8717-14 Adopting post-issuance compliance procedures

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USE OF PROCEEDS CHECKLIST AND REMEDIAL ACTION INSTRUCTIONS FOR NONQUALIFIED OBLIGATIONS The City has certified and will certify that it will spend the Gross Proceeds of the Obligations and use Financed Facilities in a manner that complies with the restrictions and requirements imposed by the Code and Regulations on Tax - Exempt Obligations. The City has farther certified and will further certify that it will comply with the remedial action requirements, if necessary, set forth in Treasury Regulations § 1.141 -12. These guidelines provide guidance for that compliance. Capitalized terms not defined in these procedures have the meanings given in Attachment A. PART 1- USE OF PROCEEDS CHECKLIST 1. Use of Proceeds. a. Ensure there exists a clearly established accounting procedure for tracking investment and expenditure of Proceeds, including Investment Proceeds. b. At or shortly after issuance of the Obligations, allocate Proceeds to Reimbursement of Prior Capital Expenditures, as permitted under the Notice of Official Intent and federal reimbursement guidelines. C. Ensure that a final allocation of Proceeds (including Investment Proceeds) to qualifying expenditures is made if Proceeds are to be allocated to project expenditures on a basis other than "direct tracing" (direct tracing means treating the Proceeds as spent as shown in the accounting records for Proceeds draws and project expenditures). An allocation other than on the basis of "direct tracing" is often made to reduce the Private Business Use (see Section 2, below) of Proceeds that would otherwise result from "direct tracing" of Proceeds to project expenditures. This allocation must be made within 18 months after the later of the date the expenditure was made or the date the project was placed in service, but not later than five years and 60 days after the Issuance Date of the Obligations or 60 days after the Obligations are retired. Bond counsel can be consulted to assist with the final allocation of Proceeds to project costs. d. Maintain careful records of all Financed Facilities and other costs (e.g., Issuance Costs, credit enhancement and capitalized interest) and uses (e.g., deposit to reserve find) for which Proceeds were spent or used. Note the placed -in- service date for each of the Financed Facilities. These records should be maintained separately for each series of Tax - Exempt Obligations. e. On at least an annual basis, identify all current and contemplated uses of Financed Facilities and confer as necessary with Bond Counsel to ensure that the use of the Financed Facilities comply with the covenants and restrictions set forth in the tax certificate. 7