Northwest state community college (the
"college") uses bonds as one means of financing capital projects in support of
its mission. This post-issuance compliance policy (the "policy") outlines the
policies and procedures to promote compliance with federal income tax and
securities laws, as well as the requirements set forth in the bond documents
for each bond issue. This policy is to strictly follow the U.S. Constitution
and laws and the Ohio Constitution and laws. For purposes of this policy, the
term "bonds" means any obligation of the college incurred for the purpose of
borrowing money, including, without limitation, bonds, notes and certificates
of participation in capital leases.
(A)
Monitoring of
post-issuance compliance
Monitoring of post-issuance compliance
for bonds will be the responsibility of the chief financial officer (the
"CFO"). The CFO may designate employees to carry out the CFO's duties under
this policy on the CFO's behalf in the same manner and with the same effect as
any similar designation for any other purpose permitted by law.
(B)
Compliance with covenants in bond documents
The CFO shall ensure compliance with
all financial and operational covenants made by the college in the bond
documents, including but not limited to financial reporting, insurance
requirements, the recording of mortgages, restrictions on incurring additional
indebtedness, restrictions on the disposition of property, and restrictions on
granting liens or encumbering property.
(C)
Federal tax law
compliance
(1)
Proper use of proceeds
The CFO shall ensure that bond proceeds
are allocated to expenditures in a manner that is consistent with the purpose
for which each bond issue is undertaken, as set forth in any tax compliance
certificate or agreement related to each bond issue.
(2)
Investment of
bond proceeds
The CFO shall ensure that bond proceeds
are invested in investments that are permissible under the terms of the Ohio
Revised Code, the bond documents, and any applicable federal tax
laws.
(3)
Arbitrage rebate calculations
The CFO shall ensure the timely
completion of arbitrage rebate calculations and filings.
(4)
Administration of direct pay bonds
The CFO shall ensure the proper
administration of each issue of bonds qualifying for the payment by the federal
government of a credit equal to a percentage of interest on such bonds,
including the timely completion and filing of any forms required by the
internal revenue service to maintain or establish the applicable status of the
bonds for purposes of federal income taxation.
(5)
Use of
bond-financed facilities
The CFO shall consult with bond counsel
for the college before entering into any agreement or other arrangement for the
sale, lease, or use of bond-financed property, including, but not limited to,
service, vendor, and management contracts, research agreements, licenses to use
bond-financed property, or naming rights agreements. The CFO or the designee of
the CFO shall review such agreements for compliance with federal tax laws and
complete a private business use contract review worksheet to document that such
review has been completed.
(6)
Post-issuance
transactions
The CFO shall consult with bond counsel
for the college before making any modifications or amendments to the bond
documents for a bond issue, including, but not limited to, entering or
modifying investment agreements; making any change in security for the bonds;
engaging in post-issuance credit enhancement transactions (e.g., bond
insurance, letter of credit) or hedging transactions (e.g., interest rate swap,
cap); terminating or appointing successor trustees; releasing any liens; or
reissuing the bonds.
(7)
Remedial
action
In the event that it is determined that
any use of bond proceeds or bond-financed facilities is inconsistent with the
character of the status for federal income tax purposes of the bonds, the CFO
shall consult with the college's bond counsel for the purpose of determining
the nature and extent of any remedial action necessary or proper for the
college to take with respect to such bonds or bond-financed facilities
according to treasury regulations section 1.141 -12 or other remedial actions
authorized by the commissioner of internal revenue under 1.141
-12(h).
(D)
Federal
securities law compliance
(1)
The CFO shall ensure compliance with all applicable
federal securities laws and regulations, including the continuing disclosure
requirements of rule 15c2-12 promulgated under the Securities Exchange Act of
1934.
(2)
To the extent required by any continuing disclosure
agreement, the CFO shall:
(a)
On an annual basis, submit an annual financial report,
including audited financial statements and any other information required by
the continuing disclosure agreement, to the entities required by the bond
documents.
(b)
Make a timely report of any significant material events
(as defined by the continuing disclosure agreement) related to the college's
outstanding bond issues to the entities required by the bond
documents.
(E)
Recordkeeping
(1)
Responsibility for records maintenance
(a)
The CFO shall be
responsible for maintaining records related to bonds of the
college.
(b)
The CFO shall maintain a central list of records
related to each issue of bonds of the college. The list shall identify:
(i)
The name and date
of the document related to the issue,
(ii)
The person or
office responsible for the document, and
(iii)
The physical or
electronic location of the document.
(2)
Bond records to
be maintained
(a)
The following records shall be maintained for each
outstanding bond issue for the term of the outstanding bond issue plus three
years:
(i)
Basic
records relating to the bond transaction, including the trust indenture, loan,
lease, or other financing agreement, the relevant IRS form 8038 (including
forms 8038-G, 8038-B, or 8038-TC, as applicable) with proof of filing, and bond
counsel opinion shall be maintained by the CFO's office;
(ii)
Documentation
evidencing the expenditure of bond proceeds, such as construction or contractor
invoices and receipts for equipment and furnishings, as well as records of any
special allocation made for tax purposes shall be maintained by the CFO's
office;
(iii)
Documentation evidencing the lease or use of
bond-financed property by public and private sources, including, but not
limited to, service, vendor, and management contracts, research agreements,
licenses to use bond-financed property, or naming rights agreements shall be
maintained by the CFO's office; and
(iv)
Documentation
pertaining to investment of bond proceeds, including the yield calculations for
each class of investments, actual investment income received from the
investment of proceeds, and rebate calculations shall be maintained by the
CFO's office.
(b)
The CFO shall maintain the college's audited financial
statements for not less than seven years.
(F)
Bonds issued on
behalf of college-supported entity
With respect to bonds issued by the
college on behalf of any college-supported entity, the CFO shall coordinate
with the respective fiscal officer of such entity to ensure compliance with all
aspects of this policy.
(G)
Bond counsel
review
(1)
The
CFO may engage bond counsel to assist in implementing this policy, including,
but not limited to, assistance in the following areas:
(a)
Rebate
calculations and compliance;
(c)
Periodic review of the central list of records related
to bonds for compliance with federal tax laws regarding private business
use;
(d)
Other federal tax law compliance, including any annual
reporting requirements that may be imposed by the internal revenue service;
and
(e)
Federal securities law compliance.
(H)
Training requirements
Within six months of becoming the CFO,
and on an as-needed basis thereafter, the CFO and the CFO's designees, if any,
shall undergo training regarding basic federal tax concepts relating to bonds
and records required to be maintained under this policy.
(I)
Annual
policy review
On an annual basis, or sooner if deemed
necessary by the CFO, the CFO shall review this policy and assess the college's
compliance with this policy. The CFO shall make changes to this policy as
appropriate to ensure compliance with any covenants in the bond documents or
the requirements of federal tax and securities laws and any other applicable
law.
(J)
Miscellaneous
(1)
Internal use
only
This policy is intended for the
internal use of the college only and is not intended to establish any duties in
favor of or rights of any person other than the college.
(2)
Waiver
of procedures
The officers and employees charged by
this policy with performing or refraining from any action may depart from this
policy when they in good faith determine that such departure is in the best
interests of the college and consistent with the duties of the issuer under
applicable laws. If the CFO is charged by this policy with taking or refraining
from such action, any such departure shall require review by bond
counsel.
