Appendix F. Index

A

• abatement
  • Abatement Clause
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 2.4.8.1 Events of Default and Remedies
    Actions to be taken in events of default and the remedies to be applied
  • 3.6.1. Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments.
  • 3.9.2 State Public Works Board Public Lease Revenue Bonds
    The California State Public Works Board issues lease revenue bonds to finance capital improvement for state agencies.
• accountability and transparency
  • i.5 MANAGE YOUR DEBT AFTER IT IS ISSUED
  • 8.1 A FRAMEWORK FOR MANAGING BOND FUNDS
    An approach to managing bond proceeds.
  • Annual Debt Transparency Report
    • 7.1.3 Annual Debt Transparency Report
  • bankruptcy
    • D.1 Public Agencies and Bankruptcy
  • conduit issuer reporting
    • i.5.2.3 Conduit Issuer Reporting
  • culture of transparency
    • 6.1.2 Governing Board Responsibilities
      Role of governing board in complying with federal securities laws.
  • improving transparency
    • 5.8 Improving Transparency and Investor Access to the Municipal Market
      The use of investor websites and EMMA among other technologies to communicate with market participants.
  • local issuer bond
    • 7.2.2 Local Issuer Bond Accountability
  • market transparency
    • 8.5 Other Disclosures to the Market
      Other forms by which issuers may communicate to market participants.
• Acts
  • A.5 Financing Tools Contained in Statute
• ad valorum real property taxes
  • Ad Valorum Taxes
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.6 Special Taxes
    Sources of Revenues securing debt obligations: Special taxes defined
  • B.1.3.1.2 GO Bond Structures
  • B.1.4.3 Parcel Taxes
  • 1.4.1 Determining the Category of Revenues
    Differentiating “taxes,” “assessments” and “fees and charges.”
  • 1.4.3 Ad Valorem Real Property Taxes
    Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • 1.4.4 Ad Valorem Real Property Taxes Securing Voter-Approved Obligations
    The use of Ad Valorem property taxes to secure debt obligations.
  • 1.4.5 General Taxes
    Sources of Revenues securing debt obligations: General taxes defined
  • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
  • 1.7.4 Proposition 62 (1986), Voter Approval of Taxes Act
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • 3.9.1 State General Obligation Bonds
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • B.1.1.2 Proposition 13
  • B.1.3.1 Local General Obligation Bonds
  • Pre-Proposition 13 Obligations
    • 1.4.4.1 Pre-Proposition 13 Obligations
      Ad Valorem property taxes securing voter-approved debt obligations prior to Proposition 13.
    • B.1.1.1 School Facility Finance Before Proposition 13
  • Proposition 13
    • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
    • B.1.1.2 Proposition 13
  • Proposition 39 GO Bonds
    • 1.4.4.3 Proposition 39 General Obligation Bonds
      Ad Valorem property taxes securing voter-approved Proposition 39 GO bonds.
  • Proposition 46 GO Bonds
    • 1.4.4.2 Proposition 46 General Obligation Bonds
      Ad Valorem property taxes securing voter-approved Proposition 46 GO bonds.
  • securing voter-approved debt
    • 1.4.4 Ad Valorem Real Property Taxes Securing Voter-Approved Obligations
      The use of Ad Valorem property taxes to secure debt obligations.
• Additional debt
  • Additional Bonds
  • Additional Bond Test/Additional Bond Covenant
  • 2.4.6.3 Additional Debt Test Calculations
  • 2.4.6 Additional Debt
  • Additional Debt Test Calculation
    • 2.4.6.3 Additional Debt Test Calculations
• agreement among underwriters (AAU)
  • 5.3.3 Documentation for a Negotiated Public Offering
• alternative minimum tax
  • Alternative Minimum Tax
  • 3.1.3 Tax Treatment
    Tax exempt or taxable
  • 3.5 Tax Treatment of Municipal Bonds
    A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax purposes.
  • 4.4.1 Issue Sizing and Term
    Limits on issue size and term pursuant to the Tax Code.
• amortization risk
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed rate obligation to a variable rate
• annual appropriation exception
  • Annual Appropriation Lease
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • 1.2.4.2 Annual Appropriation Exception
    Debt limit exception based upon the source of repayment being an annual appropriation made by the public agency.
  • 3.6.1 Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments
• annual financial statements/reports
  • Annual Report
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • 5.8.1 Investor Relations and Outreach
  • 6.1.4.1 Recent SEC Enforcement Focus
  • 7.2.6 Mello-Roos Community Facilities Reports
  • 8.5.1 Audited Financial Statements
• anti-fraud rules
  • Anti Fraud Provisions
  • SEC Rules 10B-5 Standard
  • i.3.2 Legal Responsibilities of Issuers of Municipal Securities
  • 6.1.1 Anti fraud Rules
    Statements by municipal issuers to investors, or potential investors, and even statements to the public generally, if likely to be heard and relied upon by the securities market are subject to the anti fraud provisions of federal securities laws.
• arbitrage bonds
  • Arbitrage
  • 4.8.1 General Background on Arbitrage Yield Restriction
• arbitrage rebate
  • Arbitrage
  • 4.9 Arbitrage Rebate
    The requirement that arbitrage earning must be rebated to the federal government.
  • 8.1 A Framework for Managing Bond Funds
    An approach to managing bond proceeds.
  • 8.2.2 Maintaining Tax-Exempt Status
    Record keeping essential to maintaining tax-exempt status of bonds.
  • 8.3 Post-Issuance Federal Tax Law Requirements
    Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax-exempt” status.
  • 8.3.5 Arbitrage Rebate
  • 9.5.1 Arbitrage Rebate and Yield Restriction
  • 9.6 Investment Review and Oversight
    The importance of review and oversight in the management of bond fund investments.
  • 6-month expenditure exception
    • 4.9.1.2 6-month Expenditure Exception
      Exception to arbitrage rebate requirements in Tax Code.
  • 18-month Expenditure Exception
    • 4.9.1.3 18-Month Expenditure Exception
      Exception to arbitrage rebate requirements in Tax Code.
  • 2-year Expenditure Exception
    • 4.9.1.4 2-Year Expenditure Exception
      Exception to arbitrage rebate requirements in Tax Code.
  • monitoring investment income and arbitrage compliance
    • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • monitoring use of bond-financed property
    • 8.3.3 Monitoring Use of Bond-Financed Property
  • penalty in lieu of rebate
    • 4.9.2 Penalty in Lieu of Rebate
  • rebate exception
    • 4.9.1 Rebate Exceptions
    • 8.3.5 Arbitrage Rebate
  • small issuer exception
    • 4.9.1.1 Small Issuer Exception
      Exception to arbitrage rebate requirements in Tax Code.
• arbitrage yield restriction
  • Arbitrage
  • 4.8.1 General Background on Arbitrage Yield Restriction
  • 4.8.2.2 Expenditure of Gross Proceeds
  • 4.8.3.1 Fair Market Value Rules
  • 4.8.4 Arbitrage Yield Restriction Exceptions
    Important exceptions to this yield restriction rule.
  • 4.8.4.4 Other Exceptions
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • 9.5.1 Arbitrage Rebate and Yield Restriction
  • 9.6 Investment Review and Oversight
    The importance of review and oversight in the management of bond fund investments.
  • bona fide debt service funds
    • 4.8.4.2 Bona Fide Debt Service Funds
  • expenditure of gross proceeds
    • 4.8.2.2 Expenditure of Gross Proceeds
  • fair market value rules
    • 4.8.3.1 Fair Market Value Rules
  • initial temporary period
    • 4.8.4.1 Initial Temporary Period
  • proceeds
    • 4.8.2.1 Categories of Proceeds
  • reserve funds
    • 4.8.4.3 Reserve Funds
  • yield
    • 4.8.3 Yield
      The yield on a bond issue defined.
  • yield reduction payments
    • 4.8.5 Yield Restriction; Yield Reduction Payments
      Payments made to the U.S. Treasury when the yield on unexpended bond proceeds exceed limits in Tax Code.
  • yield restriction
    • 4.8 Arbitrage Yield Restriction
      The Tax Code prohibts the issuance of “arbitrage bonds” and restricts the rate of return on investments made with bond proceeds.
    • 9.5.1 Arbitrage Rebate and Yield Restriction
  • yield restriction exception
    • 4.8.4 Arbitrage Yield Restriction Exceptions
      Important exceptions to this yield restriction rule.
• assessments
  • assessments
  • i.1.4.2 Capital Improvement Planning and Capital Improvement Budgeting
  • i.4.6 What Financing Options are Available
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 1.4.2 What Is a Tax?
    Series of questions used to determine “what is a tax.”
  • 1.4.7 Assessments
    Sources of Revenues securing debt obligations: Assessments defined
  • 1.4.8 Fees and Charges
    Sources of Revenues securing debt obligations: Fees and charges defined
  • 1.6.1 Initiative Power and its Impact on Debt
  • 2.2.1 Sources of Revenue and Security for Repayment
  • 2.4.2 Source of Payment; Pledge
    The pledge of revenues securing the debt obligation
  • 2.4.5.1 Debt Covenants
  • 3.3.6 Enterprise Fund Debt Obligations
    Debt obligations payable from and secured by revenues received from a local government “proprietary” enterprise.
  • 3.3.7 Special Assessments, Special Taxes, and Tax Increments
    Debt obligations secured by assessments, special taxes, or tax increment.
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello-Roos bonds are payable from special taxes imposed on real property.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
  • B.1.4.1 Community Facilities Districts/Mello-Roos Bonds
  • B.1.4.3 Parcel Taxes
  • D.1.2 Process
  • voter-approved limitations
    • 1.7 Historical Overview of Voter-Approved Limitations on Local Government Revenues
      Summary of state-level initiatives directed at the fiscal affairs of California state and local government.
    • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
    • 1.7.2 Proposition 4 (1979), Gann Limit Initiative
    • 1.7.5 Proposition 218 (1996), Right to Vote on Taxes Act
• assessment bonds
  • assessments
  • 1.4.7 Assessments
    Sources of Revenues securing debt obligations: Assessments defined
  • 1.6.1 Initiative Power and its Impact on Debt
  • 3.3.7.1 Assessment Bonds
    Local governments issue assessment bonds to pay for public infrastructure that confers a special benefit upon real property and are payable from assessments imposed on the
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
• assessment district
  • assessments
  • 1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns
    Basis of authority provided to charter cities
  • 3.3.7.1 Assessment Bonds
    Local governments issue assessment bonds to pay for public infrastructure that confers a special benefit upon real property and are payable from assessments imposed on the
• asset securitization
  • 3.7.5 Asset Securitization
    Asset securitization involves a public agency selling either assets expected to generate future revenues.
• auction-rate securities (ARS)
  • Auction Rate Securities
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.
• authority to borrow
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt
• authorizing statutes
  • organic act
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • 3.3.3 Sales Tax Revenue Bonds
    Debt obligations that are payable from and secured by revenues from the imposition of a sales and use tax, or a transaction and use tax, on retail transactions
  • A.3 Organic Statutes of Specific Entities Authorized to Issue Debt

B

• bank qualified bonds
  • bank qualified bonds
  • 3.5 Tax Treatment of Municipal Bonds
    A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax
  • 4.11 Bank Qualified Bonds
    The ability for banks to benefit from tax exempt bonds under the Tax Code.
• bankruptcy
  • 2.3.2 Credit Enhancement and Liquidity Support
    Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
  • 2.3.2.3 Letters of Credit
    Liquidity Support: Letter of Credit
  • 2.4.8.1 Events of Default
    Different types of defaults
  • 3.3.6.1 Public Enterprise Revenue Bonds
  • D.1 Public Agencies and Bankruptcy
• basis risk
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed rate obligation to a variable rate
• Blue Sky laws
  • BLUE SKY LAWS/BLUE SKY SURVEY OR MEMORANDUM
  • 6.5.2 Securities Laws in Other States
• bond anticipation notes (BANs)
  • Bond Anticipation Notes (BANs)
  • Note
  • 2.2.2.2 Debt Service Reserve Fund Surety Bonds
    Credit enhancement: Debt service reserve fund
  • 3.7.3 Bond Anticipation Notes and Grant Anticipation Notes
    Bond anticipation notes (BANs) are notes issued in advance, generally several years in advance, of the expected date of long-term financing for a project.
  • B.1.5.2 Bond Anticipation Notes
• bond counsel
  • bond counsel
  • co-bond counsel
  • i.4.1.1 Pre-Issuance Phase
  • 2.4.11 Amendments
    Procedures for amending bond documents and related debt security documents.
  • 4.8.3.2 Guaranteed Investment Contracts
  • 4.9.1 Rebate Exceptions
  • 4.13 Tax Risk
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 5.3 Negotiated Public Offerings
    The sale of debt using a negotiated approach to pricing.
  • 5.4.1 Direct Costs of Issuance
  • 6.1.1 Antifraud Rules
    Statements by municipal issuers to investors, or potential investors, and even statements to the public generally, if likely to be heard and relied upon by the securities market
  • 6.2.2 Attorneys
  • 6.3.2 Contents of the Official Statement
  • 8.3 Post-Issuance Federal Tax Law Requirements
    Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax exempt” status.
  • 8.4 Continuing Disclosure
    Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • 9.1 A Team Approach to Investing Bond Funds
    Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is
  • 9.4.2 Investments Specific to Bond Funds
  • arbitrage rebate and yield restriction considerations
    • 9.5.1 Arbitrage Rebate and Yield Restriction
  • bond funds
    • 2.4.3 Funds and Accounts; Flow of Funds
      How funds will flow from borrower to lender.
    • 6.2.2 Attorneys
  • investments
    • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
    • 2.4.7 Investments
      Decisions regarding the investment of proceeds
    • 6.4 Other Marketing Activities and Other Public Statements
    • 9.2 Types of Funds Available for Investment
    • 9.4 Common Types of Investments for Bond Funds
    • 9.5.2 Investment Considerations
      Issuer considerations regarding investment of bond funds.
    • 9.6 Investment Review and Oversight
      The importance of review and oversight in the management of bond fund investments.
  • opinion of bond counsel
    • 6.3.3 Disclosure Standards and Guidance
      Sources of guidance as to what may be desirable to include in an OS.
    • 8.3 Post-Issuance Federal Tax Law Requirements
      Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax exempt” status.
  • types of fund
    • 9.2 Types of Funds Available for Investment
• bond funds management
  • Bond Fund
  • 8.1 A Framework for Managing Bond Funds
    An approach to managing bond proceeds.
  • accounting
    • 8.2.4 Accounting Records
      Record keeping essential to maintaining tax exempt status of bonds.
  • annual reports
    • 8.5.1 Audited Financial Statements
  • audit review
    • 8.2.7 Audit Review
      Record keeping essential to maintaining tax exempt status of bonds.
  • bond documents
    • 2.4 Other Common Document Provisions
      Structural features of debt obligatins often contained in bond documents.
    • 5.4.1 Direct Costs of Issuance
    • 5.5.1 Documentation Used in Private Placement Transactions
    • 8.1.1 Bond Documents
      Bond documents that contain provisions that control the administration of bond funds.
    • 9.3.2 Bond Document Provisions
      Role of bond documents in the investment of bond funds.
    • 9.4.1 Permitted Investments
      Types of investment vehicles that may be used to invest bond funds.
  • changes in use of bond financed property
    • 8.4 Continuing Disclosure
      Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • compliance checklists
    • 8.2.6 Compliance Checklists
      Record keeping essential to maintaining tax-exempt status of bonds.
  • compliance program
    • i.4.1.3 Post-Issuance Phase
    • i.4.2.6 Decision #6 – Decide whether the debt will be tax exempt
    • i.4.5.2 Requirement #2 – The debt must finance a qualifying project and satisfy ongoing requirements and limitations regarding the use of the project
    • i.5.1.1 Debt Management Policies
    • i.5.2.1 Proposition 39 General Obligation Bonds
    • 4 Federal and State Tax Law Requirements
    • 8 Post-Issuance Debt Management Requirements, Including Tax Compliance and Ongoing Disclosure Obligations
      Best practices regarding the development and administration of guidelines, policies, procedures, and plans to track and report on the use of bond funds in compliance with
    • 8.2 Elements of Post-Issuance Compliance
      Recommendations on a post issuance compliance program.
    • 8.3.1 Post-Issuance Tax Compliance Programs
    • 8.3.2 Tracking and Allocating Bond Proceeds
    • 8.3.7 Changes in Use of Bond-Financed Property
    • 8.4.4 Incentives for Compliance
      Failure to comply with the requires of SEC Rule 15c2-12 must reported in any subsequent public offering.
    • 8.5.2 Informal Statements and Websites
    • 8.5.4 Managing Disclosure Risk
      Approaches to managing the risk improper disclosure.
    • 9.1 A Team Approach to Investing Bond Funds
      Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is
    • 9.5.1 Arbitrage Rebate and Yield Restriction
    • 9.6 Investment Review and Oversight
      The importance of review and oversight in the management of bond fund investments.
  • continuing disclosure
    • 8.5 Other Disclosures to the Market
      Other forms by which issuers may communicate to market participants
  • event notices
    • i.5.2.2 Marks- and Mello-Roos Bonds
    • 8.5.2 Informal Statements and Websites
  • internal control
    • i.4.1.3 Post-Issuance Phase
    • i.5.1.1 Debt Management Policies
    • i.5.2.5 Reports to the California Debt Investment and Advisory Commission
    • 5.4.1 Direct Costs of Issuance
    • 8.2.1 Establishing a Compliance Program
      Record keeping essential to maintaining tax exempt status of bonds.
    • 8.2.7 Audit Review
      Record keeping essential to maintaining tax exempt status of bonds.
    • 9.6 Investment Review and Oversight
      The importance of review and oversight in the management of bond fund investments.
  • investing bond funds
    • 4.8.2.1 Categories of Proceeds
    • 4.8.2.2 Expenditure of Gross Proceeds
    • 9.1 A Team Approach to Investing Bond Funds
      Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is
    • 9.3 Investment Authority and Controlling Documents
      Investment authority and controlling documents regarding the investment of bond funds.
    • 9.4 Common Types of Investments for Bond Funds
    • 9.5 Legal and Investment Considerations
    • 9.6 Investment Review and Oversight
    • The importance of review and oversight in the management of bond fund investments.
  • maintaining tax-exempt status
    • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
    • i.4.2.6 Decision #6 – Decide whether the debt will be tax exempt
    • i.4.5.2 Requirement #2 – The debt must finance a qualifying project and satisfy ongoing requirements and limitations regarding the use of the project
    • i.4.5.3 Requirement #3 – Manage the arbitrage rules
    • i.4.5.4 Requirement #4 – Adhere to procedural and other rules
    • i.5.2 California Review and Reporting Requirements on Bonds
    • 2.4.5.1 Debt Covenants
    • 2.4.11 Amendments
      Procedures for amending bond documents and related debt security documents.
    • 3.3.9 Conduit Revenue Bonds
      “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
    • 3.5 Tax Treatment of Municipal Bonds
      A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax
    • 4 Federal and State Tax Law Requirements
    • 8.2.2 Maintaining Tax-Exempt Status
      Record keeping essential to maintaining tax exempt status of bonds.
    • 8.2.3 Record keeping and Reporting
      Record keeping essential to maintaining tax exempt status of bonds.
    • 8.3 Post-Issuance Federal Tax Law Requirements
      Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax exempt” status.
    • 9.5.1 Arbitrage Rebate and Yield Restriction
  • managing disclosure risk
    • 8.5.4 Managing Disclosure Risk
      Approaches to managing the risk improper disclosure.
  • monitoring investment income and arbitrage compliance
    • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • monitoring use of bond financed property
    • 8.3.3 Monitoring Use of Bond-Financed Property
  • record keeping and reporting
    • 8.2.3 Record keeping and Reporting
      Record keeping essential to maintaining tax exempt status of bonds.
  • record keeping and retention
    • 8.3.1 Post-Issuance Tax Compliance Programs
    • 8.3.6 Recordkeeping and Retention
  • securities law compliance
    • i.3.2 Legal Responsibilities of Issuers of Municipal Securities
  • statutory authority
    • 1.1.1 Statutory Authority to Borrow
      All public agencies are subject to the California Constitution and the powers granted to them or that are essential to their purpose.
    • 1.5.2 Charter City Financing
      How the authority of a charter city may affect its debt financings
    • 2.1 Overview
      Factors determining structure, including issuer, term, source of repayment, and debt limits.
    • 2.3.2.4 Lines of Credit and Standby Bond Purchase Agreements
      Liquidity Support: Lines of Credit
    • 9.3.1 Statutory Authority
      Controlling statutory authority for investment of bond funds.
  • tax law compliance
    • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
    • i.4.5.3 Requirement #3 – Manage the arbitrage rules
    • 4 Federal and State Tax Law Requirements
    • 8.3 Post-Issuance Federal Tax Law Requirements
      Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax-exempt” status.
  • tracking and allocating bond proceeds (“See bond proceeeds”) written policies and procedures
    • i.4.1.3 Post-Issuance Phase
    • i.4.5.3 Requirement #3 – Manage the arbitrage rules
    • i.5.1 Managing Your Agency’s Debt Filings
    • i.5.2.1 Proposition 39 General Obligation Bonds
    • i.5.2.2 Marks- and Mello-Roos Bonds
    • i.5.2.3 Conduit Issuer Reporting
    • 5.4.1 Direct Costs of Issuance
    • 6.1.2 Governing Board Responsibilities
      Role of governing board in complying with federal securities laws.
    • 6.3.3 Disclosure Standards and Guidance
      Sources of guidance as to what may be desirable to include in an OS.
    • 8.2.5 Written Procedures
      Record keeping essential to maintaining tax-exempt status of bonds.
    • 8.3.1 Post-Issuance Tax Compliance Programs
    • 8.5.4 Managing Disclosure Risk
      Approaches to managing the risk improper disclosure.
    • 9.3.3 Investment Policies
      Role of investment policies in the investment of bond funds.
• bond insurance
  • Bond Insurance
  • Credit Enhancement
  • 2.3.2 Credit Enhancement and Liquidity Support
    Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
  • 2.3.2.1 Bond Insurance
    Credit enhancement: Bond insurance
  • 2.3.2.2 Debt Service Reserve Fund Surety Bonds
    Credit enhancement: Debt service reserve fund
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 4.7.2.5 Cost of Issuance Limit
    Requirements of private activity bonds
  • 5.1.1 Sale Methods – Competitive or Negotiated Sale
  • 5.4.1 Direct Costs of Issuance
  • 6.3.4 Transactions with Credit or Liquidity Support
    The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
• bond insurance premium
  • 2.3.2.1 Bond Insurance
    Credit enhancement: Bond insurance
  • 2.3.2.2 Debt Service Reserve Fund Surety Bonds
    Credit enhancement: Debt service reserve fund
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 4.7.2.5 Cost of Issuance Limit
    Requirements of private activity bonds
  • 4.8.3 Yield
    The yield on a bond issue defined.
  • 5.4.1 Direct Costs of Issuance
• bond proceeds
  • i.4.5.2 Requirement #2 – The debt must finance a qualifying project and satisfy ongoing requirements and limitations regarding the use of the project
  • i.4.5.3 Requirement #3 – Manage the arbitrage rules
  • i.5.1.1 Debt Management Policies
  • i.5.2.5 Reports to the California Debt Investment and Advisory Commission
  • 2.3.1.1 Mandatory Redemption
    Mandatory redemption of principal
  • 2.4.1 Application of Proceeds
    How the proceeds of debt may be applied.
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 4.4.3 Capitalized Interest
    Capitalized interest pursuant to the Tax Code.
  • 4.4.4 Reserves
    Reserves pursuant to the Tax Code.
  • 4.4.5 Reimbursement of Prior Expenditures
    Reimbursement of Prior Expenditures pursuant to the Tax Code.
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.8.1 General Background on Arbitrage Yield Restriction
  • 4.8.2 Bond Proceeds
    Different arbitrage rules apply to different categories of bond proceeds
  • 4.8.2.1 Categories of Proceeds
  • 4.8.5 Yield Restriction; Yield Reduction Payments
    Payments made to the U.S. Treasury when the yield on unexpended bond proceeds exceed limits in Tax Code.
  • 4.9 Arbitrage Rebate
    The requirement that arbitrage earning must be rebated to the federal government.
  • 8.2.2 Maintaining Tax-Exempt Status
    Record keeping essential to maintaining tax exempt status of bonds.
  • expenditure of gross proceeds
    • 4.8.2.2 Expenditure of Gross Proceeds
  • investment earnings
    • 9.3.2 Bond Document Provisions
      Role of bond documents in the investment of bond funds.
  • investment of bond proceeds (See” bonds fund management- investing bond funds”)
  • issue sizing and term
    • 4.4.1 Issue Sizing and Term
      Limits on issue size and term pursuant to the Tax Code.
  • private bussiness use
    • 4.6.1 Private Business Use
      One of several tests of private activity or benefit.
  • reverse fund
    • 4.8.4.3 Reserve Funds
  • tracking and allocating bond proceeds
    • 8.3.2 Tracking and Allocating Bond Proceeds
    • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
    • 8.3.6 Recordkeeping and Retention
• bond purchase agreement
  • BOND PURCHASE CONTRACT OR AGREEMENT
  • i.4.1.2 Issuance Phase
  • 5.3.3 Doc umentation for a Negotiated Public Offering
  • 5.3.4 Pricing of a Negotiated Public Offering
  • 7.1.2 Report of Final Sale
• broker-dealer
  • BROKER-DEALER
  • 5.3.3 Documentation for a Negotiated Public Offering
  • 5.7.2 Targeting Investors
  • 6.2.1 Municipal Advisors and Underwriters

