Loading...
10-26-15 EDA Mtg Agenda CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, OCTOBER 26, 2015 7:30 PM, or Immediately following Regular City Council Meeting AGENDA 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING A. Roll Call President Zerby _____ Labadie _____ Siakel _____ Sundberg _____ Woodruff _____ B. Review Agenda 2. APPROVAL OF MINUTES A. EDA Minutes of July 27, 2015 (Att.- Minutes) 3. NEW BUSINESS A. Public Safety Facility Bond Refunding (Treasurer’s memo) B. Adoption of a Post Issuance Policy (Treasurer’s memo) 4. ADJOURN #2A CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, JULY 27, 2015 Immediately following Regular City Council Meeting MINUTES 1. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING President Zerby called the meeting to order at 8:01 P.M. A. Roll Call Present. President Zerby; Boardmembers Labadie, Siakel, Sundberg and Woodruff; Executive Director/Secretary Joynes; Assistant Treasurer DeJong; Assistant Executive Director Nielsen; and City Attorney Keane Absent: None B. Review Agenda Woodruff moved, Siakel seconded, approving the agenda as presented. Motion passed 5/0. 2. APPROVAL OF MINUTES A. EDA Minutes of September 8, 2014 Woodruff moved, Siakel seconded, approving the EDA Meeting Minutes of September 8, 2014, as presented. Motion passed 4/0/1 with Labadie abstaining because she was not an EDA Boardmember then. 3. CONSENT President Zerby reviewed the item on the consent agenda. Siakel moved, Sundberg seconded, Approving the Motion Contained on the Consent Agenda. A. Treasurer’s Report Motion passed 5/0. 4. NEW BUSINESS A. Selection of Officers Executive Director Joynes explained the Shorewood Economic Development Authority (EDA) Bylaws stipulate the Board must select officers during its annual meeting (this meeting). The position of President must be the Mayor of Shorewood, the Executive Director/Secretary shall be the City Administrator, the Assistant Treasurer shall be the Director of Finance, and the Assistant Executive Director shall be the Director of Planning. The positions of Vice President and Treasurer need to be appointed. There is an CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 27, 2015 Page 2 of 3 option to appoint a President Pro-Tem also, but the Board has chosen not to appoint anyone to that position in the past. Boardmember Sundberg stated from her perspective it may be appropriate to appoint someone to the President Pro-Tem position based on the current and potential projects the EDA may be involved in. Boardmember Woodruff stated the City has never filled that position. Boardmember Woodruff explained the President Pro-Tem fills in if both the President and Vice President are not available and that has never happened He clarified he has no problem with the Board appointing someone to the Pro-Tem position. . Boardmember Siakel stated she is open to appointing a Boardmember to the position of President Pro-Tem and keeping the other Shorewood EDA officer appointments the same as they are. Siakel moved, Woodruff seconded, approving the Economic Development Authority Officer appointments of: President – Scott Zerby Vice President – Richard Woodruff President Pro-Tem – Kristine Sundberg Treasurer – Debbie Siakel Executive Director/Secretary – Bill Joynes Assistant Treasurer – Bruce DeJong Assistant Executive Director – Brad Nielsen Motion passed 5/0. B. Approval of a Resolution Requesting the City of Shorewood Levy a Tax for the Benefit of the Economic Development Authority Executive Director Joynes explained staff is recommending a tax levy pursuant to Minnesota State Statutes §469.033 that would allow for operating funds for the Shorewood EDA. Currently there are none. Given the slate of current and anticipated projects Shorewood may be asked to participate in over the next few years it is prudent and appropriate to do that at this time. Staff is recommending a levy of 1 percent and asking the Shorewood EDA Board to request the Shorewood Council to include that levy in the 2016 Shorewood levy. The 1 percent additional levy will raise approximately $50,000. The exact amount will be known before the maximum tax levy has to be certified in September 2015. Those funds will be used to pay anticipated activities such as legal work and consulting services. Boardmember Siakel asked if the 1 percent levy would be permanent or a one-time levy. Executive Director Joynes clarified it only includes Shorewood’s 2016 budget. It would have to be reconsidered the following year. Boardmember Woodruff asked if there is a way for the City to fund the EDA operational needs out of Shorewood’s General Fund reserves. Is the Shorewood Council authorized to transfer a to-be-determined amount out of Shorewood’s General Fund reserves to the EDA? Attorney Keane