HomeMy WebLinkAboutResolution 2015 (30) Resolution No. 30 (2015)
ST x 01.,w Y TY RESOLUTION APPROVING POST-ISSUANCE TAX
' '° ''�° COMPLIANCE POLICIES AND PROCEDURES
1 WHEREAS, St. Croix County, Wisconsin (the "Issuer") from time to time issues tax-
2 exempt or tax-advantaged governmental bonds or notes (the "Obligations") to finance capital
3 projects; and
4
5 WHEREAS, under Sections 103 and 141 to 150 of the Internal Revenue Code of 1986, as
6 amended (the "Code") and related regulations, the Issuer is required to take certain actions after
7 the issuance of such Obligations to ensure that interest on those Obligations continues to qualify
8 for tax-exempt or tax-advantaged treatment; and
9
10 WHEREAS, the Issuer has determined that it is in its best interest to adopt written
11 procedures to set forth the steps that the Issuer will take to meet its compliance responsibilities
12 which procedures are attached hereto and incorporated herein by this reference (the "Policy").
13
14 THEREFORE, be it resolved by the County Board of the Issuer that:
15
16 1. the Policy attached hereto is hereby approved;
17 2. the County staff is authorized to take all actions necessary to carry out the Policy; and
18 3. the County's Finance Director is designated as the County's Compliance Officer under
19 the Policy.
Legal-Fiscal-Administrative Approvals:
Legal Note: None
Fiscal Impact: There is no direct cost to the County of implementing this policy. The costs of
arbitrage compliance, as currently practiced and as called for under this policy, may
include hiring our financial advisor to perform the arbitrage calculations.
JA
4 A01,00
Szoet.Can,Corps ounscl 8101/2015" hM D I S rt
Fiff&TEO j34on,County /2015
08/19/15 Administration Committee APPROVED
......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ..........
RESULT: APPROVED [UNANIMOUS]
MOVER: Jill Ann Berke, Supervisor
SECONDER: Judy Achterhof, Supervisor
AYES: Travis Schachtner, Jill Ann Berke, Ron Kiesler, Judy Achterhof
EXCUSED: Roy Sjoberg
Vote Confirmation.
htaer,Su W5120I5
St. Croix County Board of Supervisors Action:
Roll Call -Vote Requirement— Majority of Supervisors Present
......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ..........
RESULT: ADOPTED [UNANIMOUS]
MOVER: Travis Schachtner, Supervisor
SECONDER: Jill Ann Berke, Supervisor
AYES: Schachtner, Ring, Babbitt, Novotny, Sjoberg, Koch, Nelson, Berke, Ostness,
Larson, Hansen, Kiesler, Peterson, Anderson, Achterhof, Leibfried
ABSENT: Chris Kilber, Andy Brinkman, William Peavey
This Resolution was Adopted by the St. Croix County Board of Supervisors on September 1, 2015
Cindy Campbell, County Clerk
Post-Issuance Tax Compliance Procedures For Tax-Exempt and Tax-
Advantaged Bonds
Adopted: , 2015
The purpose of these Post-Issuance Tax Compliance Procedures is to establish policies and
procedures in connection with tax-exempt or tax-advantaged obligations (the"Bonds")issued by
St. Croix County, Wisconsin (the"Issuer") so as to maximize the likelihood that all applicable
post-issuance requirements of the Internal Revenue Code of 1986, as amended(the "Code") and
applicable Treasury Regulations (the "Regulations")needed to preserve the tax-exempt or tax-
advantaged status of the Bonds are met. The Issuer reserves the right to use its discretion as
necessary and appropriate to make exceptions or create additional provisions as circumstances
warrant. The Issuer also reserves the right to change these policies and procedures from time to
time.