C

• California Constitution
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt
  • authority to borrow
    • 1.1 A Public Agency’s Authority to Borrow
      This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
    • 1.5 Charter Cities
    • 3.3.1 Local Agency General Obligation Bonds
      General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
    • 3.3.7.1 Assessment Bonds
      Local governments issue assessment bonds to pay for public infrastructure that confers a special benefit upon real property and are payable from assessments imposed on the real property.
    • 3.3.9.4 Education
      A type of conduit financing used to finance educational facilities operated by non-profit organizations.
    • 3.9.1 State General Obligation Bonds
    • B.1.1.2 Proposition 13
  • authority to tax
    • General Tax
    • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
      Sources of revenue available to local governments to repay debt obligations.
    • 3.3.3 Sales Tax Revenue Bonds
      Debt obligations that are payable from and secured by revenues from the imposition of a sales and use tax, or a transaction and use tax, on retail transactions
  • charter cities
    • Charter City
    • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
    • 1.1.1 Statutory Authority to Borrow
      All public agencies are subject to the California Constitution and the powers granted to them or that are essential to their purpose.
    • 1.1.3 Borrowing Authority of Charter Cities
      Authority to borrow provided to charter cities by their charter.
    • 1.2.3 Scope of Debt Limit – When Does the Debt Limit Apply?
    • 1.5 Charter Cities
  • debt limit
    • Debt Limit
    • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
    • 1.2 Constitutional Debt Limit
      The California Constitution places limits on the ability of certain public agencies to incur debt, referred to as the Debt Limit
    • 2.1 Overview
      Factors determining structure, including issuer, term, source of repayment, and debt limits.
    • B.1.3.1 Local General Obligation Bonds
    • Figure B-1 Statutory Debt Limits
      
  • purpose
    • 1.2.2 Purpose of Debt Limit
  • scope
    • 1.2.3 Scope of Debt Limit – When Does the Debt Limit Apply?
  • debt limit exceptions
    • Debt Limit Exceptions
    • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
    • 1.2.4 Exceptions to the Debt Limit
      California courts recognize several exceptions to the constitutional debt limit.
    • 3.3.4 TRANs and RANs
      Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
    • 3.6.1 Financing Leases
      The public agency obtains financing by entering into a lease for which it makes rental payments
    • 3.9.3 Revenue Anticipation Notes
      Revenue Anticipatin Notes (RANs) are used to manage cash flow and are paid from tax and other revenues received by the State later in the fiscal year.
    • 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
      
      
  • debt limit strategies
    • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
    • 1.3 Common Strategies for Avoiding the Debt Limit
      Public agencies may consider various legally permitted financing strategies for issuing debt obligations that do not cause the agency to violate the constitutional debt limit.
    • 2.3.2.4 Lines of Credit and Standby Bond Purchase Agreements
      Liquidity Support: Lines of Credit
    • 3.1.4 Unique Public Agency Financings that Address Legal Constraints or Public Policy Issues
      California public finance professionals have structured some types of debt to address special legal constraints.
      
  • local revenue sources
    • Local Revenue Sources
    • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
      Sources of revenue available to local governments to repay debt obligations.
  • prohibition of gift of public funds
    • 7.3 Prohibition of Gift of Public Funds
      Prohibitions imposed on a public agency from making any gift of public funds or from lending its public credit to any person.
  • revenue categories
    • 1.4.1 Determining the Category of Revenues
      Differentiating “taxes,” “assessments” and “fees and charges.”
    • Figure 1-1 Public Agency Revenue Sources by Category
  • swaps
    • 2.3.3 Interest Rate Swaps and Synthetic Structures
      Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate obligation
  • tax-exempt bonds provision
    • 4.1 California Tax Exemption
      State statutes providing for the issuance of bonds generally provide for the exemption of interest on the bonds from State of California personal income taxes, regardless of the federal income tax status of the bonds.
• California Debt and Investment Advisory Commission(CDIAC)
  • California Debt and Investment
  • 7.1 Reporting to the California Debt and Investment Advisory Commission
    Compliance with California Government Code 8855 et. seq.
  • Annual Debt Transparency Report
    • i.5.2.5 Reports to the California Debt Investment and Advisory Commission
    • 7.1.3 Annual Debt Transparency Report
  • certification of local debt policies
    • 7.1.1 Report of Proposed Debt Issuance
  • debt reporting
    • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
    • i.5.2.5 Reports to the California Debt Investment and Advisory Commission
    • 7.1 Reporting to the California Debt and Investment Advisory Commission
      Compliance with California Government Code 8855 et. seq.
  • Mark-Roos Reports
    • i.5.2.2 Marks- and Mello-Roos Bonds
    • 7.1.5 Marks-Roos Reports
  • Mello-Roos CFD Reports
    • i.5.2.2 Marks- and Mello-Roos Bonds
    • 7.1.4 Mello-Roos Community Facilities District Reports
  • Report of Final Sale
    • i.5.2.5 Reports to the California Debt Investment and Advisory Commission
    • 7.1.2 Report of Final Sale
  • Report of Proposed Debt Issuance
    • i.5.2.5 Reports to the California Debt Investment and Advisory Commission
    • 7.1.1 Report of Proposed Debt Issuance
• California Debt Limit Allocation Committee (CDLAC) annual filings
  • 7.2.7 California Debt Limit Allocation Committee Reports
  • 4.7.2.1 Volume Cap
    Requirements of private activity bonds
  • C.2 Regulatory Resources
  • volume cap
    • 4.7.2.1 Volume Cap
      Requirements of private activity bonds
• California Environmental Quality Act (CEQA)
  • California Environmental Quality Act (CEQA)
  • 7.4 California Environmental Quality Act
    Requirements imposed by California law on public agencies that approve or carry out “projects” that may have an impact on the environment.
• California securities laws
  • 6.5.1 California State Securities Laws
• call provisions
  • Call
  • Call Protection
  • 2.3.1.3 Optional Redemption
    Optional redemption of principal
  • 5.2.2 Disadvantages of a Competitive Sale
• capital appreciation bonds
  • Capital Appreciation Bonds
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • B.1.3.1.2 GO Bond Structures
• capital expenditures
  • Capital Expenditures
  • i.4.5.3 Requirement #3 – Manage the arbitrage rules
  • 4.4 Capital Expenditure Financings
    Proceeds of tax-exempt bonds will only be treated as spent when used to finance or reimburse capital expenditures.
  • working capital expenditures
    • 4.5 Cash Flow Borrowings
      Public agencies may find themselves temporarily short of cash to finance operations and may need to address the shortfall with a short-term financing called a “cash flow borrowing.”
    • 4.8.2.2 Expenditure of Gross Proceeds
• capital improvement planning and budgeting
  • i.1.4.2 Capital Improvement Planning and Capital Improvement Budgeting
  • 7.1.1 Report of Proposed Debt Issuance
• capitalized interest
  • Capitalized Interest (Funded Interest)
  • 4.4.3 Capitalized Interest
    Capitalized interest pursuant to the Tax Code.
• capitalized interest fund
  • 9.2.2 Capitalized Interest Fund
    Types of bond funds that may be invested by the issuer.
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
• captive pools
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • Figure 3-7 Marks-Roos Captive Pool
• cash flow borrowings
  • Cash Flow Financing
  • 4.4 Capital Expenditure Financings
    Proceeds of tax-exempt bonds will only be treated as spent when used to finance or reimburse capital expenditures.
  • 4.5 Cash Flow Borrowings
    Public agencies may find themselves temporarily short of cash to finance operations and may need to address the shortfall with a short-term financing called a “cash flow borrowing.”
• certificates of participation (COPs)
  • Certificate of participation (COP)
  • 1.3.1 Lease Revenue Bonds and Certificates of Participation
    Debt obligation structured to comply with the Lease exception to the Constitutional debt limit.
  • 3.1.4 Unique Public Agency Financings that Address Legal Constraints or Public Policy Issues
    California public finance professionals have structured some types of debt to address special legal constraints.
  • 3.2.3 Lease-Supported Debt
    Lease-supported debt represents a blend of direct debt and debt issued on behalf of another entity.
  • 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
  • 3.6.1 Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments
  • 3.6.2 Installment Sale Agreements
    Installment sale agreement financings are based on a public agency’s legal authority to purchase property and to appropriate annual funds to meet this obligation.
  • 3.6.3 Certificates of Participation
    A debt obligation that involve selling the right to receive the payments under a lease agreement to other parties.
  • B.1.3.3 Certificates of Participation/Leases
  • B.1.5.3 Refunding Bonds
    
• charges
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 3.3.2 General Fund Obligations
    Debt obligations backed by a public agency’s general fund.
  • 3.3.6.1 Public Enterprise Revenue Bonds
  • voter-approved limitations
    • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
• charter cities
  • Charter City
  • Municipal Affairs
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • 1.1.3 Borrowing Authority of Charter Cities
    Authority to borrow provided to charter cities by their charter.
  • 1.2.3 Scope of Debt Limit – When Does the Debt Limit Apply?
  • 1.5 Charter Cities
• charter city financing
  • 1.5.2 Charter City Financing
    How the authority of a charter city may affect its debt financings
• charter city powers
  • 1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns
    Basis of authority provided to charter cities
• chief compliance officer
  • 8.2.1 Establishing a Compliance Program
    Recordkeeping essential to maintaining tax-exempt status of bonds.
• closed pool
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • Dedicated Pool
• collateralization risk
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate obligation
• commercial paper (tax-exempt)
  • Commercial Paper (CP)
  • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
  • 3.3.5 Teeter Bonds
    Teeterbonds are secured by a pledge of the delinquent property tax receivables and are generally also payable from the county’s general fund.
  • 3.4.3 Commercial Paper
    A debt obligation that involves the issuance and marketing of short-term notes.
  • 5.5.3 Alternative Financing Considerations
    Issuer considerations when using alternative financing, which typically includes bank loans, direct-purchase bonds, and other types of privately placed debt
• competitive sale
  • Competitive Sale
  • Award
  • Bidding Limitations
  • Bond Purchase Contract or Agreement
  • Electronic Bid
  • Good Faith Deposit
  • Notice of Sale
  • Public Offering
  • Public Sale
  • True Interest Cost (TIC)
  • i.4.1.1 Pre-Issuance Phase
  • 3.8 Joint Exercise of Powers Agencies
    A joint exercise of powers agency or authority (JPA) is a separate governmental entity formed by two or more governmental entities.
  • 5.1 What is a public offering?
    Characteristics defining a public sale of debt.
  • 5.1.1 Sale Methods – Competitive or Negotiated Sale
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 5.4.2 Underwriting Fees and Expenses
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.3 The Official Statement
    The offering document in a public offering of municipal securities.
  • A.6 General Bond Statutes
• conduit financing
  • Conduit Financing
  • i.5.2.3 Conduit Issuer Reporting
  • 3.1.5 Purposes for Which Debt is Incurred
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
  • 8.2.7 Audit Review
    Recordkeeping essential to maintaining tax-exempt status of bonds.
  • B.1.6.1 Charter School Facilities
  • B.1.6.2 Nonprofit and Religious School Facilities (See “conduit revenue bonds”)
  • A.7 Other Helpful Statutes
  • borrower/obligor
    • 2.4.2 Source of Payment; Pledge
      The pledge of revenues securing the debt obligation
    • 2.4.8 Events of Default and Remedies
      Actions to be taken in events of default and the remedies to be applied
    • 3.2.2 Debt Obligations Issued on behalf of a Borrower
      With debt issued on behalf of another borrower, the issuer is neither the recipient of the proceeds nor, in most cases, the source of repayment.
    • 3.3.9 Conduit Revenue Bonds
      “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
    • 4.7.2.5 Cost of Issuance Limit
      Requirements of private activity bonds
    • 4.8.2.2 Expenditure of Gross Proceeds
    • 5.6 Credit Ratings
      Credit ratings reflect the opinion of the credit rating agency as to the probability that interest or principal payments on a security will not be paid in full and on time.
    • 6.3.4 Transactions with Credit or Liquidity Support
      The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
    • 6.3.5 Conduit Offerings
      What information should be included regarding the conduit issuer in the OS.
    • 8.4.1 Annual Reports
      Annual financial reports submitted as a part of continuing disclosures made by issuers.
    • 8.4.2 Event Notices
      Event notices required by SEC Rule 15c2-12.
    • 8.4.3 Exceptions to Rule 15c2-12 Continuing Disclosure Requirements
    • 9.3.2 Bond Document Provisions (See “nongovernmental borrower”)
      Role of bond documents in the investment of bond funds.
      