nodded yes. Executive Director Joynes responded it is. Woodruff noted he preferred transferring money than having a tax levy not knowing now what that tax would be spent for. Up to $50,000 could be transferred for use the rest of 2015 and in 2016. He clarified he is not opposed to a levy if there is a legitimate ongoing need. CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING July 27, 2015 Page 3 of 3 Boardmember Siakel stated that based on the 2016 Shorewood Operating Budget discussion in the work session held earlier this evening it is anticipated there will be about $116,000 of unallocated General Fund reserves at the end of 2016. Therefore, she can support transferring $50,000 to the EDA. Boardmember Woodruff stated there is also $40,000 for a possible forester / water resources position is included in the 2016 draft operating budget. Council has not decided if that will actually be used. He then stated the tax could always be levied in 2017. He noted there would not be a problem finding $50,000 in the budget if needed. BJ stated he thought that over time there will be an increasing need for the EDA to have operational funds. He noted that EDA levies are not capped by levy limits. Woodruff moved, Siakel seconded, requesting the Shorewood City Council authorize a transfer of $50,000 from Shorewood General Fund reserves to the Shorewood Economic Development Authority for operational needs in the remainder of 2015 and all of 2016.” Motion passed 5/0. 5. ADJOURN Sundberg moved, Labadie seconded, Adjourning the Shorewood Economic Development Authority Meeting of July 27, 2015, at 8:11 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Scott Zerby, President ATTEST: William S. Joynes, Executive Director #3A MEETING TYPE Special Meeting City of Shorewood Economic Development Authority Title / Subject: Resolution Giving Preliminary Approval To Issuance Of Refunding Bonds Meeting Date: October 26, 2015 Prepared by: Bruce DeJong Policy Consideration: Should the Shorewood Economic Development Authority (EDA) issue refunding bonds at this time to generate interest cost savings? Background: The City's bond consultant, Terri Heaton, of Springsted, Inc., will present the information for the refunding of the 2007 bond issues for the EDA. Ms. Heaton will provide the details regarding specific terms and conditions. The bonds are lease revenue bond that will refinance the debt of the EDA for the joint Police/Fire building in Shorewood and the Fire building in Deephaven. The boards for the Excelsior Fire District, South Lake Minnetonka Police Department, City of Deephaven and City of Shorewood have already passed resolutions authorizing the refunding. Staff will schedule a conference call with Moody's Investor Services for the purposes of assigning a bond rating to this sale. We anticipate they will affirm the City's current Aa2 rating. Financial or Budget Considerations: This refunding are estimated to save in excess of $350,000 on a net present value basis. The 5-6% savings is well in excess of the 3% minimum savings required by state statute for advance refunding bonds. Options: The EDA Board may choose to: 1.Authorize the resolution. 2.Reject the resolution and wait for another refunding opportunity. Recommendation / Action Requested: Staff recommends adoption of the Resolution Giving Preliminary Approval To Issuance Of Refunding Bonds. Next Steps and Timelines: The bond sale details will be brought back for acceptance by the EDA on December 14. SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. ____________ RESOLUTION GIVING PRELIMINARY APPROVAL TO ISSUANCE OF REFUNDING BONDS RELATED TO CERTAIN PUBLIC SAFETY FACILITIES BE IT RESOLVED By the Board of Commissioners (the “Board”) of the Shorewood Economic Development Authority (the “Authority”) as follows: Section 1. Recitals; The West Side Fire Project. 1.01. The Excelsior Fire District (the “District”), in conjunction with the City of Shorewood, Minnesota (“Shorewood”) and the Authority, financed a portion of the cost to construct a fire facility located in Shorewood (the “West Fire Side Project”) through the issuance by the Authority of its $3,865,000 Public Safety Fire Facility Lease Revenue Bonds, Series 2002A (City of Shorewood, Minnesota Lease Obligation) (the “Series 2002A Bonds”), pursuant to a Trust Indenture, dated as of September 1, 2002 (the “West Side Indenture”), between the Authority and U.S. Bank National Association, as trustee (the “Trustee”). 1.02. The District, in conjunction with Shorewood and the Authority, financed additional costs of the West Fire Side Project through the issuance by the Authority of its $1,195,000 Public Safety Fire Facility Lease Revenue Bonds, Series 2003A (City of Shorewood, Minnesota Lease Obligation) (the “Series 2003A Bonds”), pursuant to the West Side Indenture, as modified by a First Supplemental Trust Indenture, dated as of April 15, 2003 (the “Supplemental Indenture”). 