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.