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HomeMy WebLinkAbout458SA_CCv0001.pdf RESOLUTION NO. 458 A RESOLUTION OF THE SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF REDLANDS APPROVING POST ISSUANCE COMPLIANCE PROCEDURES FOR BONDS BE IT RESOLVED BY THE BOARD OF THE SUCCESSOR AGENCY OF THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF REDLANDS AS FOLLOWS: Section 1. The Successor Agency to the Former Redevelopment Agency of the City of Redlands hereby adopts the Post Issuance Compliance Procedures for Bonds attached hereto as Exhibit"A." ADOPTED, SIGNED AND APPROVED this 5th day of February, 2013. Pete�AgLuiar;,�C�hairperson ATTEST: Sam Irwin, Age Secretary 1, Sam Irwin, Secretary of the Successor Agency,hereby certify that the foregoing Resolution was duly adopted by the Agency Board at a special meeting thereof held on the 5th day of February,2013, by the following vote: AYES: Members Harrison,Foster, Gilbreath; Chairman Aguilar NOES: None ABSTAIN: None ABSENT: Member Gardner Sam Irwin, Agency Secretary f-'tccierkiResolution!iNREDEVELk)PkIENT-SUCCESSOR AGENCY\458 Post Issuance Comphance.water,wastewater,revenue refunding honds.2,5,13c.doe I EXHIBIT AA! SUCCESSOR AGENCY l'1 BOND COMPLIANCE POLICIES AND PROCEDURES These Bond Compliance Policies and Procedures have been initially approved by the Board of the Successor Agency to the former Redevelopment Agency of the City of Redlands (the "Successor Agency'l, on _,2413. Statement of Purpose:Summary The Redevelopment Agency of the City of Redlands(the"Redevelopment Agency") has heretofore issued debt obligations eligible for tax benefits under federal and California law for which the Successor Agency is now responsible and the Successor Agency may, from time to time, finance its capital improvements and operations through the issuance of debt obligations that are eligible for tax benefits under federal and California law. Such obligations may include tax exempt bonds and/or bonds eligible for tax credits(direct subsidies to the Successor Agency or tax credits to bond owners).All such obligations are refereed to herein as"Agency Bonds,"whether in the form of tax allocation bonds, general obligation bonds, revenue bonds, bond anticipation notes,tax anticipation notes, lease-purchase obligations, installment-purchase obligations or otherwise. The purpose of these policies and procedures is to ensure that the requirements of the federal and California law necessary to preserve the tax advantages of Agency Bonds are continuously complied with for the requisite periods. This document contains two primary components: The Successor Agency Bond Compliance Policies (the"Policies"), which are general statements of the goals of the Successor Agency with respect to compliance with the federal and California law applicable to Agency Bonds;and The Successor Agency Bond Compliance Procedures (the "Procedures), which are specific operational procedures by which the Successor Agency intends to ensure,on a continuing basis,that its issuance,payment of debt service on,and expenditure and investment of the proceeds of Agency Bonds are and remain in compliance with the federal and California law applicable to Agency Bonds. The Policies may be modified, expanded, abridged, or otherwise amended only by the Board of the Successor Agency upon consultation with the Executive Director, General Counsel to the Successor Agency and the Successor Agency's bond counsel("Bond Counsel'. The Chief Financial Officer will be responsible for ensuring that Agency Bonds comply with federal and California law applicable to Agency Bonds and will develop and implement the Procedures.The Procedures may be modified,expanded,abridged,or otherwise amended by the Chief Financial Officer in consultation with Bond Counsel, in order to: (a)ensure efficiency of administration; (b)establish and maintain appropriate assignments and training of staff responsibility; (c)reflect changes in the Successor Agency's system of accounting, financial controls, procurement practices, or other internal procedures and practices; (d)respond to changes in law or interpretation that may, from time to time, be reported to the Successor Agency by Bond Counsel; or (e)otherwise ensure compliance with the Policies in the most efficient and effective manner. 09960.0000t11779M 1.1 PART I: SUCCESSOR AGENCY BOND COMPLIANCE POLICIES A. Investment and Expenditure of Bond Proceeds.The Successor Agency's system of internal controls and accounting will be capable of tracking the investment and expenditure of proceeds of Agency Bonds and other amounts subject to special requirements, and the allocation of such proceeds and other amounts to Successor Agency facilities. Appropriate coding will be developed to identify Successor Agency facilities (or portions thereof) financed or refinanced by Agency Bonds. Such procedures will ensure that such proceeds are expended only for the purposes authorized by the ordinance and,as applicable,indenture,pursuant to which such bonds were issued and in compliance with the Tax Certificate relating to the Agency Bonds or other instructions of Bond Counsel. B. Bond-Financed Facilities.The Successor Agency will track the use of facilities(or portions thereof) financed or refinanced by Agency Bonds in the private trades or businesses of non-governmental persons. Arrangements for the sale, disposition, lease, management or other use of substantial portions(more than I*/o)of facilities financed