1.03. The District and the South Lake Minnetonka Police Department (the “Department”) lease certain property to the Authority pursuant to the Ground Lease (West Side), dated as of September 1, 2002, as amended by the First Amendment to Ground Lease (West Side), dated as of April 15, 2003 (together, the “West Side Ground Lease”), and the Authority leases such property, together with the buildings, structures or improvements now or hereafter located thereon, to Shorewood pursuant to a Lease Purchase Agreement (West Side Fire Facilities), dated as of September 1, 2002, as amended by a First Amendment to Fire Facility Lease-Purchase Agreement, dated as of April 15, 2003 (together, the “West Side Fire Facility Lease”), between the Authority and Shorewood. 1.04. With the Authority’s consent, Shorewood entered into a Sublease Purchase Agreement (West Side Fire Facilities), dated as of September 1, 2002 (the “West Side Fire Sublease”), with the District, under which the District undertakes Shorewood’s obligations under the West Side Fire Facility Lease. 1.05. Pursuant to an Assignment and Security Agreement, dated as of September 1, 2002, as amended by a First Supplemental Assignment and Security Agreement, dated as of April 15, 2003 (together, the “West Side Assignment”), the Authority assigned to the Trustee all of the Authority’s right, title and interest in and to the West Side Ground Lease, the West Side Fire Facility Lease, the West Side Fire Sublease, and the Lease Payments to be made by the District thereunder (other than certain rights to indemnification and payment of expenses) as security for the Series 2002A Bonds and the Series 2003A Bonds. 469840v1 MNI SH230-54 1.06. At the request of the District and in order to achieve debt service savings, the Authority refunded the Series 2002A Bonds and the Series 2003A Bonds through the issuance of its $4,130,000 Public Safety Fire Facility Lease Revenue Crossover Refunding Bonds, Series 2007A (City of Shorewood, Minnesota Lease Obligation) (the “Series 2007A Bonds”), dated January 25, 2007. Section 2. Recitals; The West Side Police Project. 2.01. The Department, in conjunction with the City and the Authority, financed a portion of the cost to construct a police facility located in Shorewood (the “West Side Police Project”) through the issuance by the Authority of its $4,025,000 Public Safety Police Facility Lease Revenue Bonds, Series 2002B (City of Shorewood, Minnesota Lease Obligation) (the “Series 2002B Bonds”), all pursuant to the West Side Indenture. 2.02. The Department, in conjunction with Shorewood and the Authority, financed additional costs of the West Side Fire Project through issuance by the Authority of its $1,220,000 Public Safety Police Facility Lease Revenue Bonds, Series 2003B (City of Shorewood, Minnesota Lease Obligation) (the “Series 2003B Bonds”), pursuant to the West Side Indenture as modified by the Supplemental Indenture. 2.03. The Department and the Excelsior Fire District (the “District”) lease certain property to the Authority pursuant to the Ground Lease (West Side), dated as of September 1, 2002, as amended by a First Amendment to Ground Lease (West Side), dated as of April 15, 2003 (the “West Side Ground Lease”), and the Authority leases such property, together with the buildings, structures or improvements now or hereafter located thereon, to Shorewood pursuant to a Lease Purchase Agreement (West Side Police Facilities), dated as of September 1, 2002, between the Authority and Shorewood, as amended by a First Amendment to Lease-Purchase Agreement, dated as of April 15, 2003 (the “West Side Police Facility Lease”). 2.04. With the Authority’s consent, Shorewood entered into a Sublease Purchase Agreement (West Side Police Facilities) with the Department, dated as of September 1, 2002 (the “West Side Police Sublease”), under which the Department undertakes Shorewood’s obligations under the West Side Police Facility Lease. 2.05. Pursuant to an Assignment and Security Agreement, dated as of September 1, 2002, as amended by a First Supplemental Assignment and Security Agreement ,dated as of April 15, 2003 (the “West Side Assignment”), the Authority assigned to the Trustee all of the Authority’s right, title and interest in and to the West Side Ground Lease, the West Side Police Facility Lease, the West Side Police Sublease, and the Lease Payments to be made by the Department thereunder (other than certain rights to indemnification and payment of expenses) as security for the Series 2002B Bonds and the Series 2003B Bonds. 