  • issuer
    • 3.2.2 Debt Obligations Issued on behalf of a Borrower
      With debt issued on behalf of another borrower, the issuer is neither the recipient of the proceeds nor, in most cases, the source of repayment.
    • 3.3.9 Conduit Revenue Bonds
      “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
    • 5.4.1 Direct Costs of Issuance
    • 5.6 Credit Ratings
      Credit ratings reflect the opinion of the credit rating agency as to the probability that interest or principal payments on a security will not be paid in full and on time.
    • 6.1 Federal Securities Laws
      While municipal securities are exempt from the registration requirements of federal securities law, they are subject to other rules.
    • 6.3.5 Conduit Offerings
      What information should be included regarding the conduit issuer in the OS.
    • 7.1.1 Report of Proposed Debt Issuance
    • 7.2.1 Local Bond Disclosures
    • 8.1 A Framework for Managing Bond Funds
      An approach to managing bond proceeds.
    • 8.2.7 Audit Review
      Recordkeeping essential to maintaining tax-exempt status of bonds.
    • 8.3.1 Post-Issuance Tax Compliance Programs
    • 8.3.3 Monitoring Use of Bond-Financed Property
    • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
    • 8.4.3 Exceptions to Rule 15c2-12 Continuing Disclosure Requirements
    • 9.3.2 Bond Document Provisions
      Role of bond documents in the investment of bond funds.
    • C.4 State Finance and Joint Powers Authorities with Statewide Jurisdiction
  • issuer reporting
    • i.5.2.3 Conduit Issuer Reporting
  • offerings
    • 6.3.5 Conduit Offerings
      What information should be included regarding the conduit issuer in the OS.
    • 9.3.2 Bond Document Provisions
      Role of bond documents in the investment of bond funds.
• conduit revenue bonds
  • Conduit Financing
  • Private Activity Bonds
  • Qualified Private Activity Bonds
  • 3.3.9 Conduit Revenue Bonds
    “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
• conflicts of interest
  • 5.6.1 What Credit Ratings Mean
  • 6.1.4 SEC Enforcement Actions
    Review of important enforcement actions against public agencies.
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.2.2 Attorneys
  • A.6 General Bond Statutes
• constitutional limitations
  • 1.4.3 Ad Valorem Real Property Taxes
    Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • 1.4.7 Assessments (See “California Constitution”)
    Sources of Revenues securing debt obligations: Assessments defined
  • ad valorem property taxes
    • 1.4.3 Ad Valorem Real Property Taxes
      Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • assessments
    • 1.4.7 Assessments
      Sources of Revenues securing debt obligations: Assessments defined
  • charter city financing
    • 1.5.2 Charter City Financing
      How the authority of a charter city may affect its debt financings
  • charter city powers
    • 1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns
      Basis of authority provided to charter cities
  • credit enhancement
    • 2.3.2 Credit Enhancement and Liquidity Support
      Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
  • Debt Limit
    • 1.2 Constitutional Debt Limit
      The California Constitution places limits on the ability of certain public agencies to incur debt, referred to as the Debt Limit
  • managing bond funds
    • 8.1 A Framework for Managing Bond Funds
      An approach to managing bond proceeds.
  • property related fees and charges
    • 1.4.9 Property-Related Fees and Charges
      Sources of Revenues securing debt obligations: Property-related fees and charges defined
• construction fund (See “project fund”)
• contingent obligation exception
  • Contingent Obligation
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • 1.2.4.3 Lease Exception (the “Offner-Dean Lease Exception”)
    Debt limit exception based upon a debt obligation structured as a lease financing
  • 1.2.4.5 Contingent Obligation Exception
    Debt limit exception depends upon the fact that the public agency’s obligation to make payments from the income and revenue of a future fiscal year is contingent.
• costs of issuance
  • Costs of Issuance (COI)
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 5.4 Costs of Issuance
    The costs of issuance (COI) are the expenses paid by or on behalf of the issuer in connection with the sale and issuance of publicly offered bonds.
  • direct costs of issuance
    • 5.4.1 Direct Costs of Issuance
  • eligible costs
    • 5.3.3 Documentation for a Negotiated Public Offering
  • limit applicable to qualified private activity bonds
    • 4.7.2.5 Cost of Issuance Limit
      Requirements of private activity bonds
  • underwriting fees and expenses
    • 5.4.2 Underwriting Fees and Expenses
  • refunding bonds costs of issuance
    • B.1.5.3 Refunding Bonds
• covenants
  • Covenants
  • 2.4.5 Covenants (See “legal documents”)
• credit enhancement
  • Credit Enhancement
  • 2.3.2 Credit Enhancement and Liquidity Support
    Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
  • 6.3.4 Transactions with Credit or Liquidity Support
    The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
• credit enhancement provider
  • 2.3.2 Credit Enhancement and Liquidity Support
    Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
• credit facility
  • Liquidity Facility or Liquidity Support
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”
  • 5.5.2 Direct Loans
  • 6.3.4 Transactions with Credit or Liquidity Support
    The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
  • 9.2.3 Debt Service Reserve Fund (See “liquidity support”)
    Types of bond funds that may be invested by the issuer.
• credit ratings
  • Credit Rating
  • 5.6 Credit Ratings
    Credit ratings reflect the opinion of the credit rating agency as to the probability that interest or principal payments on a security will not be paid in full and on time.
• credit risk
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate
  • index debt
    • 3.4.2.1 Index Debt
      The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.
  • financing lease
    • 3.6.1 Financing Leases
      The public agency obtains financing by entering into a lease for which it makes rental payments
  • pool bonds
    • 3.7.7 Pool Bonds
      Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • credit ratings
    • 5.6 Credit Ratings
      Credit ratings reflect the opinion of the credit rating agency as to the probability that interest or principal payments on a security will not be paid in full and on time.
    • 5.6.1 What Credit Ratings Mean
• current fiscal year exception
  • Debt Limit Exceptions
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • 1.2.4.1 Current Fiscal Year Exception
    Debt limit exception based on the fact that the public agency can pay the debt with funds it already has or will receive during the current fiscal year.
  • 1.2.4.2 Annual Appropriation Exception
    Debt limit exception based upon the source of repayment being an annual appropriation made by the public agency.
  • 3.3.4 TRANs and RANs
    Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
  • 3.9.3 Revenue Anticipation Notes
    Revenue Anticipation Notes (RANs) are used to manage cash flow and are paid from tax and other revenues received by the State later in the fiscal year.

D

• debt financing
  • Introduction
  • i.2.2.2 When should a public agency consider debt?
  • 4.3 What is an Issue of Debt?
    For interest on a bond to be tax-exempt, the bond must be debt under general federal tax law principles.
• debt issue
  • Issue (noun)
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • 2.4.7 Investments
    Decisions regarding the investment of proceeds
  • 5.7.2 Targeting Investors
  • B.1.3.1.3 Policy Considerations for Issuing GO Bonds
  • C.1.1 State and Local Organizations (See “tax-exempt debt”)
• debt limit
  • Debt Limit
  • 1.2.1 Debt Limit
    Voter approval requirements imposed by the State Constitution to restrict the ability of certain public agencies to incur unfunded, long-term obligations
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt (See “California Constitution”)
• debt management policy
  • Debt Policy
  • i.5.1.1 Debt Management Policies
  • 8.1 A Framework for Managing Bond Funds
    An approach to managing bond proceeds.
• debt reporting
  • A.6 General Bond Statutes (See “CDIAC” and “CDLAC annual filings”)
• debt structure
  • Municipal Debt Structures
  • i.4.1.1 Pre-Issuance Phase
  • i.4.1.3 Post-Issuance Phase
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • Chapter 2. Debt Structures: What Factors Drive Structuring Decisions?
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”
  • 3.1 Introduction: What Constitutes A “Type” Of Debt Obligation
    Features of a debt obligation
  • 3.2 Diagrams of Basic Debt Obligations
    The cash flows for three fundamental debt structures help to explain difference between debt types based upon the security and source of payments.
  • 5.2.2 Disadvantages of a Competitive Sale
  • 5.3.1 Advantages of a Negotiated Public Offering
• DebtWatch
  • 5.4.2 Underwriting Fees and Expenses
  • C.1.1 State and Local Organizations
• default and remedies
  • Default/Event of Default
  • 2.4.8 Events of Default and Remedies
    Actions to be taken in events of default and the remedies to be applied
• defeasance
  • Defeasance
  • 2.3.1.3 Optional Redemption
    Optional redemption of principal
  • 2.4.10 Discharge and Defeasance
    Means by which the debt obligation may discharged or defeased.
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • Figure 8-1 Notice of Material Events (As of August 1, 2018)
  • 9.3.2 Bond Document Provisions
    Role of bond documents in the investment of bond funds.
  • 9.5.1 Arbitrage Rebate and Yield Restriction
• Dillon’s Rule
  • Dillion’s Rule
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
• direct loans
  • Direct Loan
  • Figure 3-2 Private Placement (Direct Lease/Loan)
  • 3.7.1 Direct Loans
    A direct loan is an extension of credit by a bank or other financial institution to a public agency borrower.
  • 5.5.2 Direct Loans
• disclosure
  • Disclosure
  • Continuing Disclosure
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • 6.1 Federal Securities Laws
    While municipal securities are exempt from the registration requirements of federal securities law, they are subject to other rules.
  • 6.1.4.1 Recent SEC Enforcement Focus
  • 6.3.3 Disclosure Standards and Guidance
    Sources of guidance as to what may be desirable to include in an OS.
  • 8.5.1 Audited Financial Statements
  • audited financial statements
    • Annual Report
    • Comprehensive Annual Financial Report (CAFR)
    • 8.5.1 Audited Financial Statements
  • conduit offerings
    • Conduit Financing
    • 6.3.5 Conduit Offerings
      What information should be included regarding the conduit issuer in the OS.
  • continuing disclosure
    • i.5.1.2 Disclosure Policies
    • 2.4.5.1 Debt Covenants
    • 8.4 Continuing Disclosure
      Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • material events
    • Listed Event
    • i.5.1.2 Disclosure Policies
    • 8.4.2 Event Notices
      Event notices required by SEC Rule 15c2-12.
  • Official Statement
    • Official Statement/Preliminary Official Statement
    • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
    • 5.1 What is a public offering?
      Characteristics defining a public sale of debt.
    • 5.5 Private Placements
      Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
    • 6.3 The Official Statement
      The offering document in a public offering of municipal securities.
  • policies
    • Disclosure Policy
    • i.5.1.2 Disclosure Policies
    • 6.3.3 Disclosure Standards and Guidance
      Sources of guidance as to what may be desirable to include in an OS.
  • Preliminary Official Statement
    • Official Statement/Preliminary Official Statement
    • 5.2 Competitive Sales
      The sale of debt using a competitive pricing approach.
    • 6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement
  • public statements and other disclosures
    • 8.5 Other Disclosures to the Market
      Other forms by which issuers may communicate to market participants.
  • secondary disclosure
    • 6.1.3 Secondary Market Disclosure
      Federal securities laws as they apply to communications with secondary market participants.
  • transactions with credit or liquidity support
    • Credit Enhancement
    • Bond Insurance
    • Letter of Credit/Line of Credit
    • 6.3.4 Transactions with Credit or Liquidity Support
      The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
• discount bonds
  • Discount
  • Original Issue Discount
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
• Dodd-Frank Wall Street Reform and Consumer Protection Act
  • Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)
  • i.4.1.1 Pre-Issuance Phase
  • 5.6.1 What Credit Ratings Mean

E

• Electronic Municipal Market Access (EMMA)
  • Electronic Municipal Market Access (EMMA)
  • 5.8.1 Investor Relations and Outreach
  • 8.4 Continuing Disclosure
    Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • 8.4.2 Event Notices
    Event notices required by SEC Rule 15c2-12.
  • 8.5.4 Managing Disclosure Risk
    Approaches to managing the risk improper disclosure.
  • C.2 Regulatory Resources (See “Municipal Securities Rulemaking Board”)
• escrow agent
  • escrow agent
  • i.4.1 Financing Team
  • 5.4.1 Direct Costs of Issuance
• escrow fund
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 9.2.5 Refunding Escrow Funds
    Types of bond funds that may be invested by the issuer.
  • 9.3.2 Bond Document Provisions
    Role of bond documents in the investment of bond funds.
• event of default
  • Default/Event of Default
  • 2.4.8 Events of Default and Remedies
    Actions to be taken in events of default and the remedies to be applied

F

• fees
  • 1.4.8 Fees and Charges
    Sources of Revenues securing debt obligations: Fees and charges defined
  • 1.4.9 Property-Related Fees and Charges (See “charges” and “property-related fees and charges”)
    Sources of Revenues securing debt obligations: Property-related fees and charges defined
• fiduciary
  • Fiduciary
  • Fiscal Agent
  • Trustee
  • i.3.2.3 Responsibilities of Elected and Appointed Officials
  • 2.4.9 Fiduciary Rights and Duties
  • 6.2.1 Municipal Advisors and Underwriters
  • 9.3.3 Investment Policies (See “trustee”)
    Role of investment policies in the investment of bond funds.
• financing leases
  • Financing Lease
  • Figure 3-4 Lease-Supported Debt
  • 3.6.1 Financing Leases (See “lease-supported debt,” “lease revenue bonds” and “Ofner-Dean lease exception”)
    The public agency obtains financing by entering into a lease for which it makes rental payments
• financing team
  • i.4.1 Financing Team
  • i.4.1.1 Pre-Issuance Phase
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • Chapter 5. Sale of Municipal Debt
    Considerations made in the sale of a municipal security.
  • 5.6.2 The Credit Rating Process
  • 6.2 Roles and Responsibilities of Other Financing Participants
    The duties and obligations of consultants and advisors subject to rules and professional responsibility standards.
  • 6.3 The Official Statement
    The offering document in a public offering of municipal securities.
  • 7.1.2 Report of Final Sale
  • 9.1 A Team Approach to Investing Bond Funds
    Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is an important component of minimizing overall, or “net,” borrowing costs.
• fiscal agent
  • Fiscal Agent
  • Trustee
  • Fiduciary
  • i.4.1.2 Issuance Phase
  • 3.3.4 TRANs and RANs
    Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
  • 9.3.1 Statutory Authority (See “trustee”)
    Controlling statutory authority for investment of bond funds.
• fixed rate bonds
  • Fixed Rate
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
  • 3.4.1 Long-Term, Fixed-Rate Debt
• floating-rate notes
  • Floating Rate
  • 2.2.2.3 Variable-Rate Debt
  • 3.4.2 Long-Term, Variable-Rate Debt
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.

G

• general bond statutes
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • 1.1.2 General Bond Statutes
    Statutory authorities broadly applicable to public agencies.
  • A.6 General Bond Statutes
• general fund obligations
  • General Fund
  • i.4.6 What Financing Options are Available
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 3.3.2 General Fund Obligations
    Debt obligations backed by a public agency’s general fund.
• general obligation (GO) bonds
  • i.4.6 What Financing Options are Available
  • i.5.2.1 Proposition 39 General Obligation Bonds
  • 1.4.4 Ad Valorem Real Property Taxes Securing Voter-Approved Obligations
    The use of Ad Valorem property taxes to secure debt obligations.
  • 1.7.6 Proposition 39 (2000), School Facilities Local Vote Act of 2000
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • 3.9.1 State General Obligation Bonds
  • B.1.3.1 Local General Obligation Bonds
  • 7.2.4 General Obligation Bond Issuance Costs
• general taxes
  • General Tax
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.5 General Taxes
    Sources of Revenues securing debt obligations: General taxes defined
  • 3.3.3 Sales Tax Revenue Bonds
    Debt obligations that are payable from and secured by revenues from the imposition of a sales and use tax, or a transaction and use tax, on retail transactions
• governing board responsibilities
  • i.3.2.3 Responsibilities of Elected and Appointed Officials
  • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
  • Chapter 6. Securities Laws Pertaining to Municipal Debt
    Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
  • 6.1.1 Antifraud Rules
    Statements by municipal issuers to investors, or potential investors, and even statements to the public generally, if likely to be heard and relied upon by the securities market are subject to the anitfraud provisions of federal securities laws.
  • 6.1.2 Governing Board Responsibilities
    Role of governing board in complying with federal securities laws.
  • 7.2.5 School and Community College Bond Issuance Costs
  • 7.3 Prohibition of Gift of Public Funds
    Prohibitions imposed on a public agency from making any gift of public funds or from lending its public credit to any person.
  • 8.4.1 Annual Reports
    Annual financial reports submitted as a part of continuing disclosures made by issuers.
  • 8.5.1 Audited Financial Statements
  • B.1.3.1.1 Process for Approval of Local School District GO Bonds
  • D.1 Public Agencies and Bankruptcy
  • D.1.1 Eligibility
• grant anticipation notes (GANs)
  • i.4.6 What Financing Options are Available
  • 2.2.2.2 Short-Term Debt
  • 3.7.3 Bond Anticipation Notes and Grant Anticipation Notes
    Bond anticipation notes (BANs) are notes issued in advance, generally several years in advance, of the expected date of long-term financing for a project.
• green bonds
  • Green Bonds
  • 5.7.2 Targeting Investors
• guaranteed investment contracts (GICs)
  • Guaranteed Investment Contract (GIC)
  • Investment Agreement
  • 2.4.7 Investments
    Decisions regarding the investment of proceeds
  • 4.8.3.2 Guaranteed Investment Contracts
  • 9.4.2 Investments Specific to Bond Funds
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.