or refinanced by Agency Bonds with a term of(i)less than 200 days will be subject to prior review and approval by the Chief Financial Officer, and (ii)equal to or greater than 200 days will be subject to prior review and approval by the Chief Financial Officer and Bond Counsel.The Chief Financial Officer will track the aggregate annual private use(if any)of facilities provided by Agency Bonds. C. Periodic Review.The Successor Agency will periodically review compliance with the requirements of the federal and California law necessary to preserve the tax advantages of such Agency Bonds. Such reviews should include final allocations of proceeds not later than IS months after completion of bond-financed facilities and annual reviews to ensure private business use of bond financed facilities does not exceed allowable levels. Such annual review should be conducted in connection with the preparation of the Successor Agency's audited financial statements. D. Potential Nm-compliance. Should the Chief Financial Officer, upon any animal review or otherwise,discover non-compliance with any requirements of federal or California law necessary to preserve the tax advantages of such Agency Bonds, the Chief Financial Officer will identify Procedures which will include steps to be taken, in concert with Bond Counsel,to remedy any such non-compliance. E. Retention of Professionals,Rebate Analyst.The Successor Agency will engage such professionals or consultants as are necessary, in the judgment of the Chief Financial Officer, to ensure that the requirements of federal and California law necessary to preserve the tax advantages of such Agency Bonds are timely met, including, without limitation, the requirement to compute and pay rebatable arbitrage to the United States government or to confirm an exception thereto. The Chief Financial Officer will ensure that all information reports or other returns or filings with the United states Department of Treasury or Internal Revenue Service timely will be filed on behalf of the Successor Agency. F. Purchase of Investments.All investments of the proceeds of Agency Bonds will be purchased at Fair Market Value,as defined in the federal tax laws, and will comply with the requirements of federal tax law relating to yield restriction as advised by Bond Counsel. G. Credit Enhancement Transactions. The Chief Financial Officer will consult with Bond Counsel prior to engaging in any post-issuance credit enhancement transactions(i.e.,bond insurance or letters of credit)or hedging transactions(i.e.,interest rate swaps)relating to any Agency Bonds. H. Subsidy Payments. The Chief Financial Officer will implement proper procedures to ensure that any federal subsidy payable in respect of any direct-pay tax credit bonds is timely transmitted to the Policies—Page I of 2 09960.0000017799241.1 appropriate account of the Successor Agency including the timely filing of any required return or other documentation. I. Post-Issuance Modifications. The Chief Financial Officer will consult with Bond Counsel prior to any modification of the interest rate, maturity date, or other material terms of any outstanding Agency Bonds. I Records Retention The Successor Agency will retain records sufficient to demonstrate compliance with the requirements of federal and California law necessary to preserve the tax advantages of such Agency Bonds for the period required by law, presently understood to be the life of the debt obligations or any succeeding refunding obligations plus 3 years. The Foregoing Policies were adopted on 2413. Executive Director Successor Agency to the former Redevelopment Agency of the City of Redlands Policies—Page 2 of 2 09960.0000011798141.1 SUCCESSOR AGENCY BOND PROCEDURES These Procedures are organized with reference to the applicable lettered paragraphs in the Policies. Certain of these Procedures assign responsibilities to named officials of the Successor Agency. The named officials may delegate certain assigned responsibilities but will remain responsible for compliance with these Procedures and assurance of adequate training of Successor Agency personnel assigned responsibilities hereunder. The official with ultimate responsibility for compliance with the Policies and Procedures will be the Executive Director. A summary of the initial responsibility assignments appears as ExUbit A to these Procedures. Policy Investment and Expenditure of Bond Proceeds. Imdemeq&C ft 1. The Chief Financial Officer will charge capital expenditures that are financed by debt to the corresponding capital projects fiord.Each project will have a specific fiend number used to track that project,and discrete expenditures will be finther categorized by project location (by street address or name of facility)and functional description of financed improvement. 2. The Purchasing Services Manager will enter purchase orders and the Chief Financial Officer will pay and capture such purchase orders in the general ledger by the specific account code. 3. The Purchasing Services Manager will electronically scan, file and retain all purchase orders and invoices by vendor, check number, check date, and purchase order number, if applicable. 4. Until final allocation of bond proceeds, on a monthly basis, at a minimum, the Chief Financial Officer will analyze each project for expenditures and will summarize such expenditures on a spreadsheet showing the year-to-date expenditures for that project and will identify facilities or equipment financed or refinanced by Agency Bonds("Bond Financed Facilities"). A copy of the Successor Agency's transaction activity report and/or summary report by account code generated from the general ledger will be used to back up this spreadsheet and filed with that spreadsheet. 