2.06. At the request of the Department and in order to achieve debt service savings, the Authority refunded the Series 2002B Bonds and the Series 2003B Bonds through the issuance of its $4,285,000 Public Safety Police Facility Lease Revenue Crossover Refunding Bonds, Series 2007B (City of Shorewood, Minnesota Lease Obligation) (the “Series 2007B Bonds”), dated January 25, 2007. Section 3. Recitals; The East Side Fire Project. 3.01. The District, in conjunction with the City of Deephaven, Minnesota (“Deephaven”) and the Authority, financed the costs to construct a fire facility located in Deephaven (the “East Side Project”), through issuance by the Authority of its $2,060,000 Public Safety Fire Facility Lease Revenue Bonds, Series 2002C (City of Deephaven, Minnesota Lease Obligation) (the “Series 2002C Bonds”), pursuant to a 2 469840v1 MNI SH230-54 Trust Indenture dated as of September 1, 2002 between the Authority and the Trustee (the “East Side Indenture”). 3.02. The District leases certain property from Deephaven pursuant to the Ground Lease (East Side) dated as of September 1, 2002 (the “East Side Ground Lease”), and the District in turn subleases that property to the Authority pursuant to the Subground Lease (East Side) dated as of September 1, 2002 (the “East Side Subground Lease”); and the Authority leases such property, together with the buildings, structures or improvements now or hereafter located thereon, to Deephaven pursuant to a Lease Purchase Agreement (East Side) between the Authority and Deephaven, dated as of September 1, 2002 (the “East Side Fire Facility Lease”). 3.03. With the Authority’s consent, Deephaven entered into a Sublease Purchase Agreement (East Side) with the District dated as of September 1, 2002 (the “East Side Sublease”), under which the District undertakes Deephaven’s obligations under the East Side Fire Facility Lease. 3.04. Pursuant to an Assignment and Security Agreement dated as of September 1, 2002 (the “East Side Assignment”), the Authority assigned to the Trustee all of the Authority’s right, title and interest in and to the East Side Ground Lease, the East Side Subground Lease, the East Side Fire Facility Lease, the East Side Sublease, and the Lease Payments to be made by the District thereunder (other than certain rights to indemnification and payment of expenses) as security for the Series 2002C Bonds. 3.05. At the request of the District and in order to achieve debt service savings, the Authority refunded the Series 2002C Bonds through the issuance of its $1,585,000 Public Safety Police Facility Lease Revenue Crossover Refunding Bonds, Series 2007C (the “Series 2007C Bonds”), dated January 25, 2007. Section 4. Refunding Authorized. 4.01. In order to realize further debt service savings, the District and the Department have proposed that the Authority issue one or more series of current refunding bonds in order to refund the Series 2007A Bonds, the Series 2007B Bonds, and the Series 2007C Bonds (collectively, the “Series 2007 Bonds”). 4.02. The Authority authorizes and requests Shorewood, Deephaven, the District and the Department and their consultants to take all steps necessary to issue refunding bonds to refund the Series 2007 Bonds, subject only to the following terms and conditions: (a) The Authority, in consultation with its municipal advisor, may issue refunding bonds on a negotiated or competitive basis, as they determine to be in the best interest of the District and the Department. (b) Authority staff and consultants are authorized to take all actions necessary to sell refunding bonds, in consultation with Shorewood, and to bring before this Board for approval the final terms of sale and all related documents, provided that the Board will authorize bids or enter into a bond purchase agreement for each series of bonds only if the refunding bonds meet a minimum net debt service savings of three percent (3.0%). 3 469840v1 MNI SH230-54 Approved by the Board of Commissioners of the Shorewood Economic Development Authority this 26th day of October, 2015. Scott Zerby, President ATTEST: William S. Joynes, Secretary 4 469840v1 MNI SH230-54 #3B MEETING TYPE Special Meeting City of Shorewood Economic Development Authority Title / Subject: Approving Post-Issuance Compliance Policy Meeting Date: October 26, 2015 Prepared by: Bruce DeJong Policy Consideration: Should the Shorewood Economic Development Authority (EDA) adopt procedures for compliance with post-issuance regulations from the Federal government? Background: There have been significant changes in the procedures for bonding, financial advisor relationships, and post-issuance compliance in the past several years. The attached policy is recommended by Kennedy & Graven – the city’s bond counsel. The policy is the same as the policy adopted by the city in conjunction with the water bond refunding back in 2013. This is the first bond issuance by the EDA after the new regulations have gone into effect so now is an appropriate time to adopt the policy for the EDA. Financial or Budget Considerations: There is no direct cost for adopting the post-issuance policy. There are costs associated with arbitrage compliance and annual reporting which we already perform, but we have already done a five year arbitrage analysis on the bonds with Ehlers & Associates so the major costs have been covered. Nothing else of any consequence is in the immediate future for the EDA. Options: The EDA Board may choose to: 1.Accept the policy as presented. 