $344,000 cash? The
City has no reserves
available to make
payments in the interim,
and tlae tax levy to
support the annual debt
service would cause a 30
percent hlcrease in the
tax rate. One possib' 'ty
is to ~•est~lictu~•e the debt
to be interest only for six
years and a balloon
payment in year seven,
assuming compliance
with requirements of
Minnesota statutes. rn
year seven, the City
could decide to pay it all
off with proceeds of a
sale or it could decide to
refinance the bonds for
~.0 more years and pay
from other revenue
sources at that tune.
One word of warning.
fssLiing new debt
with a Long call date
(prepayment date) could
set City A up for another
disaster. ff the economy
does turn around faster
than expected, tl~e City
does not want special
assessments sitting in a
debt service find for
several years with no
prospect of paying down
the debt.
ed In
2009 with banger Term Debt As with. much in life,
there are few win win
situations. Wlvle restiti~eturing debt can provide flexibility to
better match cash-flows, tlae rating agencies see this as a red
flag that requi~•es more explanation, Often, if restr~ict<lring is
part of a broader plan to improve financial operations and
create financial flexibility, rest~licttu ing is pefceived as more
acceptable. That leads us to example City B.
urger City B expanded its sanitary sewer treatment plant in
2005 and issued ~ 10 million of G.O. Bonds to be paid from
sAC/WAC fees and from user fees. At that tune, the City was
seeing 200 homes per year built. City B thought they we~•e
conservative when they st~•~rctured the debt assuming
SAC/w~AC fees f~•om f 5o homes per year. All of a sudden, the
bottom fell out of the market and o~~y 24 new homes were
The good news is that Mhnnesota State Law and the bond
market offe~• great nexib' 'ty in addressing short-te~~.n cash flow
needs. Below are two case studies that are great examples.
Smaller City A issued $1.5 million G.O. lmptovement Bonds for
streets, sewer, and water for a new subdivision in 2004. The
developer loos walked away from the lots and the special
assessments. No bank load a mortgage on the property. The
City has $300,000 from a letter of credit provided by the
developer when the bonds we~•e issued, but no prospect in the
near term for const~l~etion of the lots. In the worst case, the
•3•
CITY B: Annual Payments Before Restructuring & Assuming Higher Growth to Pay Dept
~hlcrs Advisor ~ March 2009
School District Cash Flow Shortfalls on the Horizon
By Kristin Hanson, Financiar Advisor
The Governor has proposes[ to change
the payment sched~~Ie for state aids and
property tax credits paid to school
districts in fiscal year 2010 and his
proposals could have a big impact on the
cash flow of school districts.
It seems lil~ely that .some version of the
Gove~•nor's proposals will be a pact of the
State's budget balancing measures. If floe
Governor's proposals are implemented,
the cumulative cash balances of all school
districts at t11e end of fiscal yea~• 2010 will
be reduced by a wlaoppi~g ~ 1.25 billion,
or an average of ove~• $1,300 per pupil
unit, This will c~•eate cash flow deficits
for many districts not currently
experiencing them, and increase the sire
of deficits far othe~• districts,
one of the best long. term solutions for
most districts facing cash flow deficits is
to issue aid or tax anticipation
certificates. Some of the key benefits are;
Districts only have to borrow one
time, for up to 13 months, and have
sufficient cash for the whole year;
• Districts cata bof'row enough to
cover their projected cash deficits
plus a reasonable reserve
znterest rates are very low; and,,
In some years, unused proceeds can
be invested at highe~• rates than the
borrowing rate to help offset the
cost of borrowing.
So how does a school dist~•ict determine
if they need to o~• even can borrow? First,
floe district needs to prepare a monthly
cash flow schedule of some combination
of Funds 1 tla~•ougla 4. Debt service and
const~l~ction finds cannot be included in
the cash flow as the dist~•ict would be
borrowing in anticipation of state aid to
be received in Funds 1-4, The beginning
balance needs to include both cash and
investments and any date of the month
can be used as the measuring point,
If the cash flow schedule does not show
any negative balances in any month, the
dist~•ict legally camaot borrow. However,
if the cash flow schedule shaves a
negative balance at any time during the
year, the district can bo~•row within the
' 'ts of Federal and State laws, Ehlers
works with districts to help determine
the borrowing amount and loops at how
floe financing fits ill with other fia~ancial
plans and needs of floe dist~~ct,
Tlae typical process of aid anticipation
borrowing begins as early as April,
However, dist~•icts can issue aid oz• tax
anticipation certificates at any tune of the
year; The timeli~~e for borrowing, from
when a dist~xct prepa~•es a cash flow
schedule to the trine the dist~•ict receives
the proceeds, takes about two months,
As we all await the outcome of the 2009
legislative session, please contact Ehlers if
you have any questions about cash flow
borrowing o~• other ways to address cash
flow issues,
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tOHTACT (15 silents a
I Minnesota 2~G4 School Finance InteCest,
seminar (March 27}.
I i dR
~~ Conserv or Water Utilities • SC
1RS Camotiance Ouestlonnalre
I Sam le ~ Stl
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Managing Your Aebitrage Federal Stimulus Bill
Is Increasingly Important ~°°^"^0e°~~°mPa9e„
Five I~~nnesota and Wisoonsr"n L Deal
Governments Recer'ue Random tRS Suruey
We a~•e aware of tluee Wisconsin cities, one Minnesota
city and one Minnesota school district that have received
an IRS survey regarditlgpDst-issuance compliance with
tax-exempt bond regulations. The distribution of
t11e survey is random for any entity that issued debt in
2005. The IRS is not targeting larger entities -the one
Minnesota city on the list. has a population. of less
than 1,000.
The IRS did publicly announce the purpose and scope of
the survey in a January 27, 2009, a~•ticle in The Bond
Buyer, The IRS sent 200 surveys out nationwide from a pool of 16,600 issuers. The IRS
has indicated the main purpose of floe survey was to educate issuers about the need for
post-issuance compliance and allow the IRS to gather data about the degree of
compliance. The IRS also left open the possibility of an audit of those issuers who were
sent a survey,
Post-issuance compliance includes questions about policies and procedures for arbitrage
monito~•ing, proper use of proceeds, and records retention.
If you have received a survey,. we reconamend you contact Ehlers and your bond counsel
immediately. The responses to the survey are due by Ap~~l 2G, 2009.
A sample questionnaie can be found on our website at www,ehlers-ins,com
be provided to the issuer
tthrough an incentive payment}
or the bondholders (through a
tax credit}, We have learned
that the payment can't go
partially to bath..
Recovery Zone Economic
Development Bonds. -- These are
similar to Build. America. Bonds,
but with a larger incentive
payment to the issuer, Funds
must be used for economic
development projects in areas
that have been hit by large job
losses.
We are just beginning to learn
about many of these provisions,
and there are many details about
them which have. not yet been
disclosed. If you have questions
about if or how any of these
provisions may affect your
financing plans, please contact us,
E H L E R 5 Ehlers is committed to Roseville, MN Dlfice, 3060 Centre Poir1#e Drive ~ ROSe~ille; MiV 55113-1105 ~ 651-691.8500
designl~g customized financial.solutions Brookfield, Wl Oifice~ 375 Bishops Way, Suite 225 ~ Brookfisld, WI 53005-6202.262-785-1520
LEApE:RS IN PUBLIC FINANCE for outstacding cammunikles 1,i51e, IL Ulfice: 550 WarrenVille Road, Suite 220 ~ lisle, IL 60532.4311 ~ 630-211-3330
www,ehlers-inc.cnm
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