5. The Chief Financial Officer will ensure that the investment of all proceeds of Agency Bonds is tracked by fund or account (e.g., debt service fund, debt service reserve fund, project or construction fund,etc.)and investment yield. Policy B: Bond-Financed Facilities. Imy&mendnr Pmcedures 1. The Chief Financial Officer will meet at least annually and coordinate with the Executive Director to review and evaluate existing or pending sales, leases, management contracts, research contracts, or other special legal entitlements that relate to the Successor Agency's real or personal property(collectively,"Use Arrangements"). 2. The Chief Financial Officer will be responsible for determining whether any Use Arrangement relates to Bond Financed Facilities. If so, the Chief Financial Officer will Procedures—Page I of 4 09960M00017798241.1 consult with the General Counsel to the Successor Agency and solicit advice concerning the Use Arrangement. If the term of the Use Arrangement relating to any Bond Financed Facilities(with any extensions at the sole option of the counterparty)exceeds 200 days,the Chief Financial Officer and the General Counsel to the Successor Agency will also consult Bond Counsel for advice prior to execution of the Use Arrangement. 3. The General Counsel to the Successor Agency will notify the Chief Minancial Officer upon receipt of any Use Arrangements submitted for approval for any Bond Financed Facilities. Policy C Periodic Review. ]*ykwenmWr Procedures: 1. Promptly after the adoption of the Policy, the Chief Financial Officer will cause an evaluation of tax compliance to be undertaken for each outstanding issue of Agency Bonds (the "Initial Evaluation'). Upon the completion of the Initial Evaluation, the Chief Financial Officer will prepare a report to the Executive Director on the results of the Initial Evaluation(the"Initial Report)which will identify all Agency Bonds then outstanding and the Bond Financed Facilities allocable to each such issue of Agency Bonds. The Initial Report will express the findings of the Chief Financial Officer whether each outstanding issue of Agency Bonds satisfies the requirements of the Policy and will contain (A)a spreadsheet setting forth any Use Arrangement with respect to any Bond Financed Facilities and the Agency Bonds to which they relate, and (B)a statement that any arbitrage rebate then due has properly been paid or that an exception or exemption from such payment is available. 2. The Chief Financial Officer annually will cause a follow-up evaluation of tax compliance to be undertaken for each outstanding issue of Agency Bonds (the"Annual Evaluation") with the same objectives and scope as the Initial Evaluation and will provide to the Executive Director a report(the"Annual Report')of the findings of the Annual Evaluation and an updated spreadsheet concerning private business use for each issue of Agency Bonds. Such allocation may be conducted in connection with the preparation of the Successor Agency's audited financial statements for the fiscal year in which the final expenditure was made. 3. Not later than 18 months after completion of any Bond Financed Facilities, the Chief Financial Officer will make and retain a final allocation of the expenditure of proceeds of Agency Bonds and other amounts used to finance such improvements. Policy D Potential Noncompliance. ImdemadMg Procedures 1. If the Initial Evaluation or any Annual Evaluation discloses potential non-compliance with the tax requirements applicable to any issue of outstanding Agency Boni* the Chief Financial Officer will promptly consult with the General Counsel to the Successor Agency and Bond Counsel. Such consultation will consider whether the evaluations were properly performed and whether any amendments to Use Arrangements, adjustments to allocation methodologies, mixed financing sources, or other accounting techniques may avoid non- compliance. Procedures—Page 2 of 4 09960.00000\7799241.1 2. If the Successor Agency determines after consultation with counsel that non-compliance has occurred, the Chief Financial Officer will promptly consult Bond Counsel concerning the ability of the Successor Agency to remedy the non-compliance under applicable IRS regulations or to seek a voluntary closing agreement. Policy F,: Retention of Professionals;Rebate Analyst. Imnlementina Procedures: 1. If the Successor Agency determines that any of its outstanding Agency Bonds are not exempt from rebate, the Successor Agency will engage an arbitrage rebate firm as its arbitrage rebate computation agent (the "Rebate Analyst"}. The Chief Financial Officer will ensure that records of investment and expenditure of the proceeds of Agency Bonds are timely delivered to the Rebate Analyst and that the Rebate Analyst prepares annual codon reports that advise the Successor Agency of any rebatable arbitrage accrued with respect to any such bonds. 