2.Make modifications and accept the revised policy. Recommendation / Action Requested: Staff recommends adoption of the Post-Issuance Compliance Procedure And Policy. Shorewood Economic Development Authority POST-ISSUANCE COMPLIANCE PROCEDURE AND POLICY FOR TAX-EXEMPT GOVERNMENTAL BONDS October 26, 2015 469862v1 MNI SH230-54 Post-Issuance Compliance Procedure and Policy for Tax-Exempt Governmental Bonds The Shorewood Economic Development Authority (the “Authority”) issues tax-exempt governmental bonds to finance capital improvements. As an issuer of tax-exempt governmental bonds, the Authority is required by the terms of Sections 103 and 141-150 of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder (the “Treasury Regulations”), to take certain actions subsequent to the issuance of such bonds to ensure the continuing tax-exempt status of such bonds. In addition, Section 6001 of the Code and Section 1.6001-1(a) of the Treasury Regulations, impose record retention requirements on the Authority with respect to its tax- exempt governmental bonds. This Post-Issuance Compliance Procedure and Policy for Tax-Exempt Governmental Bonds (the “Policy”) has been approved and adopted by the Authority to ensure that the Authority complies with its post-issuance compliance obligations under applicable provisions of the Code and Treasury Regulations. 1. Effective Date and Term. The effective date of this Policy is October 26, 2015, and shall remain in effect until superseded or terminated by the Authority. 2. Responsible Parties. The Executive Director of the Authority shall be the party primarily responsible for ensuring that the Authority successfully carries out its post-issuance compliance requirements under applicable provisions of the Code and Treasury Regulations. The Executive Director will be assisted by the staff of the Finance Department (the “Finance Department”) of the City of Shorewood, Minnesota (the “City”) and by Authority staff and officials when appropriate. The Executive Director of the Authority will also be assisted in carrying out post-issuance compliance requirements by the following organizations: (a) Bond Counsel (the law firm primarily responsible for providing bond counsel services for the Authority); (b) Municipal Advisor (the organization utilized from time to time for providing financial advisor services to the Authority); (c) Paying Agent (the person, organization, or Authority officer primarily responsible for providing paying agent services for the Authority); and (d) Rebate Analyst (the organization primarily responsible for providing rebate analyst services for the Authority). The Executive Director shall be responsible for assigning post-issuance compliance responsibilities to members of the Finance Department, staff of the Authority, Bond Counsel, Municipal Advisor, Paying Agent, and Rebate Analyst. The Executive Director shall utilize such other professional service organizations as are necessary to ensure compliance with the post-issuance compliance requirements of the Authority. The Executive Director shall provide training and educational resources to Authority staff who are responsible for ensuring compliance with any portion of the post-issuance compliance requirements of this Policy. 3. Post-Issuance Compliance Actions. The Executive Director shall take the following post- issuance compliance actions or shall verify that the following post-issuance compliance actions have been taken on behalf of the Authority with respect to each issue of tax-exempt governmental bonds issued by the Authority: 1 469862v1 MNI SH230-54 (a) The Executive Director shall prepare a transcript of principal documents (this action will be the primary responsibility of Bond Counsel). (b) The Executive Director shall file with the Internal Revenue Service (the “IRS”), within the time limit imposed by Section 149(e) of the Code and applicable Treasury Regulations, an Information Return for Tax-Exempt Governmental Obligations, Form 8038-G (this action will be the primary responsibility of Bond Counsel). (c) The Executive Director shall prepare an “allocation memorandum” for each issue