Bond, Types

Question 1

GOB, payable from?

Answer 1

AV

Question 2

GOB, referendum?

Answer 2

Yes. Combo of pd w/ AV + over 1 yr.

Question 3

GOB, strict permissible uses?

Answer 3

Capital Projects ONLY.

Question 4

LOOK FOR HERRING - GOB, what use wd fail?

Answer 4

Operating expense.

Question 5

GOB, when is no vote needed?

Answer 5

No 2nd vote if just refi results in lower int rate.

Question 6

What decides if you need a vote?

Answer 6

COMBO - Time, if over a year + AV.

Question 7

What is source of payment for revenue bond?

State specific source for typical rev bond.

Answer 7

Revenue.
—
Typically you get pd w/ a GUN [Gas, Utility, Non-av]
———–
1. GAS taxes, State revenue sharing.
a) Guaranteed Entitlement Revenues and
b) Local Government Half-Cent Sales Tax.
2. UTILITY Rev.
3. NON-AV taxes, ex. excise taxes

Question 8

State the 6 types of revenue bonds.

Answer 8

Typical COPS LAC TIF (LeaseAssessConduit)

con = non av + non 2004 fees pd (2003 gen info only)
CONduit = no can do it.
—
cops 5-30 yrs., trustee, public issuance.

Question 9

Typical Rev Bond, Source of Payment

Answer 9

1. Gas taxes, State revenue sharing.
   a) Guaranteed Entitlement Revenues and
   b) Local Government Half-Cent Sales Tax.
2. Utility Rev.
3. Non-AV taxes, ex. excise taxes

Question 10

Typical Rev Bond are:

1) Secured by what? What does Vendor get?

2) Source of payment.

Answer 10

Typically get pd w/ a GUN. [Gas, Utility, Non-av]
—-
1. Gas taxes, State revenue sharing.
a) Guaranteed Entitlement Revenues and
b) Local Government Half-Cent Sales Tax.

2. Utility Rev.
3. Non-AV taxes, ex. excise taxes

Question 11

Typical Rev Bond, What is Payment Subject to?
———–
BONUS:
If you were a Ktor, what wd you typically get pd with?

Answer 11

LG’s ability to pay its essential services.
———–
Typically you get pd w/ a GUN [Gas, Utility, Non-av]

Question 12

COPS Rev Bonds:

1) Source of Payment
2) Length.
3) Type of issuance.
4) Allegation needed?

Answer 12

1) ANY revenue of LG, including AV
UNLESS
lease exceeds 5 yrs, can’t use AV.
Why? b/c its subject to appropriation.
———–
2) Can’t exceed 30 yrs [bonds normally can’t exceed 40 yrs].
———–
3) Public issuance.
———–
4) Trustee.

Question 13

What is timing of COPS Rev Bond?

Answer 13

Coincide w/ fiscal yr for appropriation.
—
Cops sentence you 5-30 yrs + u become a Trustee
———–
5 yrs = can’t use AV is exceeds
30 yrs = max duration [normally 40]
Trustee required.
Public issuance only.

Question 14

What kind of issuance for COPS Rev Bond?
What’s the other 3 oddities?

Answer 14

Public issuance.
———–
(1) Pay AV up to 5 yrs only.
(2) Cannot exceed 30 yrs.
(3) Allege trustee in validation.*
*I’ve seen indication that trustee is common for all revenue bonds.

Question 15

What are you selling in COPS Rev Bond?

Answer 15

Undivided interest in lease.

Question 16

Which revenue bond has no revenue pledged?

Answer 16

Equipment lease paymts subjt to appropriation.

Question 17

What cannot be a remedy under Equip. Lease?

Answer 17

Foreclosure.

Question 18

Who do you use a Conduit bond with?

Answer 18

Health, Housing, Industrial Dev. Auths.
Issue on behalf of borrower.
———–
con = non av + non 2004 fees pd (2003 gen info only)
CONduit = no can do it.
—
cops sentence you 5-30 yrs. where become a Trustee + Public Issuance

Question 19

There’s no referendum for CRA/TIF. Constitutional?

Answer 19

Yes, per the Strand case,
CRA/TIF = revenue bond.

How remember? TIFfany’s sells Strands.

Question 20

State source of Special Assessment Bonds payments.

Answer 20

From specific properties
1) Receiving the special benefit.
2) Apportioned by value received.

Question 21

Can CRAs address slum or blight?

Answer 21

Yes.

Question 22

What’s the difference b/w slum and blight

Answer 22

slum rhymes w/ bum = poor
blight akin to bloat = lazy/neglectful.
———–
Slum. Poverty/crime/overcrowding.
Blight. Neglected/abandoned.

Question 23

What’s a unique post-issuance exemption to Conduit bonds?

Answer 23

con = non av + non 2004 (fees pd) (2003 gen info only)
CONduit = no can do it.
—
cops sentence you 5-30 yrs + u become trustee + Public Issuance

Question 24

TRUE OR FALSE
———–
GOBs maturing more than 1 year from the date of issuance can be issued only for capital projects or refunding purposes.

Answer 24

TRUE.

Question 25

Once a LG irrevocably pledges revenues to the payment of its bonds, this pledge can be revoked if:
(a) the bonds are no longer outstanding
(b) the LG replaces revenues with equally credit-worthy payment source
(c) the revenues pledged were state revenues and the state reserved the right to revoke the funding source
(d) (a) and (c)

Answer 25

D.

not A. look for state reservation

Question 26

LGs with taxing power may not grant a sec int in pub prop unless:
(a) is purch money sec int app’d by ordinance aft PH
(b) creation is approved at referendum
(c) super maj of LG governing body approves aft PH
(d) none of the above

Answer 26

B.
———–
i always want to say d.
But, a security interest in public property CAN be granted IF APPROVED @ referendum.
———–
~confirmed via teacher.

Question 27

If a LG defaults on the payment of traditional revenue bonds, a bondholder can compel the LG to levy additional ad valorem taxes if necessary to pay the principal and interest on the revenue bonds.

Answer 27

FALSE

Question 28

Cities, counties and other LG entities in FL are prohibited from issuing bonds unless the interest is exempt from federal income taxation.

Answer 28

FALSE.

Question 29

What are the 5 types of revenue bonds?

Answer 29

1) Typical
2) COPs
3) Lease
4) spec Assessment
5) Conduit
4) TIF/CRA
———–
con = non av + non 2004 fees pd (2003 gen info only)
CONduit = no can do it.
—
cops 5-30 yrs., trustee, Public Issuance

Question 30

TRUE OR FALSE
———–
Local governments may, without voter approval, purchase vehicles under an installment sale contract under which the seller retains a purchase money security interest in the vehicle.

Answer 30

FALSE

Question 31

Which type of bonds require a trustee?

Answer 31

COPS!
———–
cops sentence you 5-30. jails have TRUSTEES. + Public Issuance.
———–
~~possibly all revenues [except equip = no revenues just appropriation] require trustee~~
———–
LG enters lease w/ non-profit. Trustee sell interest in lease agreement to outside investors. Their certificate allows them to ‘participate.’

Question 32

Which type of bonds cannot exceed 30 years?

Answer 32

COPS.
1) Cannot exceed 30 years.
2) If exceed 5 years, can’t pay from A-V.
3) Public Issuance.
4) Trustee.

Question 33

Distinguish COPS and Conduit revenue bonds.

Answer 33

Cops sentence you 5- 30 yrs.
CONduit says no con du it.
———–
COPS - pay w/ AV up to 5 yrs, don’t exceed 30 yrs.
Conduit - NEVER use AV + NEVER 2004