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Related Considerations: <br /> • Bank Qualified - because total tax - exempt debt issued by the City in calendar year <br /> 2013 is not expected to be more than $10 million, the bonds will be designated as <br /> "bank qualified" obligations pursuant to Federal Tax Law. <br /> • Arbitrage Compliance — <br /> o Project Construction Fund — All tax exempt issues are subject to <br /> federal rebate requirements which require all arbitrage earned to be <br /> rebated to the U.S. Treasury. A rebate exemption the City expects to <br /> qualify for is the "small issuer exemption." <br /> o Debt Service Fund — The City must maintain a bona fide debt service <br /> fund for the bonds or be subject to yield restriction in the debt service <br /> fund. A bona fide debt service fund involves an equal matching of <br /> revenues to debt service expense with a balance forward permitted <br /> equal to the greater of the investment earnings in the fund during that <br /> year or 1/12 of the debt service of that year. <br /> • Book Entry - The Bonds will be global book entry with Northland Trust Inc. designated as <br /> the paying agent. As "paperless" bonds, you will avoid the costs of bond printing and <br /> annual registrar charges. The Paying Agent will invoice you for the interest <br /> semiannually and on an annual basis for the principal coming due. <br /> • Continuing Disclosure - The Series 2013A Bonds are subject to the Securities and <br /> Exchange Commission's continuing disclosure requirements. <br /> Page 3 <br /> NORTHLAND 0SECURITIES <br />