H

• hedge bond restrictions
  • Hedge Bonds
  • 4.4.1 Issue Sizing and Term
    Limits on issue size and term pursuant to the Tax Code.
  • 4.8.3.2 Guaranteed Investment Contracts
• hedge/hedging
  • Hedge
  • Derivative
  • Interest Rate Swap
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate
  • 4.8.3 Yield
    The yield on a bond issue defined.
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • 9.3.1 Statutory Authority
    Controlling statutory authority for investment of bond funds.
  • A.6 General Bond Statutes
• Home Rule
  • Home Rule
  • 1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns
    Basis of authority provided to charter cities

I

• indenture
  • Indenture/Bond Resolution (General, Supplemental, and Series)
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 2.3.1 Redemption or Prepayment
    Use of a redemption or prepayment of principal to address risk or investor interest
  • 3.1.6 Types of Debt Instruments
    Basic categories of debt instruments: bonds, notes, direct leases, and certificates of participation
• index debt
  • Index Debt
  • 3.4.2.1 Index Debt
    The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.
• independent registered municipal advisor (IRMA)
  • Municipal Advisor
  • 6.2.1 Municipal Advisors and Underwriters
• industrial development bonds (IDB)
  • i.4.6 What Financing Options are Available
  • 3.3.9.2 Small Manufacturing Facilities
    A type of conduit financing used to finance manufacturing facilities and directly related and ancillary facilities.
  • 4.7.1.5 Qualified Small-Issue Bonds (See “California Debt Limit Allocation Committee annual flings,” “qualified private activity bond categories – qualified small-issue bonds” and “volume cap”)
    A category of private activity bond
• initiative power
  • Initiative Power
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 1.6 The Initiative and Referendum Powers
    The ability of the voters to effect changes to the State Constitution through Initiative or Referendum.
  • 1.7 Historical Overview of Voter-Approved Limitations on Local Government Revenues
    Summary of state-level initiatives directed at the fiscal affairs of California state and local government.
  • A.1 California Consitution Provisions Relating to Local Public Agency Debt
  • impact on debt
    • 1.6.1 Initiative Power and its Impact on Debt
• installment sale agreements
  • Installment Sale Agreement/Installment Purchase Contract
  • Certificate of Participation (COP)
  • i.4.6 What Financing Options are Available
  • 2.4 Other Common Document Provisions
    Structural features of debt obligations often contained in bond documents.
  • 3.3.6.2 Public Enterprise Revenue Installment Sale Agreements
  • 3.6 Unique Public Agency Financing to Address Legal Constraints
    Certain debt obligations were created to address potential hurdles California public agencies may face in issuing debt.
  • 3.6.1 Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments
  • 3.6.2 Installment Sale Agreements
    Installment sale agreement financings are based on a public agency’s legal authority to purchase property and to appropriate annual funds to meet this obligation.
  • 3.6.3 Certificates of Participation
    A debt obligatins that involve selling the the right to receive the payments under a lease agreement to other parties.
  • 3.7.1 Direct Loans
    A direct loan is an extension of credit by a bank or other financial institution to a public agency borrower.
  • 3.7.2 Direct Leases
    The direct lease (or lease-purchase) structure is most often used to finance the acquisition of equipment such as fire trucks.
  • 5.5.2 Direct Loans (See “certificates of participation”)
    
• interest rate
  • Interest/Interest Rate
  • i.4.2.4 Decision #4 – Select an interest rate type
  • i.4.2.6 Decision #6 – Decide whether the debt will be tax-exempt
  • i.4.6 What Financing Options are Available
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • 2.2.2 Term and Interest Rate Mode
    Structural features: terms and interest rate mode.
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
  • 2.2.2.3 Variable-Rate Debt
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate
  • 3.1.2 Payment Term and Interest Rate
    Terms of the repayment
  • 3.4 Interest Rate and Payment Terms
    A category of debt obligation organized around the interest rate and payment terms of the debt obligations.
  • 3.4.1 Long-Term, Fixed-Rate Debt
  • 3.4.2 Long-Term, Variable-Rate Debt
• interest rate caps, floors, and collars
  • Derivative
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate obligation
• interest rate mode conversion
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.
• interest rate risk
  • 2.2.2.3 Variable-Rate Debt
• interest rate swaps and synthetic structures
  • Interest Rate Swap
  • Derivative
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate obligation
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • A.6 General Bond Statutes (See “hedging”)
• intergenerational equity
  • i.2.1 Decision #1 – What is the right source of funding?
  • i.2.2 Decision #2 – What is the right source of financing?
  • 2.2.2 Term and Interest Rate Mode
    Structural features: terms and interest rate mode.
• interim financing
  • 2.2.2 Term and Interest Rate Mode
    Structural features: terms and interest rate mode.
  • 2.2.2.2 Short-Term Debt
  • 3.4.3 Commercial Paper
    A debt obligation that involves the issuance and marketing of short-term notes.
  • 3.7.3 Bond Anticipation Notes and Grant Anticipation Notes
    Bond anticipation notes (BANs) are notes issued in advance, generally several years in advance, of the expected date of long-term financing for a project.
  • B.1.5.2 Bond Anticipation Notes
• Internal Revenue Code of 1986
  • Tax Code
  • Treasury Regulations
  • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • Chapter 4. Federal and State Tax Law Requirements (See “private activity bonds”)
  • Tax Code
    • i.4.5 Issuing Tax-Exempt Debt
    • i.4.5.1 Requirement #1 – The debt must be issued by a qualified issuer
    • i.4.5.2 Requirement #2 – The debt must finance a qualifying project and satisfy ongoing requirements and limitations regarding the use of the project
    • i.4.5.3 Requirement #3 – Manage the arbitrage rules
    • i.5.1.1 Debt Management Policies
• investment agreements
  • Investment agreement
  • Guaranteed Investment Contract (GIC)
  • 4.8.3.2 Guaranteed Investment Contracts
  • 9.4.2 Investments Specific to Bond Funds
  • 9.5.2 Investment Considerations (See “guaranteed investment contracts”)
    Issuer considerations regarding investment of bond funds.
• investment considerations
  • 9.3.3 Investment Policies
    Role of investment policies in the investment of bond funds.
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
• investment policies
  • i.5.1.1 Debt Management Policies
  • 9.1 A Team Approach to Investing Bond Funds
    Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is an important component of minimizing overall, or “net,” borrowing costs.
  • 9.3 Investment Authority and Controlling Documents
    Investment authority and controlling documents regarding the investment of bond funds.
  • 9.3.2 Bond Document Provisions
    Role of bond documents in the investment of bond funds.
  • 9.3.3 Investment Policies
    Role of investment policies in the investment of bond funds.
  • 9.6 Investment Review and Oversight
    The importance of review and oversight in the management of bond fund investments.
• investment of bond proceeds
  • Investment of Proceeds
  • Negative Arbitrage
  • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
  • i.5.1.1 Debt Management Policies
  • 2.4.6.3 Additional Debt Test Calculations
  • 4.8.2 Bond Proceeds
    Different arbitrage rules apply to different categories of bond proceeds
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • 8.3.6 Recordkeeping and Retention
  • 9.4.1 Permitted Investments (See “bond funds management – investing bond proceeds”)
    Types of investment vehicles that may be used to invest bond funds.
• investor relations
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • i.5.1 Managing Your Agency’s Debt Financings
  • i.5.1.3 Investor Relations Policies
  • i.5.2 California Review and Reporting Requirements on Bonds
  • i.5.2.3 Conduit Issuer Reporting
  • 5.8 Improving Transparency and Investor Access to the Municipal Market
    The use of investor websites and EMMA among other technologies to communicate with market participants.
  • 5.8.1 Investor Relations and Outreach
  • 8.5.4 Managing Disclosure Risk
    Approaches to managing the risk improper disclosure.
  • questions from investors
    • 8.5.3 Questions from Investors
      Issuer considerations when responding to investor questions.
  • websites
    • 5.8.1 Investor Relations and Outreach
    • 8.5.2 Informal Statements and Websites
    • 8.5.4 Managing Disclosure Risk (See “Electronic Municipal Market Access (EMMA)”)
      Approaches to managing the risk improper disclosure.
• investors
  • Investors/Institutional Investors/Retail Investors
  • i.2.2 Decision #2 – What is the right source of financing?
  • i.2.3 Decision #3 – Can the municipal market help the public agency meet its capital financing needs?
  • i.3.2 Legal Responsibilities of Issuers of Municipal Securities
  • i.4.1.2 Issuance Phase
  • i.4.2.5 Decision #5 – Understand what the agency commits to do in the future
  • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
  • i.5.1.3 Investor Relations Policies
  • 5.7 How Bonds Are Marketed to Investors
    In an effort to achieve the financing objectives of the issuer, including the lowest interest costs, a public agency issuer may seek to market a debt issuance to investors in a particular market
  • institutional
    • 2.2.2.3 Variable-Rate Debt
    • 5.6 Credit Ratings
      Credit ratings reflect the opinion of the credit rating agency as to the probability that interest or principal payments on a security will not be paid in full and on time.
    • 5.7.2 Targeting Investors
  • marketing strategy
    • 5.7.1 Marketing Strategy
    • 6.2.1 Municipal Advisors and Underwriters
    • 6.4 Other Marketing Activities and Other Public Statements
  • retail
    • 5.7.2 Targeting Investors
    • 5.8 Improving Transparency and Investor Access to the Municipal Market
      The use of investor websites and EMMA among other technologies to communicate with market participants.
  • sophisticated investor
    • 2.2.2.1 Long-Term, Fixed-Rate Debt
    • 5.5 Private Placements
      Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
• issuer responsibilities
  • Issuer
  • Introduction
  • i.1 Understand Your Public Agency
  • i.2 Decide Whether Debt Financings Is Appropriate For Your Agency
  • i.3 Apply the Appropriate Analysis to the Decision to Use Debt Financing
  • i.4 Lead the Process of Issuing Your Debt
  • i.5 Manage Your Debt After It Is Issued
  • 6.1.2 Governing Board Responsibilities
    Role of governing board in complying with federal securities laws.
• issuer types
  • Issuer
  • Joint Powers Authority
  • 4.2 Obligations of a State or a Political Subdivision
  • Figure B-1 Statutory Debt Limits (See “conduit financing” and “Joint Exercise of Powers Agency (JPA)”)
  • 63-20 Corporations
    • 4.2.3.2 63-20 Corporations
  • Constituted Authorities
    • i.4.5.1 Requirement #1 – The debt must be issued by a qualified issuer
    • 4.2.3.1 Constituted Authorities
  • On-Behalf of
    • 4.2.3 “On Behalf of” Issuers
      “On behalf of” Issuers defined for the purposes of the Tax Code.

J

• Joint Exercise of Powers Agency (JPA)
  • 1.2.3 Scope of Debt Limit – When Does the Debt Limit Apply?
  • 1.3.2 Joint Powers Authorities
    Debt issued by a joint powers authority is not subject to the Constitutional debt limit.
  • 3.6.4 Joint Powers Agency or Authority (JPA) Bonds and Other Issuances
    Due to the extensive bond issuance authority afforded JPAs under government code, JPAs are a common vehicle for issuing bonds that are backed by either a lease or installment sale agreement.
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • 3.8 Joint Exercise of Powers Agencies
    A joint exercise of powers agency or authority (JPA) is a separate governmental entity formed by two or more governmental entities.
• JPA bonds
  • Joint Powers Authority
  • 1.3.2 Joint Powers Authorities
    Debt issued by a joint powers authority is not subject to the Constitutional debt limit.
  • 3.6.4 Joint Powers Agency or Authority (JPA) Bonds and Other Issuances
    Due to the extensive bond issuance authority afforded JPAs under government code, JPAs are a common vehicle for issuing bonds that are backed by either a lease or installment sale agreement.
  • 7.1.5 Marks-Roos Reports (See “financing leases,” “installment sale agreements” and “revenue bonds”)

K

L

• large-scale pools
  • Pooling of Debt Issues
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • Figure 3-6 Marks-Roos Large Scale Pool
• lease-supported debt
  • Lessor/Lessee
  • Financing Lease
  • Direct Lease
  • 3.2.3 Lease-Supported Debt
    Lease-supported debt represents a blend of direct debt and debt issued on behalf of another entity.
  • Figure 3-2 Private Placement (Direct Lease/Loan)
  • Figure 3-4 Lease-Supported Debt
  • 3.7.2 Direct Leases (See “financing leases” and “lease revenue bonds”)
    The direct lease (or lease-purchase) structure is most often used to finance the acquisition of equipment such as fire trucks.
• lease revenue bonds
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • i.4.6 What Financing Options are Available
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • 1.3.1 Lease Revenue Bonds and Certificates of Participation
    Debt obligation structured to comply with the Lease exception to the Constitutional debt limit.
  • 3.1.4 Unique Public Agency Financings that Address Legal Constraints or Public Policy Issues
    California public finance professionals have structured some types of debt to address special legal constraints.
  • 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
  • 3.6.1 Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments
  • 3.6.4 Joint Powers Agency or Authority (JPA) Bonds and Other Issuances
    Due to the extensive bond issuance authority afforded JPAs under government code, JPAs are a common vehicle for issuing bonds that are backed by either a lease or installment sale agreement.
  • 3.9.2 State Public Works Board Lease Revenue Bonds
    The California State Public Works Board issues lease revenue bonds to finance capital improvement for state agencies.
• legal documents
  • i.4.1.2 Issuance Phase
  • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 2.4 Other Common Document Provisions
    Structural features of debt obligations often contained in bond documents.
  • 8.1.1 Bond Documents
    Bond documents that contain provisions that control the administration of bond funds.
  • authorizing resolutions
    • Bond Resolution
    • Indenture/Bond Resolution (General, Supplemental, and Series)
    • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
    • 2.3 Structural Factors Addressing Risk and Investor Interests
      Ways the structure of a debt obligation may address risk and investor interests.
    • 4.4.5 Reimbursement of Prior Expenditures
      Reimbursement of Prior Expenditures pursuant to the Tax Code.
    • A.6 General Bond Statutes
  • bond purchase agreement
    • Bond Purchase Contract or Agreement
    • 5.3.3 Documentation for a Negotiated Public Offering
  • continuing disclosure agreement
    • Continuing Disclosure Agreement
    • 8.4 Continuing Disclosure
      Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
    • 8.5 Other Disclosures to the Market
      Other forms by which issuers may communicate to market participants.
  • covenants
    • Covenants
    • i.2.3 Decision #3 – Can the municipal market help the public agency meet its capital financing needs?
    • i.5.1.1 Debt Management Policies
    • i.5.2.1 Proposition 39 General Obligation Bonds
    • 2.4.5 Covenants
      Promises or agreements made by the borrower to lenders and other financial partners.
    • 8.1.1 Bond Documents
      Bond documents that contain provisions that control the administration of bond funds.
    • debt covenants
      • 2.4.5.1 Debt Covenants
    • general financial covenants
      • 2.4.5.2 General Financial Covenants
    • property covenants
      • 2.4.5.3 Property Covenants
    • rate covenant
      • 2.4.5.4 System Covenants
      • 3.3.6 Enterprise Fund Debt Obligations
        Debt obligations payable from and secured by revenues received from a local government “proprietary” enterprise.
      • 3.3.6.1 Public Enterprise Revenue Bonds
    • system covenants
      • 2.4.5.4 System Covenants
  • indenture
    • Indenture/Bond Resolution (General, Supplemental, and Series)
    • i.4.1.2 Issuance Phase
    • 1.1.2 General Bond Statutes
      Statutory authorities broadly applicable to public agencies.
    • 2.3 Structural Factors Addressing Risk and Investor Interests
      Ways the structure of a debt obligation may address risk and investor interests.
    • 3.1.6 Types of Debt Instruments
      Basic categories of debt instruments: bonds, notes, direct leases, and certificates of participation
    • 6.2.2 Attorneys
    • 8.1.1 Bond Documents
      Bond documents that contain provisions that control the administration of bond funds.
    • 9.2 Types of Funds Available for Investment
    • A.6 General Bond Statutes
  • loan agreement
    • Loan Agreement
    • i.4.1.2 Issuance Phase
    • 8.1.1 Bond Documents
      Bond documents that contain provisions that control the administration of bond funds.
  • Official Statement (See “disclosure”)
    • Official Statement/Preliminary Official Statement
  • permitted investments
    • Permitted Investments
    • 9.3.1 Statutory Authority
      Controlling statutory authority for investment of bond funds.
    • 9.3.2 Bond Document Provisions
      Role of bond documents in the investment of bond funds.
    • 9.4.1 Permitted Investments
      Types of investment vehicles that may be used to invest bond funds.
    • 9.5.2 Investment Considerations
      Issuer considerations regarding investment of bond funds.
  • provisions
    • 2.4 Other Common Document Provisions
      Structural features of debt obligations often contained in bond documents.
    • additional debt
      • Additional Bonds
      • Additional Bonds Test/Additional Bonds Covenant
      • 2.4.6 Additional Debt
        Agreements between borrowers and lenders regarding additional debt obligations
    • amendments
      • 2.4.11 Amendments
        Procedures for amending bond documents and related debt security documents.
    • anti-fraud(See “anti-fraud”)
      • Anti-Fraud Provisions
    • application of proceeds
      • 2.4.1 Application of Proceeds
        How the proceeds of debt may be applied.
    • funds and accounts/flow of funds
      • Bond Fund
      • Debt Service Account(Bond Account Principal)
      • Flow of Funds
      • Governmental Funds
      • Reserve Account(Bond Reserve Account)
      • Special Fund
      • 2.4.3 Funds and Accounts; Flow of Funds
        How funds will flow from borrower to lender.
    • source of payment
      • Pledge
      • 2.4.2 Source of Payment; Pledge
        The pledge of revenues securing the debt obligation
  • reimbursement resolutions (See “reimbursement of prior expenditures” and “resolution – inducement/reimbursement”)
    • Reimbursement Resolution
  • tax certificate
    • Tax Certificate
    • Arbitrage Certificate
    • 4.11 Bank Qualified Bonds
      The ability for banks to benefit from tax-exempt bonds under the Tax Code.
    • 8.3 Post-Issuance Federal Tax Law Requirements
      Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax-exempt” status.
  • trust agreement (See “legal documents – indenture” and “resolution- inducement/reimbursement”)
    • 2.3 Structural Factors Addressing Risk and Investor Interests (See “legal documents – indenture”)
      Ways the structure of a debt obligation may address risk and investor interests.
• letters of credit
  • Letter of Credit
  • 2.3.2.3 Letters of Credit
    Liquidity Support: Letter of Credit
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”
• line of credit and standby purchase agreement
  • Line of Credit
  • Standby Purchase Agreement
  • 2.3.2.4 Lines of Credit and Standby Bond Purchase Agreements
    Liquidity Support: Lines of Credit
• liquidity support
  • Liquidity Facility or Liquidity Support
  • 2.3.2 Credit Enhancement and Liquidity Support
    Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
  • 6.3.4 Transactions with Credit or Liquidity Support
    The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO” (See “credit facility”)
• listed event
  • Listed Event
  • 8.4.2 Event Notices
    Event notices required by SEC Rule 15c2-12.
  • 8.5.4 Managing Disclosure Risk (See “disclosure” and “material events”)
    Approaches to managing the risk improper disclosure.
• local debt policies
  • Debt Policy
  • i.5.1.1 Debt Management Policies
  • i.5.2.5 Reports to the California Debt and Investment Advisory Commission
  • 7.1.1 Report of Proposed Debt Issuance
• local revenue categories
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • Figure 1-1 Public Agency Revenue Sources by Category (See “California Constitution”)
• London Interbank Offered Rate (LIBOR)
  • London Interbank Offered Rate (LIBOR)
  • 3.4.2.1 Index Debt
    The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.