General
Proceeds of the Issuer's Bonds are used to finance certain facilities and equipment. Federal tax
law limitations apply to the Issuer's Bonds. These limitations apply throughout the life of the
outstanding Bonds. Some of these "over the life"limitations relate to the investment of proceeds
of the Bonds, and others relate to the use and expenditure of the proceeds of the Bonds. A failure
to meet these"over the life"limitations at any time during the life of the Bonds could result in
the retroactive and prospective loss of the tax-exempt or tax-advantaged status of the Bonds or
the imposition of additional taxes or assessments on the Issuer.
The County Board of the Issuer has the overall, final responsibility for monitoring whether the
Issuer is in compliance with post-issuance federal tax requirements for the Issuer's Bonds.
However, the County Board assigns to the Finance Director(the"Compliance Officer") the
primary operating responsibility to monitor the Issuer's compliance with post-issuance federal
tax requirements for the Issuer's Bonds.
The Compliance Officer shall be aware of options for voluntary corrections for failure to comply
with post-issuance compliance requirements (such as remedial actions under Section 1.141-12 of
the Regulations and the United States Treasury's Tax-Exempt Bonds Voluntary Closing
Agreement Program) and take such corrective action when necessary and appropriate.
The Compliance Officer shall review post-issuance compliance procedures and systems on a
periodic basis, but not less than annually.
Post-Issuance Compliance Requirements
External Advisors /Documentation
The Issuer shall consult with bond counsel and other legal counsel and advisors, as needed,
throughout the Bond issuance process to identify requirements and to establish procedures
necessary or appropriate so that the Bonds will continue to qualify for tax-exempt or tax-
advantaged status. The Issuer also shall consult with bond counsel and other legal counsel and
advisors, as needed, following issuance of the Bonds to ensure that all applicable post-issuance
requirements in fact are met. This shall include, without limitation, consultation in connection
with any potential changes in use of Bond-financed or refinanced assets.
The Issuer shall be responsible to determine (or obtain expert advice to determine)whether
arbitrage rebate calculations have to be made for the Bond issue. If it is determined that such
calculations are or are likely to be required, the Issuer shall engage expert advisors (each a
"Rebate Service Provider") to assist in the calculation of arbitrage rebate payable in respect of
the investment of Bond proceeds, or else shall ensure that it has adequate financial, accounting
and legal resources of its own to make such calculations. The Issuer shall make any rebate
payments required on a timely basis.
The investment of Bond proceeds shall be managed by the Issuer in accordance with applicable
statutory provisions. The Issuer shall maintain adequate records regarding the investments and
transactions involving Bond proceeds.
Arbitrage Yield Restriction and Rebate Requirements
The Compliance Officer shall be responsible for overseeing compliance with arbitrage yield
restriction and rebate requirements under federal tax regulations, as follows:
1) Monitor compliance with the applicable"temporary period" (as defined in the Code and
Regulations) exceptions for the expenditure of Bond proceeds, and provide for yield restriction
on investments including "yield reduction payments" (as defined in the Code and Regulations)
where applicable.
2) Ensure that investments acquired with Bond proceeds are purchased at fair market value. In
determining whether an investment is purchased at fair market value, any applicable safe harbor
under the Code and Regulations may be used.
3) In the case of any issue of Bonds for an "advanced refunding" (as defined in the Code and
Regulations), coordinate with the Issuer's financial advisor and any escrow agent to arrange for
the purchase of the refunding escrow securities, arrange for the computation of the yield on such
escrow securities by an outside verification agent, and monitor compliance with applicable yield
restrictions.
4) If at the time of Bond issuance, based on reasonable expectations set forth in the tax
certificate/agreement executed at the time of Bond issuance(the "Tax Certificate"), it appears
likely that the Bond issue will qualify for an exemption from the rebate requirement, the Issuer
may defer taking any of the actions set forth in subsection (5). Not later than the time of
2
completion of construction or acquisition of the project (or, in the case of a refunding, the
redemption of the refunded bonds), and depletion of all funds from the borrowed money fund,
the Issuer shall make a determination if expenditure of the Bond proceeds qualified for
exemption from the rebate requirements based on the "small issuer" exception or spending
within 6 months, 18 months or 24 months after issuance. If a rebate exemption is determined to
be applicable, the Issuer shall prepare and keep in the permanent records of the Bond issue a
memorandum evidencing this conclusion together with records of expenditure to support such
conclusion. If the transaction does not qualify for rebate exemption, the Issuer shall initiate the
steps set forth in (5)below.
