10-13-1997 EDA Packet - Laserfiche WebLink

Home Search

Line Lakes Economic Development Authority, Minnesota October 9, 1997 9. Rebate Requirements 10. Bona Fide Debt Service Fund 11. Economic Life 12. Continuing Disclosure which are bank -qualified typically receive slightly lower interest rates than issues which are not bank -qualified. Proceeds of the Bonds are subject to the federal arbitrage rebate requirements. However, investments on the bond proceeds will be exempt from rebate if the EDA can meet either the two-year or eighteen -month spend -down provisions. The EDA must maintain a bona fide debt service fund, including the reserve account being funded from proceeds of the Bonds, or be subject to yield restriction or pay back to the federal government excess investment earnings. A bona fide debt service fund is a fund for which there is an equal matching of revenue to debt service expense, with a carry-over 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 reserve account will meet arbitrage requirements so long as it is the lesser of 10% of principal, 100% of maximum annual principal and interest or 125% of the average annual principal and interest requirement. The reserve requirement is expected to be at maximum annual principal and interest. The average life of the bonds cannot exceed 120% of the economic life of the project to be financed. The economic life of this project is 40-50 years, therefore it is within the economic life requirements. The new SEC rules require the City, as the obligated party, to undertake an annual update of its Official Statement information and report any material events to the national repositories. Springsted provides continuing disclosure services and we have previously forwarded to City staff information relating to these services. 13. Attachments Debt Service Schedule Terms of Proposal Page 2