M

• marketing to investors
  • Marketability
  • 5.7 How Bonds Are Marketed to Investors
    In an effort to achieve the financing objectives of the issuer, including the lowest interest costs, a public agency issuer may seek to market a debt issuance to investors in a particular market
  • 6.4 Other Marketing Activities and Other Public Statements (See “investors – marketing strategy”)
• Marks-Roos bonds (See “Marks-Roos Local Bond Pooling Act of 1985”)
  • Marks-Roos Bonds
• Marks-Roos Local Bond Pooling Act of 1985
  • Marks-Roos Bonds
  • i.5.2.2 Marks- and Mello-Roos Bonds
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • 3.8 Joint Exercise of Powers Agencies
    A joint exercise of powers agency or authority (JPA) is a separate governmental entity formed by two or more governmental entities.
  • 7.1.5 Marks-Roos Reports
  • 7.2.3 Joint Powers Authority Notices
  • A.4 Joint Powers Agencies/Authorities
• Mello-Roos Community Facilities Act of 1982
  • Mello-Roos Bonds
  • i.5.2.2 Marks- and Mello-Roos Bonds
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello-Roos bonds are payable from special taxes imposed on real property.
  • 7.1.4 Mello-Roos Community Facilities District Reports
  • 7.2.6 Mello-Roos Community Facilities Reports
  • A.5 Financing Tools Contained in Statute
• Mello-Roos local goals and policies
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello-Roos bonds are payable from special taxes imposed on real property.
• Mello-Roos special tax
  • Mello-Roos Bonds
  • i.5.2.2 Marks- and Mello-Roos Bonds
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.6 Special Taxes
    Sources of Revenues securing debt obligations: Special taxes defined
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello-Roos bonds are payable from special taxes imposed on real property.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • B.1.4.1 Community Facilities Districts/Mello-Roos Bonds
• municipal advisor
  • Municipal Advisor
  • i.4.1.1 Pre-Issuance Phase
  • i.4.1.2 Issuance Phase
  • i.4.1.3 Post-Issuance Phase
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 5.1.1 Sale Methods – Competitive or Negotiated Sale
  • 5.6.2 The Credit Rating Process
  • 6.2.1 Municipal Advisors and Underwriters
  • 7.2.1 Local Bond Disclosures
  • 9.1 A Team Approach to Investing Bond Funds
    Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is an important component of minimizing overall, or “net,” borrowing costs.
• municipal affairs
  • Municipal Affairs
  • Home Rule
  • 1.1.3 Borrowing Authority of Charter Cities
    Authority to borrow provided to charter cities by their charter.
  • 1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns
    Basis of authority provided to charter cities
  • 1.5.2 Charter City Financing (See “charter city powers”)
    How the authority of a charter city may affect its debt financings
• Municipal Securities Rulemaking Board (MSRB)
  • Municipal Securities Rulemaking Board (MSRB)
  • Introduction
  • Chapter 6. Securities Laws Pertaining to Municipal Debt
    Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
  • Electronic Municipal Market Access (EMMA)
    • Electronic Municipal Market Access (EMMA)
    • Nationally Recognized Municipal Securities Information Repository (NRMSIR)
    • i.5.1.3 Investor Relations Policies
    • 5.6 Credit Ratings
      Credit ratings reflect the opinion of the credit rating agency as to the probability that interest or principal payments on a security will not be paid in full and on time.
    • 5.8.1 Investor Relations and Outreach
    • 8.4 Continuing Disclosure
      Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
    • 8.4.1 Annual Reports
      Annual financial reports submitted as a part of continuing disclosures made by issuers.
    • 8.4.2 Event Notices
      Event notices required by SEC Rule 15c2-12.
    • 8.5.4 Managing Disclosure Risk (See “disclosure”)
      Approaches to managing the risk improper disclosure.
  • Rules
    • i.4.1.3 Post-Issuance Phase
    • 5.3.2 Disadvantages of a Negotiated Public Offering
    • 6.2.1 Municipal Advisors and Underwriters

N

• National Federation of Municipal Analysts (NFMA)
  • 6.3.3 Disclosure Standards and Guidance
    Sources of guidance as to what may be desirable to include in an OS.
• National Securities Market Improvement Act (NSMIA)
  • 6.5.2 Securities Laws in Other States
• Nationally Recognized Statistical Rating Organization (NRSRO)
  • Nationally Recognized Statistical Rating Organization (NRSRO)
  • Credit Rating
  • 5.6.1 What Credit Ratings Mean
  • 9.4.1 Permitted Investments
    Types of investment vehicles that may be used to invest bond funds.
  • C.3.1 Regulatory Oversight
• negotiated sale
  • Negotiated Sale
  • Private Sale
  • Public Offering
  • Bond Purchase Contract or Agreement
  • Good Faith Deposit
  • i.4.1.1 Pre-Issuance Phase
  • 3.8 Joint Exercise of Powers Agencies
    A joint exercise of powers agency or authority (JPA) is a separate governmental entity formed by two or more governmental entities.
  • 5.1 What is a public offering?
    Characteristics defining a public sale of debt.
  • 5.1.1 Sale Methods – Competitive or Negotiated Sale
  • 5.3 Negotiated Public Offerings
    The sale of debt using a negotiated approach to pricing.
  • 5.4.2 Underwriting Fees and Expenses
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
  • 5.7 How Bonds Are Marketed to Investors
    In an effort to achieve the financing objectives of the issuer, including the lowest interest costs, a public agency issuer may seek to market a debt issuance to investors in a particular market
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.3 The Official Statement
    The offering document in a public offering of municipal securities.
  • Figure 7-1
    Reports that Debt Issuers Must Submit to CDIAC
  • 7.1.2 Report of Final Sale
  • B.1.3.1.1 Process for Approval of Local School District GO Bonds
• nongovernmental borrower
  • Nongovernmental Borrower
  • Conduit Financing
  • Private Activity Bonds
  • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
  • i.4.5.2 Requirement #2 – The debt must finance a qualifying project and satisfy ongoing requirements and limitations regarding the use of the project
  • 3.3.9 Conduit Revenue Bonds
    “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.6.1 Private Business Use
    One of several tests of private activity or benefit.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
  • 4.7.1.5 Qualified Small-Issue Bonds
    A category of private activity bond
  • 4.7.2.2 TEFRA Public Requirements
    Requirements of private activity bonds
  • 7.2.1 Local Bond Disclosures
  • 8.3.3 Monitoring Use of Bond-Financed Property
  • 8.3.6 Recordkeeping and Retention
• notes
  • 3.1.6 Types of Debt Instruments
    Basic categories of debt instruments: bonds, notes, direct leases, and certificates of participation
  • 3.2.1 Direct Debt Obligation
    In a direct debt obligation the issuer is both the recipient of the proceeds and the source of repayment.
  • 3.4.2 Long-Term, Variable-Rate Debt
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.
  • 3.4.3 Commercial Paper (See “short-term debt”)
    A debt obligation that involves the issuance and marketing of short-term notes.
• notice of sale (NOS)
  • Notice of Sale
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 5.2.2 Disadvantages of a Competitive Sale
  • 5.2.3 Documentation for a Competitive Sale

O

• obligations imposed by law exception
  • Debt Limit Exceptions
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • 1.2.4.6 Obligations Imposed by Law Exception
    Debt limit exception based upon an obligation that is not discretionary on the part of the public agency.
  • 3.3.2.2 Pension Obligation Bonds
  • 3.3.5 Teeter Bonds
    Teeter bonds are secured by a pledge of the delinquent property tax receivables and are generally also payable from the county’s general fund.
• Official Statement
  • Official Statement/Preliminary Official Statement
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • 5.1 What is a public offering?
    Characteristics defining a public sale of debt.
  • Chapter 6. Securities Laws Pertaining to Municipal Debt
    Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
  • 6.3 The Official Statement
    The offering document in a public offering of municipal securities.
  • 6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement
  • 6.3.2 Contents of the Official Statement (See “disclosure”)
• Offner-Dean lease exception
  • “Offner-Dean” Lease
  • Debt Limit Exceptions
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 1.2.4 Exceptions to the Debt Limit
    California courts recognize several exceptions to the constitutional debt limit.
  • 1.2.4.3 Lease Exception (the “Offner-Dean Lease Exception”)
    Debt limit exception based upon a debt obligation structured as a lease financing
  • 1.3.1 Lease Revenue Bonds and Certificates of Participation
    Debt obligation structured to comply with the Lease exception to the Constitutional debt limit.
  • 1.3.2 Joint Powers Authorities
    Debt issued by a joint powers authority is not subject to the Constitutional debt limit.
  • 2.4.8.2 Remedies
    Different types of remedies in the case of a default
  • 3.2.3 Lease-Supported Debt
    Lease-supported debt represents a blend of direct debt and debt issued on behalf of another entity.
  • 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
  • 3.6.1 Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments
  • 3.9.2 State Public Works Board Lease Revenue Bonds
    The California State Public Works Board issues lease revenue bonds to finance capital improvement for state agencies.
  • B.1.3.3 Certificates of Participation/Leases
• open pools
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
• organic statutes
  • Organic ACT
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • 1.1.1 Statutory Authority to Borrow
    All public agencies are subject to the California Constitution and the powers granted to them or that are essential to their purpose.
  • A.3 Organic Statutes of Specific Entities Authorized to Issue Debt
• other post-employment benefit (OPEB)
  • Other Post-Employment Benefits (OPEBS)
  • 3.3.2.2 Pension Obligation Bonds
• overburdening restrictions
  • 4.4.1 Issue Sizing and Term
    Limits on issue size and term pursuant to the Tax Code.

P

• PAYGO
  • i.2.2 Decision #2 – What is the right source of financing?
  • i.2.2.1 When should a public agency consider PAYGO?
  • B.1.4.2 Developer Fees
• par bonds
  • PAR/PAR VALUE
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
• paying agent
  • PAYING AGENT
  • FISCAL AGENT
  • TRUSTEE
  • i.4.1.2 Issuance Phase
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 2.4.3 Funds and Accounts; Flow of Funds
    How funds will flow from borrower to lender.
  • 2.4.9 Fiduciary Rights and Duties
    The fiduciary provisions in bond documents set forth the qualification requirements for fiduciaries and the terms of their appointment.
  • 3.1.6 Types of Debt Instruments
    Basic categories of debt instruments: bonds, notes, direct leases, and certificates of participation
  • 5.4.1 Direct Costs of Issuance
• payment test, (See “private security test”)
• pension obligation bonds(POBs)
  • PENSION OBLIGATION BONDS
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • i.4.6 What Financing Options are Available
  • 1.2.4.6 Obligations Imposed by Law Exception
    Debt limit exception based upon an obligation that is not discretionary on the part of the public agency.
  • 3.3.2.2 Pension Obligation Bonds
• permitted investments
  • PERMITTED INVESTMENTS
  • 8.1.1 Bond Documents
    Bond documents that contain provisions that control the administration of bond funds.
  • 9.3.1 Statutory Authority
    Controlling statutory authority for investment of bond funds.
  • 9.3.2 Bond Document Provisions
    Role of bond documents in the investment of bond funds.
  • 9.4.1 Permitted Investments
    Types of investment vehicles that may be used to invest bond funds.
  • A.6 General Bond Statutes (See “legal documents”)
• placement agent
  • PLACEMENT AGENT
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
• policies (See “bond funds management written policies and procedures”, “disclosure policies”,”investment policies”,”local debt policies”, and “Mello-Roos local goals and policies”
  • DEBT POLICY
  • DISCLOSURE POLICY
• political subdivision
  • i.4.5.1 Requirement #1 – The debt must be issued by a qualified issuer
  • 4.2 Obligations of a State or a Political Subdivision
  • 4.2.2 Political Subdivision – Sovereign Powers Requirement
    Political subdivision defined for purposes of the Tax Code.
  • 6.1 Federal Securities Laws
    While municipal securities are exempt from the registration requirements of federal securities law, they are subject to other rules.
  • D.1.1 Eligibility
• pooled financing
  • POOLING OF DEBT ISSUES
  • 3.3.4 TRANs and RANs
    Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • 4.9.1.4 2-Year Expenditure Exception
    Exception to arbitrage rebate requirements in Tax Code.
  • 4.10.4 Limitations on Pooled Financing Loans
  • 5.1.1 Sale Methods – Competitive or Negotiated Sale
• post-issuance compliance
  • 8.3.1 Post-Issuance Tax Compliance Programs (See “bond funds management compliance program”)
• Preliminary Official Statement
  • OFFICIAL STATEMENT/PRELIMINARY OFFICIAL STATEMENT
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement (See “disclosure”)
• premium bonds
  • PREMIUM BOND
  • PREMIUM
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
• prepayment
  • REDEMPTION
  • CALL
  • 2.3.1 Redemption or Prepayment
    Use of a redemption or prepayment of principal to address risk or investor interest
• private activity bonds
  • PRIVATE ACTIVITY BONDS
  • QUALIFIED PRIVATE ACTIVITY BONDS
  • CONDUIT FINANCING
  • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
  • 3.2.2 Debt Obligations Issued on behalf of a Borrower
    With debt issued on behalf of another borrower, the issuer is neither the recipient of the proceeds nor, in most cases, the source of repayment.
  • Figure 3-3 Debt Obligations Issued On Behalf of a Borrower
  • 3.3.9 Conduit Revenue Bonds
    “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
  • 3.3.9.2 Small Manufacturing Facilities
    “A type of conduit financing used to finance finance manufacturing facilities and directly related and ancillary facilities.”
  • 3.5 Tax Treatment of Municipal Bonds
    A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax purposes.
  • 4 Federal and State Tax Law Requirements
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.7 Qualified Private Activity Bonds
    Bonds that meet the Private Activity Bonds Tests will not be treated as governmental bonds, and instead will be private activity bonds. The interest on private activity bonds will not be tax exempt unless the bonds meet the requirements to be issued as qualified private activity bonds.
  • 4.8.2.2 Expenditure of Gross Proceeds
  • 7.2.7 California Debt Limit Allocation Committee Reports
  • 8.1 A Framework for Managing Bond Funds
    An approach to managing bond proceeds.
  • 8.3.1 Post-Issuance Tax Compliance Programs
  • 8.3.3 Monitoring Use of Bond-Financed Property
  • 8.3.7 Changes in Use of Bond-Financed Property (See “qualified private activity bonds”)
• private activity bond test
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
• private business use
  • PRIVATE USE
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.6.1 Private Business Use
    One of several tests of private activity or benefit.
  • de minimis private business use exceptions
    • 4.6.1.1 De Minimis Private Business Use Exceptions
  • managements, operating and service contracts
    • 4.6.1.3 Management, Operating, and Service Contracts
  • measurement of private business use,
    • 4.6.1.2 Measurement of Private Business Use
  • output facilites
    • 4.6.1.4 Output Facilities
• private loan test
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
• private placement
  • PRIVATE PLACEMENT
  • PRIVATE PLACEMENT MEMORANDUM
  • Figure-3-2 Private Placement (Direct Lease/Loan)
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
  • 5.5.1 Documentation Used in Private Placement Transactions
    
• private security test
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.6.1.1 De Minimis Private Business Use Exceptions
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
• private use
  • PRIVATE USE
  • i.4.5.2 Requirement #2 – The debt must finance a qualifying project and satisfy ongoing requirements and limitations regarding the use of the project
  • 4.6.1.3 Management, Operating, and Service Contracts
  • 4.6.1.4 Output Facilities
  • 8.3.3 Monitoring Use of Bond-Financed Property(See “private business use”)
• prohibition of gift of public fund
  • 7.3 Prohibition of Gift of Public Funds
    Prohibitions imposed on a public agency from making any gift of public funds or from lending its public credit to any person.
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt (See “California Constitution prohibition of gift of public funds”)
• project fund
  • 2.4.3 Funds and Accounts; Flow of Funds
    How funds will flow from borrower to lender.
  • 9.2.1 Project Fund
    Types of bond funds that may be invested by the issuer.
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
• property related fees and charges
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.1 Determining the Category of Revenues
    Differentiating “taxes,” “assessments” and “fees and charges.”
  • 1.4.2 What Is a Tax?
    Series of questions used to determine “what is a tax.”
  • 1.4.9 Property-Related Fees and Charges
    Sources of Revenues securing debt obligations: Property related fees and charges defined
  • 1.7.5 voter-approved limitations Proposition 218 (1996), Right to Vote on Taxes Act
  • 1.7 Historical Overview of Voter-Approved Limitations on Local Government Revenues
    Summary of state level initiatives directed at the fiscal affairs of California state and local government.
  • voter-approved limitations
    • 1.7 Historical Overview of Voter-Approved Limitations on Local Government Revenues
      Summary of state-level initiatives directed at the fiscal affairs of California state and local government.
• propositions (“Prop”)
  • 1.6.1 Initiative Power and its Impact on Debt
  • Prop 4
    • 1.7.2 Proposition 4 (1979), Gann Limit Initiative
  • Prop 13
    • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
    • B.1.1.2 Proposition 13
  • Prop 26
    • 1.7.7 Proposition 26 (2010) Supermajority Vote to Pass New
  • Prop 39
    • 1.4.4 Ad Valorem Real Property Taxes Securing Voter-Approved Obligations
      The use of Ad Valorem property taxes to secure debt obligations.
    • 1.7.6 Proposition 39 (2000), School Facilities Local Vote Act of 2000
    • B.1.1 Overview of School Facility Financing
    • B.1.3 School District Financing Options
    • B.1.4.3 Parcel Taxes
  • Prop 46
    • 1.4.3 Ad Valorem Real Property Taxes
      Sources of Revenues securing debt obligations: Ad Valorem tax defined
    • 1.4.4 Ad Valorem Real Property Taxes Securing Voter-Approved Obligations
      The use of Ad Valorem property taxes to secure debt obligations.
    • 1.7.3 Proposition 46 (1986)
    • B.1.1 Overview of School Facility Financing
    • B.1.3 School District Financing Options
  • Prop 62
    • 1.7.4 Proposition 62 (1986), Voter Approval of Taxes Act
  • Prop 218
    • 1.7.5 Proposition 218 (1996), Right to Vote on Taxes Act
    • 3.3.7.1 Assessment Bonds
      Local governments issue assessment bonds to pay for public infrastructure that confers a special benefit upon real property and are payable from assessments imposed on the real property.
• public agencies
  • LOCAL PUBLIC AGENCY
  • ORGANIC ACT
  • Introduction
  • i.1 Understand Your Public Agency
  • i.1.1 Who Are You and What Do You Want To Be?
  • i.1.2 What Is Mission Failure for Your Agency?
  • i.1.3 What Is the Agency’s Tolerance for Risk?
  • i.1.4 Do Projects Conform to the Agency’s Mission and Risk Tolerance?
  • 1 Legally Incurring Debt – State Law Restrictions on Public Agency Debt and Revenues
  • 1.1 A Public Agency’s Authority to Borrow
    This chapter provides an overview of the statutory and legal framework within which California local public agencies may incur debt and obtain the funds needed to repay it.
  • 1.1.1 Statutory Authority to Borrow (See “issuer types” and “organic statutes”)
    All public agencies are subject to the California Constitution and the powers granted to them or that are essential to their purpose.
    