2. The Chief Financial Officer will ensure that the Rebate Analyst timely prepares returns relating to payment of arbitrage rebate(currently on IRS Form 8038-1)and that such forms are timely filed with and any rebatable arbitrage are timely paid to the United States as required under Section 148(f)(4)of the Code. Polk F: Purchase of Investments. Imnlementtnn Procedures: 1. All investments of the proceeds of Agency Bonds will be made by the Successor Agency at the direction of the Chief Financial Officer,who will ensure that such proceeds are invested in compliance with federal tax requirements and that all such investments are made at Fair Market Value. The Chief Financial Officer will consult with Bond Counsel prior to investing any proceeds of Agency Bonds in guaranteed investment contracts or certificates of deposit not publicly traded on any investment exchange. Policy G: Credit Enhancement Transactions. Im entlrtg Procedures: 1. Prior to bidding for, purchasing, entering into, or otherwise engaging in any post-issuance credit enhancement transactions relating to the proceeds of or debt service on Agency Bonds (including, without limitation, bond insurance policies, letters of credit, guaranteed investment contracts, interest rate swaps, and market hedges), the Chief Financial Officer will consult with Bond Counsel. Policy H: Subsidy Payments. ImnlemenAWr:Procedures: 1. See the implementing procedures of Policy A,above. Procedures—Page 3 of 4 09960.0000017798241.1 Policy L Post Issuance Modifications. Implem-en-Aw Procedures: 1. Prior to entering into any modification of the terms of any outstanding Agency Bonds (including, without limitation, changes in maturity date, interest rate, call provisions, financial or earnings covenants, or use of proceeds), the Chief Financial Officer will consult with Bond Counsel. Policy Records Re_tendon imp—knentMinz Procedures: 1. Retention Period: Records material to Agency Bonds will be retained by the Successor Agency for a period equal to the maturity of such Agency Bonds plus 3 years.In the event any Agency Bonds are reilinded, records of the original Agency Bonds will be retained until the maturity of the refimding Agency Bonds,plus 3 years. 2. Records to be Retained: A. Records regarding the issuance and sale of the Agency Bonds (bond transcript and closing documents), the mvestincrit and expenditure of the original proceeds of the Agency Bonds and any investment earnings, including requisitions, trust or investment statements,bidding certificates for guaranteed investment contracts,rebate computations, credit enhancement contracts, swap or other derivative contracts, certifications relating to any of the foregoing, rebate computations, any filings with the IRS,any correspondence with the IRS,and architectural or construction drawings and documents of the bond financed or refinanced facilities. B. Elections regarding accounting MCdXKIS, rebate matters, or application of regulatory provisions. C. Copies of any Use Arrangements, including, without limitation, the following arrangements involving the use of any facilities financed by the Agency Bonds: leases, naming rights agreements, title retention agreements, management contracts, sponsored research contracts, capacity reservation agreements,agreements regarding rates or charges for use of Bond Financed Facilities, incentive payment service contracts,requirements contracts or"take'contracts or"take or pay"contracts. D. The Chief Financial Officer will be custodian of the foregoing records. The Foregoing Procedures were adopted on 2013. Chief Financial Officer Successor Agency to the former Redevelopment Agency of the City of Redlands Procedures-Page 4 of 4 09960.00OW77M41.1 E It A Summary of Responsibility Assignments Executive Director 1. Ensure overall compliance with Policies and Procedures; monitor responsibility assignments and periodically review Procedures;periodically revise Policies as necessary. 2. Meet at least annually with the Chief Financial Officer to evaluate use of bond financed facilities.ftlicy 1) Chief Financial Officer 1. Periodically revise Procedures as necessary. 2. Meet at least annually with the Executive Director to evaluate use of bond financed facilities. ooli'cy B) 3. Report potential non-compliance to Bond Counsel.(Eolicy 4. Consult with Bond Counsel before(a)purchasing guaranteed investment contracts or non-publicly traded certificates of deposit with proceeds of:(b)entering into credit enhancement transactions with respect to,or (c)modifying the terms of,Agency Bonds.(Policies F and G) 5. Monitor Use Arrangements and consult with counsel prior to entering into new Use Arrangements.(^P is B) b. Monitor,record,and allocate expenditure of bond proceeds by project location and fintictional description. Rana A) 7. Ensure preparation of and review Initial Report and Annual Reports.fto&y 0 8. Until final allocation of bond proceeds,prepare a monthly report of project expenditures.(PolicyA 9. Prepare and retain separate records for investment performance of bond proceeds.ft"c A 10. Prepare Initial Report and Annual Reports.Qgkqy_Q 1i. Make and record final allocations of expenditures of proceeds of Agency Bonds.Tolicy A) 12. Retain and manage relationship with Rebate Analyst. 'olicy E) 13. Ensure compliance with retention policies and act as custodian of retained records.ftligy J} Purchasing Services Abiig= 1. Coordinate with the Chief Financial Officer on purchase orders and expenditures with respect to Bond Financed Facilities. olic A) 2. Scan and file all purchase orders and invoices with respect to Bond Financed Facilities.&oJKy A General Counsel 1. Notify the Chief Financial Officer of any Use Arrangements submitted for approval that relate to Bond Financed Facilities.(Policy B).