of tax-exempt governmental bonds in accordance with the provisions of Treasury Regulations, Section 1.148-6(d)(1), that accounts for the allocation of the proceeds of the tax-exempt bonds to expenditures not later than the earlier of: (i) eighteen (18) months after the later of (A) the date the expenditure is paid, or (B) the date the project, if any, that is financed by the tax-exempt bond issue is placed in service; or (ii) the date sixty (60) days after the earlier of (A) the fifth anniversary of the issue date of the tax-exempt bond issue, or (B) the date sixty (60) days after the retirement of the tax-exempt bond issue. Preparation of the allocation memorandum will be the primary responsibility of the Executive Director (in consultation with Bond Counsel, and, if employed with respect to the tax-exempt issue, the Municipal Advisor). (d) The Executive Director, in consultation with Bond Counsel, shall identify proceeds of tax-exempt governmental bonds that must be yield-restricted and shall monitor the investments of any yield-restricted funds to ensure that the yield on such investments does not exceed the yield to which such investments are restricted. (e) In consultation with Bond Counsel, the Executive Director shall determine whether the Authority is subject to the rebate requirements of Section 148(f) of the Code with respect to each issue of tax-exempt governmental bonds. In consultation with Bond Counsel, the Executive Director shall determine, with respect to each issue of tax-exempt governmental bonds of the Authority, whether the Authority is eligible for any of the temporary periods for unrestricted investments and is eligible for any of the spending exceptions to the rebate requirements. The Executive Director shall contact the Rebate Analyst (and, if appropriate, Bond Counsel) prior to the fifth anniversary of the date of issuance of each issue of tax-exempt governmental bonds of the Authority and each fifth anniversary thereafter to arrange for calculations of the rebate requirements with respect to such tax-exempt governmental bonds. If a rebate payment is required to be paid by the Authority, the Executive Director shall prepare or cause to be prepared the Arbitrage Rebate, Yield Reduction and Penalty in Lieu of Arbitrage Rebate, Form 8038-T, and submit such Form 8038-T to the IRS with the required rebate payment. If the Authority is authorized to recover a rebate payment previously paid, the Executive Director shall prepare or cause to be prepared the Request for Recovery of Overpayments Under Arbitrage Rebate Provisions, Form 8038-R, with respect to such rebate recovery, and submit such Form 8038-R to the IRS. 4. Procedures for Monitoring, Verification, and Inspections. The Executive Director shall institute such procedures as the Executive Director shall deem necessary and appropriate to monitor the 2 469862v1 MNI SH230-54 use of the proceeds of tax-exempt governmental bonds issued by the Authority, to verify that certain post- issuance compliance actions have been taken by the Authority, and to provide for the inspection of the facilities financed with the proceeds of such bonds. At a minimum, the Executive Director shall establish the following procedures: (a) The Executive Director shall monitor the use of the proceeds of tax-exempt governmental bonds to: (i) ensure compliance with the expenditure and investment requirements under the temporary period provisions set forth in Treasury Regulations, Section 1.148-2(e); (ii) ensure compliance with the safe harbor restrictions on the acquisition of investments set forth in Treasury Regulations, Section 1.148-5(d); (iii) ensure that the investments of any yield- restricted funds do not exceed the yield to which such investments are restricted; and (iv) determine whether there has been compliance with the spend-down requirements under the spending exceptions to the rebate requirements set forth in Treasury Regulations, Section 1.148-7. (b) The Executive Director shall monitor the use of all bond-financed facilities in order to: (i) determine whether private business uses of bond-financed facilities have exceeded the de minimus limits set forth in Section 141(b) of the Code as a result of leases and subleases, licenses, management contracts, research contracts, naming rights agreements, or other arrangements that provide special legal entitlements to nongovernmental persons; and (ii) determine whether private security or payments that exceed the de minimus limits set forth in Section 141(b) of the Code have been provided by nongovernmental persons with respect to such bond-financed facilities. The Executive Director shall provide training and educational resources to any Authority staff who have the primary responsibility for the operation, maintenance, or