• public offering
  • PUBLIC OFFERING
  • COMPETITIVE SALE
  • NEGOTIATED SALE
  • OFFICIAL STATEMENT/PRELIMINARY OFFICIAL STATEMENT
  • Figure 3-1 Public Offering
  • 5 Sale of Municipal Debt
    Considerations made in the sale of a municipal security.
  • 5.1 What is a public offering?
    Characteristics defining a public sale of debt.
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 5.3 Negotiated Public Offerings
    The sale of debt using a negotiated approach to pricing.
  • 5.7.2 Targeting Investors
  • 6 Securities Laws Pertaining to Municipal Debt
    Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
• put or tender feature
  • DEMAND BOND (PUT BOND OR TENDER OPTION BOND)
  • TENDER OPTION
  • TENDER OPTION BOND
  • PUT BOND
  • 2.3.2 Credit Enhancement and Liquidity Support
    Use of credit enhancements and liquidity guarantees to lower risk and attract investors.
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short term interest rates by offering a “tender” or “put” feature.

Q

• qualified private activity bonds
  • qualified private activity bonds
  • 4 Federal and State Tax Law Requirements
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 4.6 Governmental Bonds/Private Activity Bonds
    The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
  • 4.7 Qualified Private Activity Bonds
    Bonds that meet the Private Activity Bonds Tests will not be treated as governmental bonds, and instead will be private activity bonds. The interest on private activity bonds will not be tax exempt unless the bonds meet the requirements to be issued as qualified private activity bonds.
  • 4.7.1.3 Single-Family Mortgage Revenue Bonds
    A category of private activity bond
  • 4.7.2 Additional Requirements Applicable to Qualified Private Activity Bonds
  • 4.7.2.1 Volume Cap
    Requirements of private activity bonds
  • 4.7.2.3 Useful Life Limitations
    Requirements of private activity bonds
  • 4.7.2.4 Land and Used Property Limits
    Requirements of private activity bonds
  • 4.7.2.6 Certain Prohibited Facilities
    Requirements of private activity bonds
  • 4.9.1.1 Small Issuer Exception
    Exception to arbitrage rebate requirements in Tax Code.
  • 4.10.3 Information Reporting Requirements
  • 4.10.4 Limitations on Pooled Financing Loans
  • 5.4 Costs of Issuance
    The costs of issuance (COI) are the expenses paid by or on behalf of the issuer in connection with the sale and issuance of publicly offered bonds.
  • certain prohibited facilities
    • 4.7.2.6 Certain Prohibited Facilities
      Requirements of private activity bonds
  • conduit revenue bonds
    • 3.3.9 Conduit Revenue Bonds
      “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
  • cost of issuance limits
    • 4.7.2.5 Cost of Issuance Limit
      Requirements of private activity bonds
  • land and used property limits
    • 4.7.2.4 Land and Used Property Limits
      Requirements of private activity bonds
  • substantial user restriction
    • 4.7.2.7 Substantial User Restriction
      Requirements of private activity bonds
  • useful life limitations
    • 4.7.2.3 Useful Life Limitations
      Requirements of private activity bonds
• qualified private activity bond catagories
  • 4.7.1 Categories of Qualified Private Activity Bonds
  • 4.7.2 Additional Requirements Applicable to Qualified Private Activity Bonds
  • educational facilities
    • 3.3.9 Conduit Revenue Bonds
      “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
    • 3.3.9.4 Education
      A type of conduit financing used to finance educational facilities operated by non profit organizations.
    • 4.7.1.1 Exempt Facility Bonds
      A category of private activity bond
    • 4.7.2.1 Volume Cap
      Requirements of private activity bonds
  • exempt facility bonds
    • 3.3.9.1 Exempt Facilities
      A type of conduit financing used to finance transportation or utility facilities or multi family housing.
    • 4.7.1.1 Exempt Facility Bonds
      A category of private activity bond
  • health care facilities
    • 3.3.9.3 Health Care
      A type of conduit financing used to finance facilities for private hospitals and other health care facilities under certain conditions.
  • multifamily housing bonds
    • 3.3.9.1 Exempt Facilities
      A type of conduit financing used to finance transportation or utility facilities or multi family housing.
    • 3.3.9.5 Multifamily Housing
      Conduit financing to finance multifamily housing under certain conditions.
    • 4.7.1.2 Multifamily Housing Bonds
      A category of private activity bond
  • qualified 501(c)(3) bonds
    • qualified 501(c)(3) bonds
    • 3.3.9.3 Health Care
      A type of conduit financing used to finance facilities for private hospitals and other health care facilities under certain conditions.
    • 3.3.9.4 Education
      A type of conduit financing used to finance educational facilities operated by non profit organizations.
    • 3.3.9.5 Multifamily Housing
      Conduit financing to finance multifamily housing under certain conditions.
    • 4.6 Governmental Bonds/Private Activity Bonds
      The opportunity to use government bonds to finance capital improvements that may generate private activity or benefit.
    • 4.7.1 Categories of Qualified Private Activity Bonds
    • 4.7.1.7 Qualified 501(c)(3) Bonds
      A category of private activity bond
    • 4.7.2.4 Land and Used Property Limits
      Requirements of private activity bonds
  • qualified redevelopment bonds
    • 4.7.1 Categories of Qualified Private Activity Bonds
    • 4.7.1.6 Qualified Redevelopment Bonds
      A category of private activity bond
  • qualified small-issue bonds
    • 3.3.9.2 Small Manufacturing Facilities
      “A type of conduit financing used to finance finance manufacturing facilities and directly related and ancillary facilities.”
    • 4.7.1 Categories of Qualified Private Activity Bonds
    • 4.7.1.5 Qualified Small-Issue Bonds
      A category of private activity bond
  • single-family mortgage revenue bonds
    • i.4.6 What Financing Options are Available
    • 3.3.8 Single-Family Mortgage Revenue Bonds
      Public agencies issue single family mortgage revenue bonds to assist homeownership.
    • 3.5 Tax Treatment of Municipal Bonds
      A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax purposes.
    • 4.7.1 Categories of Qualified Private Activity Bonds
    • 4.7.1.3 Single-Family Mortgage Revenue Bonds
      A category of private activity bond
  • student loan bonds
    • 4.7.1 Categories of Qualified Private Activity Bonds
    • 4.7.1.4 Student Loan Bonds
      A category of private activity bond

R

• rebate requirement, (See “arbitrage rebate”)
• recordkeeping and retention (See “bond funds management”)
• redemption
  • Redemption
  • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • 2.3.1 Redemption or Prepayment
    Use of a redemption or prepayment of principal to address risk or investor interest
  • 4.12 Refunding Bonds
    How the Tax Code differentiates advance and current refundings.
  • 5.4.2 Underwriting Fees and Expenses
  • B.1.3.1.1 Process for Approval of Local School District GO Bonds
  • B.1.3.1.2 GO Bond Structures
  • extraordinary redemption
    • 2.3.1.2 Extraordinary Redemption
      Extraordinary redemption of principal
  • mandatory redemption
    • 2.3.1.1 Mandatory Redemption
      Mandatory redemption of principal
    • 2.4.8.1 Events of Default
      Different types of defaults
  • optional redemption
    • 2.3.1.3 Optional Redemption
      Optional redemption of principal
    • 3.7.6 Refunding Bonds
      Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
    • B.1.5.3 Refunding Bonds
  • redemption premium
    • Redemption Premium
    • 2.3.1.3 Optional Redemption
      Optional redemption of principal
    • 3.3.7.1 Assessment Bonds
      Local governments issue assessment bonds to pay for public infrastructure that confers a special benefit upon real property and are payable from assessments imposed on the real property.
    • 3.7.6 Refunding Bonds
      Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
• redevelopment agency
  • 3.3.7.3 Redevelopment Agencies
    Redevelopment agencies were dissolved in 2012. The remaining successor agencies are charged with winding down the administration of the redevelopment agencies, which in some cases includes issuance of refunding bonds.
  • 3.3.7.4 Enhanced Infrastructure Financing Districts
    Enhanced infrastructure financing districts (EIFDs) build upon the existing infrastructure finance district law to finance public works.
  • Figure 7-1 Reports that Debt Issuers Must Submit to CDIAC
  • C.1.1 State and Local Organizations
• redevelopment bonds
  • 3.3.7.3 Redevelopment Agencies
    Redevelopment agencies were dissolved in 2012. The remaining successor agencies are charged with winding down the administration of the redevelopment agencies, which in some cases includes issuance of refunding bonds.
  • 4.7.1.6 Qualified Redevelopment Bonds
    A category of private activity bond
• referendum power
  • Referendum Power
  • 1.6 The Initiative and Referendum Powers
    The ability of the voters to effect changes to the State Constitution through Initiative or Referendum.
  • 1.6.2 Referendum Power and its Impact on Debt
  • A.1 California Consitution Provisions Relating to Local Public Agency Debt
  • impact on debt
    • 1.6.2 Referendum Power and its Impact on Debt
• refunding bonds
  • Refunding
  • i.4.1.2 Issuance Phase
  • i.4.5.4 Requirement #4 – Adhere to procedural and other rules
  • i.4.6 What Financing Options are Available
  • i.5.1.1 Debt Management Policies
  • 1.1.2 General Bond Statutes
    Statutory authorities broadly applicable to public agencies.
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • 3.3.6.1 Public Enterprise Revenue Bonds
  • 3.3.7.3 Redevelopment Agencies
    Redevelopment agencies were dissolved in 2012. The remaining successor agencies are charged with winding down the administration of the redevelopment agencies, which in some cases includes issuance of refunding bonds.
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 4.4.1 Issue Sizing and Term
    Limits on issue size and term pursuant to the Tax Code.
  • 4.8.2.1 Categories of Proceeds
  • 4.9.1.3 18-Month Expenditure Exception
    Exception to arbitrage rebate requirements in Tax Code.
  • 4.9.1.4 2-Year Expenditure Exception
    Exception to arbitrage rebate requirements in Tax Code.
  • 4.12 Refunding Bonds
    How the Tax Code differentiates advance and current refundings.
  • 5.4.1 Direct Costs of Issuance
  • 5.4.2 Underwriting Fees and Expenses
  • Figure 7-1 Reports that Debt Issuers Must Submit to CDIAC
  • 7.1.2 Report of Final Sale
  • 8.3.6 Recordkeeping and Retention
  • 8.5.4 Managing Disclosure Risk
    Approaches to managing the risk improper disclosure.
  • 9.1 A Team Approach to Investing Bond Funds
    Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is an important component of minimizing overall, or “net,” borrowing costs.
  • A.6 General Bond Statutes
  • B.1.3.1.1 Process for Approval of Local School District GO Bonds
  • B.1.5.3 Refunding Bonds
  • advance refunding
    • Advance Refunding
    • i.4.5.4 Requirement #4 – Adhere to procedural and other rules
    • 3.7.6 Refunding Bonds
      Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
    • 4.12 Refunding Bonds
      How the Tax Code differentiates advance and current refundings.
    • B.1.5.3 Refunding Bonds
  • current refunding
    • Current Refunding
    • i.4.5.4 Requirement #4 – Adhere to procedural and other rules
    • 3.7.6 Refunding Bonds
      Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
    • 4.7.2.2 TEFRA Public Requirements
      Requirements of private activity bonds
    • 4.9.1.2 6-month Expenditure Exception
      Exception to arbitrage rebate requirements in Tax Code.
    • 4.12 Refunding Bonds
      How the Tax Code differentiates advance and current refundings.
    • B.1.5.3 Refunding Bonds
• refunding escrows
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 9.2.5 Refunding Escrow Funds
    Types of bond funds that may be invested by the issuer.
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
• Registered Public Obligations Act
  • 1.1.2 General Bond Statutes
    Statutory authorities broadly applicable to public agencies.
• reimbursement of prior expenditures
  • 4.4.5 Reimbursement of Prior Expenditures
    Reimbursement of Prior Expenditures pursuant to the Tax Code.
• remarketing and purchase
  • Remarket
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.
• remarketing agent
  • Remarketing Agent
  • i.4.1.3 Post-Issuance Phase
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”
  • 2.4.9 Fiduciary Rights and Duties
    The fiduciary provisions in bond documents set forth the qualification requirements for fiduciaries and the terms of their appointment.
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.
• renewal risk
  • 2.2.2.3 Variable-Rate Debt
• Request for Qualifications (RFQ)
  • Request for Proposal (RFP)
  • 5.3 Negotiated Public Offerings
    The sale of debt using a negotiated approach to pricing.
• resolution
  • Bond Resolution
  • Inducement Resolution
  • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 4.4.5 Reimbursement of Prior Expenditures
    Reimbursement of Prior Expenditures pursuant to the Tax Code.
  • A.6 General Bond Statutes
  • authorizing/bond
    • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
  • inducement/reimbursement
    • 2.3 Structural Factors Addressing Risk and Investor Interests
      Ways the structure of a debt obligation may address risk and investor interests.
    • 4.4.5 Reimbursement of Prior Expenditures
      Reimbursement of Prior Expenditures pursuant to the Tax Code.
• revenue bonds
  • Revenues/Gross Revenues/Net Revenues
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 1.3.3 Revenue Bonds
    Debt obligation structured to comply with the Special Fund exception to the Constitutional debt limit.
  • 3.1.4 Unique Public Agency Financings that Address Legal Constraints or Public Policy Issues
    California public finance professionals have structured some types of debt to address special legal constraints.
  • 3.3.6.1 Public Enterprise Revenue Bonds
  • 3.3.6.2 Public Enterprise Revenue Installment Sale Agreements
  • 3.6.4 Joint Powers Agency or Authority (JPA) Bonds and Other Issuances
    Due to the extensive bond issuance authority afforded JPAs under government code, JPAs are a common vehicle for issuing bonds that are backed by either a lease or installment sale agreement.
  • Figure 3-6 Marks-Roos Large Scale Pool
  • Figure 3-7 Marks-Roos Captive Pool
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • Figure 7-1 Reports that Debt Issuers Must Submit to CDIAC
  • 7.1.2 Report of Final Sale
  • Appendix A. Legal References
    Index and links to existing laws concerning the financial operations of California public agencies.
  • A.4 Joint Powers Agencies/Authorities
  • A.5 Financing Tools Contained in Statute
  • Appendix C. Additional Sources of Information
    Resources and reference documents relevant to issuance and administration of debt obligations.
  • conduit revenue bonds
    • Conduit Financing
    • Conduit Issuer
    • i.5.2.3 Conduit Issuer Reporting
    • 3.3.9 Conduit Revenue Bonds
      “Conduit financings” involve bonds issued by governmental entities to finance projects for nongovernmental borrowers.
    • Appendix A. Legal References
      Index and links to existing laws concerning the financial operations of California public agencies.
  • lease revenue
    • 1.3.1 Lease Revenue Bonds and Certificates of Participation
      Debt obligation structured to comply with the Lease exception to the Constitutional debt limit.
    • 3.1.4 Unique Public Agency Financings that Address Legal Constraints or Public Policy Issues
      California public finance professionals have structured some types of debt to address special legal constraints.
    • 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
    • 3.9.2 State Public Works Board Lease Revenue Bonds
      The California State Public Works Board issues lease revenue bonds to finance capital improvement for state agencies.
    • Appendix A. Legal References
      Index and links to existing laws concerning the financial operations of California public agencies.
  • public enterprise
    • Figure 1-1 Public Agency Revenue Sources by Category
    • 3.3.6.1 Public Enterprise Revenue Bonds
    • Figure 7-1 Reports that Debt Issuers Must Submit to CDIAC
    • additional bonds test(ABT)
      • additional bonds test
      • 3.3.6.1 Public Enterprise Revenue Bonds
  • sales tax
    • 3.3 Types of Debt Obligations Organized by Security and Source of Payment
    • 3.3.3 Sales Tax Revenue Bonds
      Debt obligations that are payable from and secured by revenues from the imposition of a sales and use tax, or a transaction and use tax, on retail transactions
    • Appendix A. Legal References
      Index and links to existing laws concerning the financial operations of California public agencies.
  • single-family mortgage
    • 3.3.8 Single-Family Mortgage Revenue Bonds
      Public agencies issue single-family mortgage revenue bonds to assist homeownership.
    • 4.7.1.3 Single-Family Mortgage Revenue Bonds
      A category of private activity bond
• risks associated with debt
  • 2.2.2.3 Variable-Rate Debt
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate obligation
• risk premium
  • 5.2.2 Disadvantages of a Competitive Sale
  • 5.3.1 Advantages of a Negotiated Public Offering
  • 5.4.2 Underwriting Fees and Expenses

