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<br /> <br /> <br />Northland Securities, Inc. Page 11 <br />Attachment 5 - Risk Factors <br />Property Taxes: Property tax levies shown in this Finance Plan are based on projected debt <br />service and other revenues. Final levies will be set based on the results of sale. Levies should be <br />reviewed annually and adjusted as needed. The debt service levy must be included in the <br />preliminary levy for annual Truth in Taxation hearings. Future Legislative changes in the <br />property tax system, including the imposition of levy limits and changes in calculation of <br />property values, would affect plans for payment of debt service. Delinquent payment of <br />property taxes would reduce revenues available to pay debt service. <br />Special Assessments: Special assessments for the financed projects have not been levied at this <br />time. This Finance Plan is based on the assumptions listed earlier in this report. Changes in the <br />terms and timing for the actual assessments will alter the projected flow of funds for payment of <br />debt service on the Bonds. Also, special assessments may be prepaid. It is likely that the income <br />earned on the investment of prepaid assessments will be less than the interest paid if the <br />assessments remained outstanding. Delinquencies in assessment collections would reduce <br />revenues needed to pay debt service. The collection of deferred assessments, if any, has not <br />been included in the revenue projections. Projected assessment income should be reviewed <br />annually and adjusted as needed. <br />General: In addition to the risks described above, there are certain general risks associated with <br />the issuance of bonds. These risks include, but are not limited to: <br />• Failure to comply with covenants in bond resolution. <br />• Failure to comply with Undertaking for continuing disclosure. <br />• Failure to comply with IRS regulations, including regulations related to use of the proceeds <br />and arbitrage/rebate. The IRS regulations govern the ability of the City to issue its bonds as <br />tax-exempt securities and failure to comply with the IRS regulations may lead to loss of tax- <br />exemption. <br /> <br />