inspection of bond-financed facilities with regard to the limitations on the private business use of bond-financed facilities and as to the limitations on the private security or payments with respect to bond-financed facilities. (c) The Executive Director shall undertake the following with respect to each outstanding issue of tax-exempt governmental bonds of the Authority: (i) an annual review of the books and records maintained by the Authority with respect to such bonds; and (ii) an annual physical inspection of the facilities financed with the proceeds of such bonds, conducted by the Executive Director with the assistance of any Authority staff who have the primary responsibility for the operation, maintenance, or inspection of such bond-financed facilities. 5. Record Retention Requirements. The Executive Director shall collect and retain the following records with respect to each issue of tax-exempt governmental bonds of the Authority and with respect to the facilities financed with the proceeds of such bonds: (i) audited financial statements of the Authority; (ii) appraisals, demand surveys, or feasibility studies with respect to the facilities to be financed with the proceeds of such bonds; (iii) publications, brochures, and newspaper articles related to the bond financing; (iv) trustee or paying agent statements; (v) records of all investments and the gains (or losses) from such investments; (vi) paying agent or trustee statements regarding investments and investment earnings; (vii) reimbursement resolutions and expenditures reimbursed with the proceeds of such bonds; (viii) allocations of proceeds to expenditures (including costs of issuance) and the dates and amounts of such expenditures (including requisitions, draw schedules, draw requests, invoices, bills, and cancelled checks with respect to such expenditures); (ix) contracts entered into for the construction, renovation, or purchase of bond-financed facilities; (x) an asset list or schedule of all bond-financed depreciable property and any depreciation schedules with respect to such assets or property; (xi) records of the purchases and sales of bond-financed assets; (xii) private business uses of bond-financed facilities that arise subsequent to the date of issue through leases and subleases, licenses, management contracts, research contracts, naming rights agreements, or other arrangements that provide special legal 3 469862v1 MNI SH230-54 entitlements to nongovernmental persons and copies of any such agreements or instruments; (xiii) arbitrage rebate reports and records of rebate and yield reduction payments; (xiv) resolutions or other actions taken by the governing body subsequent to the date of issue with respect to such bonds; (xv) formal elections authorized by the Code or Treasury Regulations that are taken with respect to such bonds; (xvi) relevant correspondence, including letters, faxes or emails, relating to such bonds; (xvii) documents related to guaranteed investment contracts or certificates of deposit, credit enhancement transactions, and financial derivatives entered into subsequent to the date of issue; (xviii) bidding of financial products for investment securities; (xix) copies of all Form 8038-Ts, Form 8038-Rs, and Form 8038-CPs filed with the IRS and any other forms or documents filed with the IRS; (xx) the transcript prepared with respect to such tax-exempt governmental bonds, including but not limited to (a) official statements, private placement documents, or other offering documents, (b) minutes and resolutions, orders, or ordinances or other similar authorization for the issuance of such bonds, and (c) certification of the issue price of such bonds; and (xxi) documents related to government grants associated with the construction, renovation, or purchase of bond-financed facilities. The records collected by the Executive Director shall be stored in any format deemed appropriate by the Executive Director and shall be retained for a period equal to the life of the tax-exempt governmental bonds with respect to which the records are collected (which shall include the life of any bonds issued to refund any portion of such tax-exempt governmental bonds or to refund any refunding bonds) plus three (3) years. The Executive Director shall also collect and retain reports of any IRS examination of the Authority or any of its bond financings. 6. Remedies. In consultation with Bond Counsel, the Executive Director shall become acquainted with the remedial actions (including redemption or defeasance) under Treasury Regulations, Section 1.141-12, to be utilized in the event that private business use of bond-financed facilities exceeds the de minimus limits under Section 141(b)(1) of the Code. In consultation with Bond Counsel, the Executive Director shall become acquainted with the Tax Exempt Bonds Voluntary Closing Agreement Program described in Notice 2008-31, 2008-11 I.R.B. 592, to be utilized as a means for an issuer to correct any post-issuance infractions of the Code and Treasury Regulations with respect to outstanding tax-exempt bonds. 