5) If at the time of Bond issuance it appears likely that arbitrage rebate calculations will be
required, or upon determination that calculations are required pursuant to (4) above, the Issuer
shall:
• engage the services of a Rebate Service Provider and,prior to each rebate calculation
date, deliver periodic statements concerning the investment of Bond proceeds to the
Rebate Service Provider;
• provide to the Rebate Service Provider additional documents and information reasonably
requested by the Rebate Service Provider;
• monitor efforts of the Rebate Service Provider;
• assure payment of required rebate amounts, if any, no later than 60 days after each 5-year
anniversary of the issue date of the Bonds, and no later than 60 days after the last Bond of
each issue is redeemed;
• during the construction period of each capital project financed in whole or in part by
Bonds, monitor the investment and expenditure of Bond proceeds and consult with the
Rebate Service Provider to determine compliance with any applicable exceptions from
the arbitrage rebate requirements during each 6-month spending period up to 6 months,
18 months or 24 months, as applicable, following the issue date of the Bonds; and
• retain copies of all arbitrage reports as described below under"Record Keeping
Requirements."
• in lieu of engaging an outside Rebate Service Provider, the Issuer may make a
determination that it has sufficient capabilities using its own personnel, supported by its
regular accounting and legal advisers, to be able to make the required rebate calculations.
Such determination shall be evidenced in writing with specific reference to the personnel
and advisers to carry out the calculations, and such written determination shall be
maintained in the records of the bond transaction.
3
Use of Bond Proceeds and Bond-Financed or Refinanced Assets:
The Compliance Officer shall be responsible for:
• monitoring the use of Bond proceeds (including investment earnings and including
reimbursement of expenditures made before bond issuance) and the use of Bond-financed
or refinanced assets (e.g., facilities, furnishings or equipment) throughout the term of the
Bonds to ensure compliance with covenants and restrictions set forth in the Tax
Certificate relating to the Bonds;
• maintaining records identifying the assets or portion of assets that are financed or
refinanced with proceeds of each issue of Bonds (including investment earnings and
including reimbursement of expenditures made before bond issuance), including, if
necessary a final reallocation of Bond proceeds within 18 months after each project
financed by the Bonds is placed in service in accordance with Section 1.148-6(d) of the
Regulations;
• consulting with bond counsel and other legal counsel and advisers in the review of any
change in use of Bond-financed or refinanced assets to ensure compliance with all
covenants and restrictions set forth in the Tax Certificate relating to the Bonds;
• conferring at least annually with personnel responsible for Bond-financed or refinanced
assets to identify and discuss any existing or planned use of Bond-financed or refinanced
assets, to ensure that those uses are consistent with all covenants and restrictions set forth
in the Tax Certificate relating to the Bonds;
• to the extent that the Issuer discovers that any applicable tax restrictions regarding use of
Bond proceeds and Bond-financed or refinanced assets will or may be violated,
consulting promptly with bond counsel and other legal counsel and advisers to determine
a course of action to remediate all nonqualified bonds, if such counsel advises that a
remedial action is necessary;
All relevant records and contracts shall be maintained as described below.
Information Reporting
The Compliance Officer shall confirm that bond counsel has filed the applicable information
report(e.g., Form 8038-G, Form 8038-CP, Form 8038) for each issue of Bonds with the Internal
Revenue Service on a timely basis.