S

• safe harbor
  • 4.6.1.3 Management, Operating, and Service Contracts
  • 4.8.3.1 Fair Market Value Rules
  • 9.4.2 Investments Specific to Bond Funds
  • 9.5.1 Arbitrage Rebate and Yield Restriction
• sales tax revenue bonds (See “revenue bonds”)
• school districts
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • i.5.2.1 Proposition 39 General Obligation Bonds
  • 1.1.1 Statutory Authority to Borrow
    All public agencies are subject to the California Constitution and the powers granted to them or that are essential to their purpose.
  • 1.2.1 Debt Limit
    Voter approval requirements imposed by the State Constitution to restrict the ability of certain public agencies to incur unfunded, long term obligations
  • 1.2.3 Scope of Debt Limit – When Does the Debt Limit Apply?
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.3 Ad Valorem Real Property Taxes
    Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • 1.4.4.2 Proposition 46 General Obligation Bonds
    Ad Valorem property taxes securing voter approved Proposition 46 GO bonds.
  • 1.7.3 Proposition 46 (1986)
  • 1.7.6 Proposition 39 (2000), School Facilities Local Vote Act of 2000
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    “Changing the substantive financial terms of a debt from a fixed rate obligation to a variable rate obligation”
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • 3.3.2.1 Lease Revenue Bonds and Certificates of Participation
  • 3.3.4 TRANs and RANs
    Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
  • Figure 3-6 Marks-Roos Large Scale Pool
  • Figure 7-1 Reports that Debt Issuers Must Sumbit to CDIAC
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt
  • A.2 Authority for Cities, Counties and K-14 School Districts to Issue Debt
  • A.5 Financing Tools Contained in Statute
  • B.1 School Facility Finance
  • B.1.1 Overview of School Facility Financing
  • B.1.1.2 Proposition 13
  • B.1.2 State-Level Facility Funding
  • B.1.3 School District Financing Options
  • B.1.3.1 Local General Obligation Bonds
  • Figure B-1 Statutory Debt Limits
  • B.1.3.1.1 Process for Approval of Local School District GO Bonds
  • B.1.3.1.2 GO Bond Structures
  • B.1.3.1.3 Policy Considerations for Issuing GO Bonds
  • B.1.3.2 School Facilities Improvement Districts
  • B.1.3.3 Certificates of Participation/Leases
  • B.1.4.1 Community Facilities Districts/Mello-Roos Bonds
  • B.1.4.2 Developer Fees
  • B.1.5 Additional Financing Tools for School Districts
  • B.1.5.1 Tax and Revenue Anticipation Notes
  • B.1.5.2 Bond Anticipation Notes
  • B.1.5.3 Refunding Bonds
  • B.1.6.1 Charter School Facilities
• Securities and Exchange Commission (SEC)
  • Securities and Exchange Commission (SEC)
  • Introduction
  • i.3.2 Legal Responsibilities of Issuers of Municipal Securities
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • i.3.2.3 Responsibilities of Elected and Appointed Officials
  • i.4.1 Financing Team
  • i.4.1.1 Pre-Issuance Phase
  • i.4.1.3 Post-Issuance Phase
  • 5.6.1 What Credit Ratings Mean
  • 5.6.2 The Credit Rating Process
  • 6 Securities Laws Pertaining to Municipal Debt
    Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
  • 6.1.1 Antifraud Rules
    Statements by municipal issuers to investors, or potential investors, and even statements to the public generally, if likely to be heard and relied upon by the securities market are subject to the anitfraud provisions of federal securities laws.
  • 6.1.2 Governing Board Responsibilities
    Role of governing board in complying with federal securities laws.
  • 6.1.4 SEC Enforcement Actions
    Review of important enforcement actions against public agencies.
  • 6.1.4.1 Recent SEC Enforcement Focus
  • 6.1.4.2 Lessons from SEC Cases
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.3.4 Transactions with Credit or Liquidity Support
    The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
  • 8.4.1 Annual Reports
    Annual financial reports submitted as a part of continuing disclosures made by issuers.
  • 8.4.4 Incentives for Compliance
    Failure to comply with the requires of SEC Rule 15c2-12 must reported in any subsequent public offering.
  • 9.4.1 Permitted Investments
    Types of investment vehicles that may be used to invest bond funds.
  • C.2 Regulatory Resources
  • Office of Credit Ratings
    • 5.6.1 What Credit Ratings Mean
    • C.3.1 Regulatory Oversight
  • Securities Acts
    • i.3.2 Legal Responsibilities of Issuers of Municipal Securities
    • i.3.2.3 Responsibilities of Elected and Appointed Officials
    • 5.5 Private Placements
      Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
    • 6 Securities Laws Pertaining to Municipal Debt
      Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
    • 6.1 Federal Securities Laws
      While municipal securities are exempt from the registration requirements of federal securities law, they are subject to other rules.
    • 6.1.1 Antifraud Rules
      Statements by municipal issuers to investors, or potential investors, and even statements to the public generally, if likely to be heard and relied upon by the securities market are subject to the anitfraud provisions of federal securities laws.
• SEC Rule 10b-5
  • SEC Rule 10B-5
  • i.3.2 Legal Responsibilities of Issuers of Municipal Securities
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
  • 6.1.1 Antifraud Rules
    Statements by municipal issuers to investors, or potential investors, and even statements to the public generally, if likely to be heard and relied upon by the securities market are subject to the anitfraud provisions of federal securities laws.
  • 6.1.3 Secondary Market Disclosure
    Federal securities laws as they apply to communications with secondary market participants.
  • 6.1.4.2 Lessons from SEC Cases
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.2.2 Attorneys
  • 8.4.1 Annual Reports
    Annual financial reports submitted as a part of continuing disclosures made by issuers.
    
• SEC Rule 15c2-12
  • SEC Rule 15c2-11
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • i.4.1.3 Post-Issuance Phase
  • i.5.1.2 Disclosure Policies
  • i.5.1.3 Investor Relations Policies
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
  • 6.1.3 Secondary Market Disclosure
    Federal securities laws as they apply to communications with secondary market participants.
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement
  • 8.2.3 Recordkeeping and Reporting
    Recordkeeping essential to maintaining tax exempt status of bonds.
  • 8.4 Continuing Disclosure
    Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • 8.4.1 Annual Reports
    Annual financial reports submitted as a part of continuing disclosures made by issuers.
  • 8.4.2 Event Notices
    Event notices required by SEC Rule 15c2-12.
  • 8.4.3 Exceptions to Rule 15c2-12 Continuing Disclosure Requirements
  • 8.4.4 Incentives for Compliance
    Failure to comply with the requires of SEC Rule 15c2-12 must reported in any subsequent public offering.
  • 8.5.4 Managing Disclosure Risk
    Approaches to managing the risk improper disclosure.
• Secured Overnight Financing Rate (SOFR)
  • Secured Overnight Financing Rate (SOFR)
  • 3.4.2.1 Index Debt
    The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.
• security pledge for repayment of debt
  • security and source of payment
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 1.6.1 Initiative Power and its Impact on Debt
  • 2.2.1 Sources of Revenue and Security for Repayment
  • 3.3.6 Enterprise Fund Debt Obligations
    Debt obligations payable from and secured by revenues received from a local government “proprietary” enterprise.
  • 3.3.6.1 Public Enterprise Revenue Bonds
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello Roos bonds are payable from special taxes imposed on real property.
  • 3.3.8 Single-Family Mortgage Revenue Bonds
    Public agencies issue single family mortgage revenue bonds to assist home ownership.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.8.2.1 Categories of Proceeds
  • 5.7.2 Targeting Investors
  • 8.1.1 Bond Documents
    Bond documents that contain provisions that control the administration of bond funds.
  • 9.3.1 Statutory Authority
    Controlling statutory authority for investment of bond funds.
  • A Legal References
    Index and links to existing laws concerning the financial operations of California public agencies.
  • B.1.3.1.3 Policy Considerations for Issuing GO Bonds
  • D.1.2 Process
  • First General Operating Principle of Public Debt
    • 2.2.1 Sources of Revenue and Security for Repayment
  • Second General Operating Principle of Public Debt
    • 2.2.2 Term and Interest Rate Mode
      Structural features: terms and interest rate mode.
• serial bonds
  • serial bonds
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
  • 2.2.2.3 Variable-Rate Debt
  • 3.4.1 Long-Term, Fixed-Rate Debt
• short term debt
  • short-term debt
  • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
  • 2.2.2 Term and Interest Rate Mode
    Structural features: terms and interest rate mode.
  • 2.2.2.2 Short-Term Debt
  • 2.2.2.3 Variable-Rate Debt
  • 5.6.1 What Credit Ratings Mean
  • B.1.5.1 Tax and Revenue Anticipation Notes
• SIFMA Municipal Swap Index
  • Securities Industry and Financial Markets Association (SIFMA)
  • 3.4.2.1 Index Debt
    The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.
• single family mortgage revenue bonds (See “revenue bonds”)
• small issue industrial development bonds (See “conduit revenue bonds”)
• sovereign powers
  • i.4.5.1 Requirement #1 – The debt must be issued by a qualified issuer
  • 4.2.2 Political Subdivision – Sovereign Powers Requirement
    Political subdivision defined for purposes of the Tax Code.
• special districts
  • special district
  • i.1.1 Who Are You and What Do You Want To Be?
  • 1.2.3 Scope of Debt Limit – When Does the Debt Limit Apply?
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 1.4.3 Ad Valorem Real Property Taxes
    Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • 1.4.6 Special Taxes
    Sources of Revenues securing debt obligations: Special taxes defined
  • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • 3.3.6.1 Public Enterprise Revenue Bonds
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello Roos bonds are payable from special taxes imposed on real property.
  • 7.1 Reporting to the California Debt and Investment Advisory Commission
    Compliance with California Government Code 8855 et. seq.
  • 9.4.1 Permitted Investments
    Types of investment vehicles that may be used to invest bond funds.
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt
  • A.3 Organic Statutes of Specific Entities Authorized to Issue Debt
  • A.5 Financing Tools Contained in Statute
  • B.1.1.2 Proposition 13
  • B.1.3.1 Local General Obligation Bonds
  • C.4.2 Joint Powers Authorities/Agencies (JPAs)
• special fund exception
  • special fund
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • 1.2.4.4 Special Fund Exception
    An exception to the constitutional debt limit if debt service is payable solely from a special fund
  • 1.3.3 Revenue Bonds
    Debt obligation structured to comply with the Special Fund exception to the Constitutional debt limit.
  • 3.3.6 Enterprise Fund Debt Obligations
    Debt obligations payable from and secured by revenues received from a local government “proprietary” enterprise.
  • 3.6.1 Financing Leases
    The public agency obtains financing by entering into a lease for which it makes rental payments
  • 3.9.4 Financings for State Enterprises
    bonds and notes issued by State enterprises such as the California Housing Finance Authority and payable from enterprise revenues.
• special taxes
  • special tax
  • i.4.2.1 Decision #1 – Choose the funding source
  • i.4.6 What Financing Options are Available
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 1.4.6 Special Taxes
    Sources of Revenues securing debt obligations: Special taxes defined
  • 1.4.7 Assessments
    Sources of Revenues securing debt obligations: Assessments defined
  • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
  • 1.7.5 Proposition 218 (1996), Right to Vote on Taxes Act
  • 3.3.3 Sales Tax Revenue Bonds
    Debt obligations that are payable from and secured by revenues from the imposition of a sales and use tax, or a transaction and use tax, on retail transactions
  • 3.3.7 Special Assessments, Special Taxes, and Tax Increments
    Debt obligations secured by assessments, special taxes, or tax increment.
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello Roos bonds are payable from special taxes imposed on real property.
  • 3.7.4 Other Tax and Fee-Secured Debt
    Public agency bonds and other debt obligations may also be secured by taxes and fees levied by the public agency.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
  • 6.3.2 Contents of the Official Statement
  • 7.1.4 Mello-Roos Community Facilities District Reports
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt
  • A.5 Financing Tools Contained in Statute
  • B.1.1.1 School Facility Finance Before Proposition 13
  • B.1.1.2 Proposition 13
  • B.1.3 School District Financing Options
  • B.1.3.2 School Facilities Improvement Districts
  • B.1.4.3 Parcel Taxes
  • B.1.6.2 Nonprofit and Religious School Facilities
• surety
  • surety/reserve funds surety
  • 2.3.2.2 Debt Service Reserve Fund Surety Bonds
    Credit enhancement: Debt service reserve fund
  • 2.4.4 Debt Service Reserve Fund
    The use of a debt service fund to repay principal and interest on a debt obligation.
  • 2.4.11.2 Amendments Requiring Debt Holder Consent
  • 5.2.3 Documentation for a Competitive Sale
• standby bond purchase agreement
  • 2.3.2.4 Lines of Credit and Standby Bond Purchase Agreements
    Liquidity Support: Lines of Credit
  • 3.4.3 Commercial Paper
    “A debt obligation that involves the issuance and marketing of short term notes. “
• State and Local Government Series (SLGS)
  • State and Local Government Series (SLGS)
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 4.8.3.1 Fair Market Value Rules
  • 9.4.2 Investments Specific to Bond Funds
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
• State of California Financing
  • 3.9 State Financings
    The various financing vehicles used by the State of California.
  • A.3 Organic Statutes of Specific Entities Authorized to Issue Debt
• statewide concerns
  • 1.1.3 Borrowing Authority of Charter Cities
    Authority to borrow provided to charter cities by their charter.
  • 1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns
    Basis of authority provided to charter cities ( See “charter city powers”)
• strategic planning
  • i.1.4.1 Strategic Planning
• swap
  • i.4.1.3 Post-Issuance Phase
  • 1.2.4.5 Contingent Obligation Exception
    Debt limit exception depends upon the fact that the public agency’s obligation to make payments from the income and revenue of a future fiscal year is contingent.
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    “Changing the substantive financial terms of a debt from a fixed rate obligation to a variable rate obligation”
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 4.8.3 Yield
    The yield on a bond issue defined.
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • A.6 General Bond Statutes
• synthetic structure (See “swap”)

