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• <br /> AIQEN HILLS <br /> MEMORANDUM <br /> DATE: March 13, 2009 <br /> TO: Financial Planning and Analysis Committee <br /> FROM: Sue Iverson, Finance Director <br /> SUBJECT: Policy Discussions—Investment and Arbitrage/Post Issuance <br /> Compliance <br /> BACKGROUND <br /> • Council directives have been that the Financial Planning and Analysis Committee look at fiscal policies <br /> and recommend changes. The Committee previously worked on an investment policy and is currently <br /> reviewing it to recommend changes. The City has never had a policy on Arbitrage or Post Issuance <br /> Compliance in the past and one needs to be established in order to be compliant. <br /> DISCUSSION <br /> I attended a session on Arbitrage Regulatory Issues and Post Issuance Compliance in February. Recent <br /> initiatives by the IRS have been to send compliance questionnaires to state and local governments and do <br /> formal audits. They are planning to hire a significant amount of new field workers to perform these <br /> audits. Although the City of Arden Hills currently only has one bond issue outstanding,we also have two <br /> conduit debt issues outstanding. In the course of attending these seminars, I found that we are liable for <br /> the reporting and record keeping for conduit debt also. This has been an area in the past that cities have <br /> not paid much attention to or it was thought that they had no liability in,but IRS regulations hold that the <br /> City is liable for these issues. Gail Robertson from Ehlers & Associates, Inc. will be in attendance to <br /> present sample policies and also to use our outstanding conduit debt issues as case studies to show how <br /> our policies should be developed and explain why. It will also govern how we determine if we will make <br /> future conduit offerings and the fees and trustee agreements we will require. <br /> Last month Lynn Cornwell from Wells Fargo Brokerage attended the meeting to give recommendations <br /> on suggested changes to the current investment policy. At this meeting there were some questions on the <br /> 4M Fund and the committees has in the past requested someone from this fund come and speak to the <br /> group. Pat Harris will be present to give information on this fund and to answer any questions the <br /> committee will have. This information will be valuable to the committee to use in recommending <br /> • changes to the investment policy. <br /> \Ahdocsl\ah\AHdata\Admin\Committees&Commissions\FPAC\3-13-09.doc <br />