Qualified Tax-Exempt Obligations_
If the Issuer issues "qualified tax-exempt obligations"in any year, the Compliance Officer shall
monitor all tax-exempt financings (including lease purchase arrangements and other similar
financing arrangements and conduit financings on behalf of 501(c)(3) organizations) to assure
that the"small issuer"limit(currently, $10,000,000)is not exceeded.
4
Federal Subsidy Payments
The Compliance Officer shall be responsible for the calculation of the amount of any federal
subsidy payments and the timely preparation and submission of the applicable tax form and
application for federal subsidy payments for tax-advantaged bonds such as Build America
Bonds, New Clean Renewable Energy Bonds, Qualified Energy Conservations Bonds and
Qualified School Construction Bonds.
Reissuance
The following policies relate to compliance with rules and regulations regarding the reissuance
of Bonds for federal law purposes.
The Compliance Officer will identify and consult with bond counsel regarding any post-issuance
change to any terms of an issue of Bonds which could potentially be treated as a reissuance for
federal tax purposes.
Record Keeping Requirement
The Compliance Officer shall be responsible for maintaining the following documents for the
term of each issue of Bonds (including refunding Bonds, if any)plus at least six years:
• a copy of the Bond closing transcript(s) and other relevant documentation delivered to the
Issuer at or in connection with closing of the issue of Bonds;
• a copy of all material documents relating to capital expenditures financed or refinanced
by Bond proceeds, including (without limitation) construction contracts,purchase orders,
invoices, requisitions and payment records, as well as documents relating to costs
reimbursed with Bond proceeds and records identifying the assets or portion of assets that
are financed or refinanced with Bond proceeds, including a final allocation of Bond
proceeds; and
• a copy of all records of investments, investment agreements, arbitrage reports and
underlying documents, in connection with any investment agreements, and copies of all
bidding documents, if any.
While document retention is typically accomplished through the maintenance of hard copies,
records may be kept in electronic format so long as applicable requirements, such as Revenue
Procedure 97-22, are satisfied. IRS bond agents have been instructed to request documents and
information in electronic format. IRM 4.81.5.7.2.4 (11-01-09). For this reason it is advisable to
retain records relating to the Issuer's bonds in electronic format whenever practical.
Continuing Disclosure
Under the provisions of SEC Rule 15c2-12 (the"Rule"),underwriters are required to obtain an
agreement for ongoing disclosure in connection with the public offering of securities in a
principal amount in excess of$1,000,000. Unless the Issuer is exempt from compliance with the
Rule as a result of certain permitted exemptions, the Transcript for each issue of Bonds will
5
include an undertaking by the Issuer to comply with the Rule. The Compliance Officer will
monitor compliance by the Issuer with its undertakings, which may include the requirement for
an annual filing of operating and financial information and will include a requirement to file
notices of listed"material events."
Conduit Bond Financings
In conduit bond financings, such as industrial revenue bonds or Midwestern Disaster Area
Bonds, the Issuer is not in a position to directly monitor compliance with arbitrage requirements
and qualified use requirements because information concerning and control of those activities
lies with the private borrower. The Issuer's policy in connection with conduit financings is to
require that the bond documents in such financings impose on the borrower(and trustee or other
applicable party)responsibility to monitor compliance with qualified use rules and arbitrage and
other federal tax requirements and to take necessary action if remediation of nonqualified bonds
is required.
Education Policy
It is the policy of the Issuer that the Compliance Officer and his or her staff, as well as the
principal operating officials of those departments of the Issuer for which property is financed
with Bond proceeds should be provided with education and training on federal tax requirements
applicable to tax-exempt and tax-advantaged bonds. The Issuer recognizes that such education
and training is vital as a means of helping to ensure that the Issuer remains in compliance with
those federal tax requirements in respect of its Bonds. The Issuer will therefore enable and
encourage those personnel to attend and participate in educational and training programs offered
by professional trade associations and other entities with regard to the federal tax requirements
applicable to tax-exempt and tax-advantaged bonds.
6