T

• tax and fee secured debt
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.6 Special Taxes
    Sources of Revenues securing debt obligations: Special taxes defined
  • 1.4.8 Fees and Charges
    Sources of Revenues securing debt obligations: Fees and charges defined
  • 1.4.9 Property-Related Fees and Charges
    Sources of Revenues securing debt obligations: Property related fees and charges defined
  • 3.7.4 Other Tax and Fee-Secured Debt
    Public agency bonds and other debt obligations may also be secured by taxes and fees levied by the public agency.
• tax and revenue anticipation notes (TRANs)
  • tax and revenue anticipation notes (TRANs)
  • i.4.5 Issuing Tax-Exempt Debt
  • 1.2.4.1 Current Fiscal Year Exception
    Debt limit exception based on the fact that the public agency can pay the debt with funds it already has or will receive during the current fiscal year.
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.
  • 1.4.3 Ad Valorem Real Property Taxes
    Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • 1.4.5 General Taxes
    Sources of Revenues securing debt obligations: General taxes defined
  • 2.2.2.2 Short-Term Debt
  • 3.3.4 TRANs and RANs
    Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
  • 3.7.7 Pool Bonds
    Pool bonds are bonds issued to purchase the underlying bonds issued by pool members. TRANS are an example of a pool bond.
  • 4.5 Cash Flow Borrowings
    Public agencies may find themselves temporarily short of cash to finance operations and may need to address the shortfall with a short-term financing called a “cash flow borrowing.”
  • 4.9.1.2 6-month Expenditure Exception
    Exception to arbitrage rebate requirements in Tax Code.
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • A Legal References
    Index and links to existing laws concerning the financial operations of California public agencies.
  • B.1.5.1 Tax and Revenue Anticipation Notes
• tax certificate
  • tax certificate
  • i.4.1.2 Issuance Phase
  • 4.11 Bank Qualified Bonds
    The ability for banks to benefit from tax exempt bonds under the Tax Code.
  • 8.3 Post-Issuance Federal Tax Law Requirements (See “legal documents”)
    Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax exempt” status.
• tax code
  • tax code
  • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
  • i.4.5 Issuing Tax-Exempt Debt
  • 4 Federal and State Tax Law Requirements (See “Internal Revenue Code of 1986”)
• taxes
  • tax
  • i.4.2.1 Decision #1 – Choose the funding source
  • 1.4 Local Government Revenue Sources -Security for and Repayment of Debt
    Sources of revenue available to local governments to repay debt obligations.Sources of revenue available to local governments to repay debt obligations.
  • Figure 1-1 Public Agency Revenue Sources by Category
  • 1.4.1 Determining the Category of Revenues
    Differentiating “taxes,” “assessments” and “fees and charges.”
  • 1.4.3 Ad Valorem Real Property Taxes
    Sources of Revenues securing debt obligations: Ad Valorem tax defined
  • 1.4.4 Ad Valorem Real Property Taxes Securing Voter-Approved Obligations
    The use of Ad Valorem property taxes to secure debt obligations.
  • 1.4.5 General Taxes
    Sources of Revenues securing debt obligations: General taxes defined
  • 1.4.6 Special Taxes
    Sources of Revenues securing debt obligations: Special taxes defined
  • 1.4.8 Fees and Charges
    Sources of Revenues securing debt obligations: Fees and charges defined
  • 1.5.2 Charter City Financing
    How the authority of a charter city may affect its debt financings
  • 1.7.1 Proposition 13 (1978), Jarvis-Gann Initiative
  • 1.7.2 Proposition 4 (1979), Gann Limit Initiative
  • 1.7.4 Proposition 62 (1986), Voter Approval of Taxes Act
  • 1.7.5 Proposition 218 (1996), Right to Vote on Taxes Act
  • 1.7.7 Proposition 26 (2010) Supermajority Vote to Pass New
  • 3.3.1 Local Agency General Obligation Bonds
    General obligation bonds (GO bonds) issued by California local government entities are payable from unlimited ad valorem taxes on real property
  • 3.3.2 General Fund Obligations
    Debt obligations backed by a public agency’s general fund.
  • 3.3.3 Sales Tax Revenue Bonds
    Debt obligations that are payable from and secured by revenues from the imposition of a sales and use tax, or a transaction and use tax, on retail transactions
  • 3.3.7 Special Assessments, Special Taxes, and Tax Increments
    Debt obligations secured by assessments, special taxes, or tax increment.
  • 3.3.7.2 Mello-Roos Bonds (Community Facilities Districts)
    Mello Roos bonds are payable from special taxes imposed on real property.
  • 3.7.4 Other Tax and Fee-Secured Debt
    Public agency bonds and other debt obligations may also be secured by taxes and fees levied by the public agency.
  • 4.1 California Tax Exemption
    State statutes providing for the issuance of bonds generally provide for the exemption of interest on the bonds from State of California personal income taxes, regardless of the federal income tax status of the bonds.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.6.3 Private Loan Test
    One of several tests of private activity Private benefit.
  • A.1 California Consitutional Provisions Relating to Local Public Agency Debt
  • A.5 Financing Tools Contained in Statute
  • A.6 General Bond Statutes
  • B.1.1.2 Proposition 13
  • B.1.3 School District Financing Options
  • B.1.3.1 Local General Obligation Bonds
  • B.1.3.1.1 Process for Approval of Local School District GO Bonds
  • B.1.3.1.2 GO Bond Structures
  • B.1.3.1.3 Policy Considerations for Issuing GO Bonds
  • B.1.4.3 Parcel Taxes
  • B.1.6.2 Nonprofit and Religious School Facilities
  • D.1.2 Process
  • what is tax?
    • 1.4.2 What Is a Tax?
      Series of questions used to determine “what is a tax.”
  • voter-approved limitations
    • 1.4.3 Ad Valorem Real Property Taxes
      Sources of Revenues securing debt obligations: Ad Valorem tax defined
    • 1.6.1 Initiative Power and its Impact on Debt
    • 1.7 Historical Overview of Voter-Approved Limitations on Local Government Revenues
      Summary of state level initiatives directed at the fiscal affairs of California state and local government.
    • B.1.4.3 Parcel Taxes
• tax exempt debt
  • i.4.1.2 Issuance Phase
  • i.4.2.4 Decision #4 – Select an interest rate type
  • i.4.2.6 Decision #6 – Decide whether the debt will be tax exempt
  • i.4.5 Issuing Tax-Exempt Debt
  • i.4.5.4 Requirement #4 – Adhere to procedural and other rules
  • 3.1.3 Tax Treatment
    Tax-exempt or taxable
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 4.13 Tax Risk
  • 8.2.2 Maintaining Tax-Exempt Status
    Recordkeeping essential to maintaining tax exempt status of bonds.
  • 8.2.6 Compliance Checklists
    Recordkeeping essential to maintaining tax exempt status of bonds.
  • 8.3 Post-Issuance Federal Tax Law Requirements
    Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax exempt” status.
  • 9.5.1 Arbitrage Rebate and Yield Restriction
• tax exempt requirements
  • i.3.2.2 Legal Responsibilities Under the IRS Tax Code
  • i.4.2.6 Decision #6 – Decide whether the debt will be tax exempt
  • i.4.5 Issuing Tax-Exempt Debt
  • 4.1 California Tax Exemption
    State statutes providing for the issuance of bonds generally provide for the exemption of interest on the bonds from State of California personal income taxes, regardless of the federal income tax status of the bonds.
  • 4.3 What is an Issue of Debt?
    For interest on a bond to be tax exempt, the bond must be debt under general federal tax law principles.
  • 4.10.1 Registration
  • 8.2.2 Maintaining Tax-Exempt Status
    Record keeping essential to maintaining tax exempt status of bonds.
  • C.2 Regulatory Resources
  • information reporting
    • 4.10.3 Information Reporting Requirements
  • limitation on pooled financing loans
    • 4.10.4 Limitations on Pooled Financing Loans
  • no federal guarantee
    • 4.10.2 No Federal Guarantee
  • overburdening requirements
    • 4.4.1 Issue Sizing and Term
      Limits on issue size and term pursuant to the Tax Code.
  • registration
    • 4.10.1 Registration
• tax law compliance (See “bonds fund management”)
• tax risk
  • 4.13 Tax Risk
  • 6.1.4.1 Recent SEC Enforcement Focus
• tax treatment
  • i.4.6 What Financing Options are Available
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • 3.1 Introduction: What Constitutes A “Type” Of Debt Obligation
    Features of a debt obligation
  • 3.1.1 Security and Source of Payment
    Source of funds repaying a debt obligation
  • 3.1.3 Tax Treatment
    Tax exempt or taxable
  • 3.4.2.1 Index Debt
    The interest rate payable on a debt obligation is adjusted periodically in accordance a published index.
  • 3.5 Tax Treatment of Municipal Bonds
    A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax purposes.
  • 4.4 Capital Expenditure Financings
    Proceeds of tax exempt bonds will only be treated as spent when used to finance or reimburse capital expenditures.
  • California tax exemption
    • i.4.2.6 Decision #6 – Decide whether the debt will be tax exempt
    • 4.1 California Tax Exemption
      State statutes providing for the issuance of bonds generally provide for the exemption of interest on the bonds from State of California personal income taxes, regardless of the federal income tax status of the bonds.
• taxable bonds
  • taxable security
  • i.4.6 What Financing Options are Available
  • 2.3.1.3 Optional Redemption
    Optional redemption of principal
  • 3.5 Tax Treatment of Municipal Bonds
    A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax purposes.
  • A.6 General Bond Statutes
• Teeter bonds
  • i.4.3 Steps Public Agencies Must Take to Use Debt Financing
  • i.4.6 What Financing Options are Available
  • 3.3.5 Teeter Bonds
    Teeter bonds are secured by a pledge of the delinquent property tax receivables and are generally also payable from the county’s general fund.
  • 3.3.7.1 Assessment Bonds
    Local governments issue assessment bonds to pay for public infrastructure that confers a special benefit upon real property and are payable from assessments imposed on the real property.
  • 7.1.4 Mello-Roos Community Facilities District Reports
• TEFRA
  • TEFRA Notice, Hearing and Approval
  • 4.7.2.2 TEFRA Public Requirements
    Requirements of private activity bonds
• tender option (See “put or tender option”)
  • tender option
  • demand bond
  • tender
  • tender offer
• term bonds
  • term bonds
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
  • 3.1.2 Payment Term and Interest Rate
    Terms of the repayment
  • 3.4.1 Long-Term, Fixed-Rate Debt
  • 5.2.3 Documentation for a Competitive Sale
• termination risk
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    “Changing the substantive financial terms of a debt from a fixed rate obligation to a variable rate obligation”
• transparency (See “accountability and transparency”)
• trustee
  • trustee
  • i.2.3 Decision #3 – Can the municipal market help the public agency meet its capital financing needs?
  • i.4.1.2 Issuance Phase
  • i.4.1.3 Post-Issuance Phase
  • 2.3 Structural Factors Addressing Risk and Investor Interests
    Ways the structure of a debt obligation may address risk and investor interests.
  • 2.3.2.3 Letters of Credit
    Liquidity Support: Letter of Credit
  • 2.4.1 Application of Proceeds
    How the proceeds of debt may be applied.
  • 2.4.4 Debt Service Reserve Fund
    The use of a debt service fund to repay principal and interest on a debt obligation.
  • 2.4.8 Events of Default and Remedies
    Actions to be taken in events of default and the remedies to be applied
  • 2.4.8.2 Remedies
    Different types of remedies in the case of a default
  • 2.4.9 Fiduciary Rights and Duties
    The fiduciary provisions in bond documents set forth the qualification requirements for fiduciaries and the terms of their appointment.
  • 3.1.6 Types of Debt Instruments
    Basic categories of debt instruments: bonds, notes, direct leases, and certificates of participation
  • 3.6.3 Certificates of Participation
    A debt obligations that involve selling the the right to receive the payments under a lease agreement to other parties.
  • 3.6.4 Joint Powers Agency or Authority (JPA) Bonds and Other Issuances
    Due to the extensive bond issuance authority afforded JPAs under government code, JPAs are a common vehicle for issuing bonds that are backed by either a lease or installment sale agreement.
  • 3.7.6 Refunding Bonds
    Refunding obligations are any municipal debt obligations used to pay principal, interest and premium on other municipal debt.
  • 4.4.2 Costs of Issuance
    Cost of issuance pursuant to the Tax Code.
  • 4.6.1.1 De Minimis Private Business Use Exceptions
  • 5.4.1 Direct Costs of Issuance
  • 7.1.5 Marks-Roos Reports
  • 8.2.4 Accounting Records
    Record keeping essential to maintaining tax exempt status of bonds.
  • 8.4 Continuing Disclosure
    Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • 8.4.2 Event Notices
    Event notices required by SEC Rule 15c2-12.
  • 9.1 A Team Approach to Investing Bond Funds
    Designing and implementing an investment strategy that maximizes earnings, while ensuring the safety and liquidity of invested funds and complying with federal tax law, is an important component of minimizing overall, or “net,” borrowing costs.
  • 9.3.1 Statutory Authority
    Controlling statutory authority for investment of bond funds.
  • 9.3.2 Bond Document Provisions
    Role of bond documents in the investment of bond funds.
  • 9.4.2 Investments Specific to Bond Funds
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.

U

• underwriter
  • underwriter
  • underwrite
  • underwriters counsel
  • i.2.3 Decision #3 – Can the municipal market help the public agency meet its capital financing needs?
  • i.3.2.1 Compliance with Municipal Securities Laws – Disclosure
  • i.4.1.1 Pre-Issuance Phase
  • i.4.1.2 Issuance Phase
  • 3.8 Joint Exercise of Powers Agencies
    A joint exercise of powers agency or authority (JPA) is a separate governmental entity formed by two or more governmental entities.
  • 4.8.3 Yield
    The yield on a bond issue defined.
  • 5.1 What is a public offering?
    Characteristics defining a public sale of debt.
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 5.2.1 Advantages of a Competitive Sale
  • 5.2.2 Disadvantages of a Competitive Sale
  • 5.2.3 Documentation for a Competitive Sale
  • 5.3 Negotiated Public Offerings
    The sale of debt using a negotiated approach to pricing.
  • 5.3.1 Advantages of a Negotiated Public Offering
  • 5.3.2 Disadvantages of a Negotiated Public Offering
  • 5.3.3 Documentation for a Negotiated Public Offering
  • 5.3.4 Pricing of a Negotiated Public Offering
  • 5.4.2 Underwriting Fees and Expenses
  • 5.5 Private Placements
    Private placements are sale transactions in which the issuer sells the entire issue of debt to a single or to a limited number of investors.
  • 5.6.2 The Credit Rating Process
  • 5.7 How Bonds Are Marketed to Investors
    In an effort to achieve the financing objectives of the issuer, including the lowest interest costs, a public agency issuer may seek to market a debt issuance to investors in a particular market
  • 5.7.1 Marketing Strategy
  • 5.7.2 Targeting Investors
  • 5.8.1 Investor Relations and Outreach
  • 6 Securities Laws Pertaining to Municipal Debt
    Municipal bonds, notes, certificates of participation, and similar obligations sold to investors (“municipal securities”) are generally subject to federal and state securities laws.
  • 6.1.4.1 Recent SEC Enforcement Focus
  • 6.1.4.2 Lessons from SEC Cases
  • 6.2 Roles and Responsibilities of Other Financing Participants
    The duties and obligations of consultants and advisors subject to rules and professional responsibility standards.
  • 6.2.1 Municipal Advisors and Underwriters
  • 6.4 Other Marketing Activities and Other Public Statements
  • 7.2.1 Local Bond Disclosures
  • 8.2.3 Record keeping and Reporting
    Record keeping essential to maintaining tax exempt status of bonds.
  • 8.4 Continuing Disclosure
    Public agencies take on certain responsibilities to file information regularly when they issue municipal securities, including an annual report and notices of certain events.
  • 8.4.2 Event Notices
    Event notices required by SEC Rule 15c2-12.
  • 8.4.4 Incentives for Compliance
    Failure to comply with the requires of SEC Rule 15c2-12 must reported in any subsequent public offering.
  • A.6 General Bond Statutes
  • underwriter’s counsel
    • i.4.1.1 PreIssuance Phase
    • 6.2.2 Attorneys
    • 6.3 The Official Statement
      The offering document in a public offering of municipal securities.
    • 6.3.1 Role and Purpose of the Official Statement and the Preliminary Official Statement
• underwriter’s discount
  • underwriters gross spread (underwriter’s discount)
  • 2.2.2.3 Variable-Rate Debt
  • 4.2.2 Political Subdivision Sovereign Powers Requirement
    Political subdivision defined for purposes of the Tax Code.
  • 4.8.2.1 Categories of Proceeds
  • 4.8.3 Yield
    The yield on a bond issue defined.
  • 5.2 Competitive Sales
    The sale of debt using a competitive pricing approach.
  • 5.2.2 Disadvantages of a Competitive Sale
  • 5.3 Negotiated Public Offerings
    The sale of debt using a negotiated approach to pricing.
  • 5.3.2 Disadvantages of a Negotiated Public Offering
  • 5.3.4 Pricing of a Negotiated Public Offering
  • 5.4 Costs of Issuance
    The costs of issuance (COI) are the expenses paid by or on behalf of the issuer in connection with the sale and issuance of publicly offered bonds.
  • 5.4.2 Underwriting Fees and Expenses
• unfunded accrued actuarial liability (UAAL)
  • 3.3.2.2 Pension Obligation Bonds

V

• validation action
  • Validation Action
  • Validation
  • i.4.4 Additional Legal Requirements – Internal Boards, Reporting to CDIAC, and Voter Approval
  • 3.3.2.2 Pension Obligation Bonds
  • 3.3.5 Teeter Bonds
    Teeterbonds are secured by a pledge of the delinquent property tax receivables and are generally also payable from the county’s general fund.
  • A.6 General Bond Statutes
• variable-rate
  • Variable Rate
  • i.4.1.3 Post-Issuance Phase
  • i.4.2.4 Decision #4 – Select an interest rate type
  • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
  • 2.2.2 Term and Interest Rate Mode
    Structural features: terms and interest rate mode.
  • 2.2.2.2 Short-Term Debt
  • 2.3.1.3 Optional Redemption
    Optional redemption of principal
  • 2.3.3 Interest Rate Swaps and Synthetic Structures
    Changing the substantive financial terms of a debt from a fixed-rate obligation to a variable-rate obligation
  • 3.3.6.1 Public Enterprise Revenue Bonds
• variable rate demand obligations (VRDOs)
  • i.4.2.7 Decision #7 – Evaluate municipal market opportunities to use debt financing
  • 2.2.2.3 Variable-Rate Debt
  • Figure 2-1 Basic Cash Flow for a Variable-Rate Demand Obligation or “VRDO”
  • 3.4.2 Long-Term, Variable-Rate Debt
  • 3.4.2.2 Tender or Demand Obligations
    Long-term obligations that achieve short-term interest rates by offering a “tender” or “put” feature.
  • 5.5.3 Alternative Financing Considerations
    Issuer considerations when using alternative financing, which typically includes bank loans, direct-purchase bonds, and other types of privately placed debt
  • 6.3.4 Transactions with Credit or Liquidity Support
    The OS must include a description of the terms of that credit or liquidity support and disclosure regarding the credit or liquidity provider
  • 8.4.3 Exceptions to Rule 15c2-12 Continuing Disclosure Requirements
• volume cap
  • Volume Cap
  • 4.7.2.1 Volume Cap
    Requirements of private activity bonds
  • 4.10.4 Limitations on Pooled Financing Loans
  • 7.2.7 California Debt Limit Allocation Committee Reports
• voluntary closing agreement program (VCAP)
  • 8.3.7 Changes in Use of Bond-Financed Property
  • C.2 Regulatory Resources

W

• winning bid
  • 5.2.3 Documentation for a Competitive Sale
  • 5.4.2 Underwriting Fees and Expenses
• working capital expenditures
  • working capital expenses
  • 4.5 Cash Flow Borrowings
    Public agencies may find themselves temporarily short of cash to finance operations and may need to address the shortfall with a short term financing called a “cash flow borrowing.”
  • 4.8.2.2 Expenditure of Gross Proceeds(See “capital expenditures”)

X

Y

• yield
  • yield
  • yield to call
  • yield to maturity
  • yield verification consultant
  • taxable equivalent yield
  • i.4.2.4 Decision #4 – Select an interest rate type
  • 2.1 Overview
    Factors determining structure, including issuer, term, source of repayment, and debt limits.
  • 2.2.2.1 Long-Term, Fixed-Rate Debt
  • 2.4.7 Investments
    Decisions regarding the investment of proceeds
  • 3.3.4 TRANs and RANs
    Tax and revenue anticipation notes (TRANs) and revenue anticipation notes (RANs) may be used to finance current fiscal year expenses.
  • 3.5 Tax Treatment of Municipal Bonds
    A bondholder’s “after tax” return on a bond depends in part upon how interest on the bond is treated in calculating the bondholder’s income for federal and state income tax purposes.
  • 4.4.1 Issue Sizing and Term
    Limits on issue size and term pursuant to the Tax Code.
  • 4.6.2 Private Security or Payment Test
    One of several tests of private activity or benefit.
  • 4.8.1 General Background on Arbitrage Yield Restriction
  • 4.8.2.2 Expenditure of Gross Proceeds
  • 4.8.3 Yield
    The yield on a bond issue defined.
  • 4.8.3.1 Fair Market Value Rules
  • 4.8.3.2 Guaranteed Investment Contracts
  • 4.8.4 Arbitrage Yield Restriction Exceptions
    Important exceptions to this yield restriction rule.
  • 4.8.4.1 Initial Temporary Period
  • 4.8.4.3 Reserve Funds
  • 4.8.4.4 Other Exceptions
  • 4.8.5 Yield Restriction; Yield Reduction Payments
    Payments made to the U.S. Treasury when the yield on unexpended bond proceeds exceed limits in Tax Code.
  • 4.9 Arbitrage Rebate
    The requirement that arbitrage earning must be rebated to the federal government.
  • 4.9.2 Penalty in Lieu of Rebate
  • 5.3.1 Advantages of a Negotiated Public Offering
  • 5.3.4 Pricing of a Negotiated Public Offering
  • 8.3 Post-Issuance Federal Tax Law Requirements
    Compliance with tax covenants contained in the Tax Code is required while the bonds are outstanding in order to maintain the bonds’ “tax exempt” status.
  • 8.3.4 Monitoring Investment Income and Arbitrage Compliance
  • 8.3.5 Arbitrage Rebate
  • 8.3.6 Recordkeeping and Retention
  • 9.3 Investment Authority and Controlling Documents
    Investment authority and controlling documents regarding the investment of bond funds.
  • 9.4.1 Permitted Investments
    Types of investment vehicles that may be used to invest bond funds.
  • 9.4.2 Investments Specific to Bond Funds
  • 9.5.1 Arbitrage Rebate and Yield Restriction
  • 9.5.2 Investment Considerations
    Issuer considerations regarding investment of bond funds.
  • 9.6 Investment Review and Oversight
    The importance of review and oversight in the management of bond fund investments.
  • B.1.3.1.3 Policy Considerations for Issuing GO Bonds

Z