05-11-2015 Council Packet - Laserfiche WebLink

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Continuing Disclosure: Because the City has more than $10,000,000 in outstanding debt (including this issue) and this issue is over $1,000,000, the City will be agreeing to provide certain updated Annual Financial Information and its Audited Financial Statement annually as well as providing notices of the occurrence of certain "material events" to the Municipal Securities Rulemaking Board (the "MSRB"), as required by rules of the Securities and Exchange Commission (SEC). The City is already obligated to provide its financial statements annually and has contracted with Ehlers to prepare and file the reports. Because the City will have over $10,000,000 in total outstanding principal amount of debt, the City will now be obligated to provide more in-depth reports on an annual, and may do this on their own or contract with Ehlers to prepare and file the reports. Arbitrage Monitoring: Because the Bonds are tax-exempt securities/tax credit securities, the City must ensure compliance with certain Internal Revenue Service (IRS) rules throughout the life of the issue. These rules apply to all gross proceeds of the issue, including initial bond proceeds and investment earnings in construction, escrow, debt service, and any reserve funds. How issuers spend bond proceeds and how they track interest earnings on funds (arbitrage/yield restriction compliance) are common subjects of IRS inquiries. Your specific responsibilities will be detailed in the Nonarbitrage Certificate prepared by your Bond Attorney and provided at closing. We recommend that you regularly monitor compliance with these rules and/or retain the services of a qualified firm to assist you. Risk Factors: Advance Refunding: The Bonds are being issued for the purpose of "advance" refunding prior City debt obligations. Only one advance refunding of an original tax-exempt debt obligation is permitted under current IRS rules. This refunding is being undertaken based in part on the following assumptions: • Since the new Bonds will extend the "call" date for this debt, we are assuming that the City does not expect to have revenues available to pre -pay the current obligations prior to this new call date, The City also recognizes that if tax increments are insufficient from annual revenues, the City will need to use other funds to supplement debt service. Other Service Providers: This debt issuance will require the engagement of other public finance service providers. This section identifies those other service providers, so Ehlers can coordinate their engagement on your behalf. Where you have previously used a particular firm to provide a service, we have assumed that you will continue that relationship. For services you have not previously required, we have identified a service provider. Fees charged by these service providers will be paid from proceeds of the obligation, unless you notify us that you wish to pay them from other sources. Our pre -sale bond sizing includes a good faith estimate of these fees, so their final fees may vary. If you have any questions pertaining to the identified service providers or their role, or if you would like Presale Report City of Little Canada, Minnesota Page 3