7. Continuing Disclosure Obligations. In addition to its post-issuance compliance requirements under applicable provisions of the Code and Treasury Regulations, the Authority has agreed to provide continuing disclosure, such as annual financial information and material event notices, pursuant to a continuing disclosure certificate or similar document (the “Continuing Disclosure Document”) prepared by Bond Counsel and made a part of the transcript with respect to each issue of bonds of the Authority that is subject to such continuing disclosure requirements. The Continuing Disclosure Documents are executed by the Authority to assist the underwriters of the Authority’s bonds in meeting their obligations under Securities and Exchange Commission Regulation, 17 C.F.R. Section 240.15c2-12, as in effect and interpreted from time to time (“Rule 15c2-12”). The continuing disclosure obligations of the Authority are governed by the Continuing Disclosure Documents and by the terms of Rule 15c2-12. The Executive Director is primarily responsible for undertaking such continuing disclosure obligations and to monitor compliance with such obligations. 8. Other Post-Issuance Actions. If, in consultation with Bond Counsel, Municipal Advisor, Paying Agent, Rebate Analyst, the Executive Director, the Authority Attorney, or the Board of Commissioners, the Executive Director determines that any additional action not identified in this Policy must be taken by the Executive Director to ensure the continuing tax-exempt status of any issue of governmental bonds of the Authority, the Executive Director shall take such action if the Executive Director has the authority to do so. If, after consultation with Bond Counsel, Municipal Advisor, Paying Agent, Rebate Analyst, the Executive Director, the Authority Attorney, or the Board of Commissioners, 4 469862v1 MNI SH230-54 the Executive Director and the Executive Director determine that this Policy must be amended or supplemented to ensure the continuing tax-exempt status of any issue of governmental bonds of the Authority, the Executive Director shall recommend to the Board of Commissioners that this Policy be so amended or supplemented. 9. Taxable Governmental Bonds. Most of the provisions of this Policy, other than the provisions of Section 7, are not applicable to governmental bonds the interest on which is includable in gross income for federal income tax purposes. However, if an issue of taxable governmental bonds is later refunded with the proceeds of an issue of tax-exempt governmental refunding bonds, then the uses of the proceeds of the taxable governmental bonds and the uses of the facilities financed with the proceeds of the taxable governmental bonds will be relevant to the tax-exempt status of the governmental refunding bonds. Therefore, if there is any reasonable possibility that an issue of taxable governmental bonds may be refunded, in whole or in part, with the proceeds of an issue of tax-exempt governmental bonds, for purposes of this Policy, the Executive Director shall treat the issue of taxable governmental bonds as if such issue were an issue of tax-exempt governmental bonds and shall carry out and comply with the requirements of this Policy with respect to such taxable governmental bonds. The Executive Director shall seek the advice of Bond Counsel as to whether there is any reasonable possibility of issuing tax- exempt governmental bonds to refund an issue of taxable governmental bonds. 10. Qualified 501(c)(3) Bonds. If the Authority issues bonds to finance a facility to be owned by the Authority but which may be used, in whole or in substantial part, by a nongovernmental organization that is exempt from federal income taxation under Section 501(a) of the Code as a result of the application of Section 501(c)(3) of the Code (a “501(c)(3) Organization”), the Authority may elect to issue the bonds as “qualified 501(c)(3) bonds” the interest on which is exempt from federal income taxation under Sections 103 and 145 of the Code and applicable Treasury Regulations. Although such qualified 501(c)(3) bonds are not governmental bonds, at the election of the Executive Director, for purposes of this Policy, the Executive Director shall treat such issue of qualified 501(c)(3) bonds as if such issue were an issue of tax-exempt governmental bonds and shall carry out and comply with the requirements of this Policy with respect to such qualified 501(c)(3) bonds. 5 469862v1 MNI SH230-54