Prerequisites to Bond Issuance Flashcards
When analyzing bond where look for limits & include them in the requisite resolution:
CC STOP ----------- Constitution Contract Statute Ordinance what is Pledged.
What are the constitutional limits on bond issuance?
Constitutional Restrictions can’t Purposely Lend Credit or Mortgage an Extraterrestrial ----------- 1. Public Purpose 2. No lending of credit 3. No mortgage 4. Extraterritorial Powers
What contract restriction might you have to consider before a bond issuance?
Contractual requirements that things have parity
What legislative declaration is needed in your resolution?
For a public purpose.
Presumed valid and should be considered correct unless patently erroneous
When declaring public purpose, compare LG powers.
~~~same discussion as pub purp in Emin Dom~~~
Non-C: all pwrs of self govt AS IS PROVIDED in general or special law.
———–
Muni:
Govtl, corporate and proprietary pwrs
To conduct govt, perform functs + services:
(a) For muni purposes
(b) Except as OTHERWISE PROVIDED BY LAW.
When declaring public purpose, state powers of Munis.
~~~same discussion as pub purp in Emin Dom~~~
Govtl, corporate and proprietary pwrs
To conduct govt, perform functs + services:
———–
(a) For muni purposes
(b) Except as OTHERWISE PROVIDED BY LAW.
When declaring public purpose, state powers of Charters.
~~~same discussion as pub purp in Emin Dom~~~
How remember:
c”H”arter is alphabetically close to “I”nconsitent.
When declaring public purpose, state powers of Non-Charters.
~~~same discussion as pub purp in Emin Dom~~~
How remember:
“N”on C is alphabetically close to “P”rovided.
STATUTORY ----------- TYPICAL REVENUE + GOB ----------- What statutes empower the LGs to issue Typical Revenue Bonds AND Gen Oblig Bonds?
Counties (a) General (FS 125.013) (b) Water + Sewer revenue + GOB (FS 153) ----------- Munis (a) Capital 'or other' (FS 166.111) ----------- C+M (a) Can refund (FS 132), (b) Revenue bonds (FS 159)
STATUTORY ----------- TYPICAL REVENUE + GOB ----------- What is unique language in the Muni Home Rule regarding its powers to issue bonds?
Munis can issue bonds for capital “or other” projects.
FS 166.111
STATUTORY ----------- TYPICAL REVENUE + GOB ----------- What the maximum duration of a county bond?
40 yrs
STATUTORY ----------- TYPICAL REVENUE + GOB ----------- What's the current max interest rate on a county bond?
7%
Statute has complex formula.
STATUTORY ----------- COPS ----------- What are the 2 time limits on County lease purchasing COPS?
- Can’t exceed 30 yrs to mature.
2. If term is longer than 5 yrs, cannot pay from AV.
STATUTORY ----------- COPS ----------- Can Cities enter lease purchase COPS?
Yes per Home Rule.
STATUTORY ----------- CONDUIT ----------- What type of facilities get built w/ conduit bonds?
- Health (154),
- Housing (159) & `
- Industrial development (159) manufacturing, tourism, educational facilities + social service facilities.
STATUTORY ----------- CONDUIT ----------- How are conduit bonds paid for?
Revenue of the project financed.
STATUTORY ----------- CONDUIT ----------- Who are issuers & who are borrowers of conduit bonds?
Issuer:
Industrial Development Authorities, Housing Finance Authorities, Health Facility Authorities, counties + cities.
and other governmental units on behalf of an underlying borrower.
Borrower:
a private party
STATUTORY ----------- CRA/TIF ----------- What are TIFs used for?
Community redevelopment (FS 163).
STATUTORY ----------- CRA/TIF ----------- What are TIFs paid from?
The “tax increment” or the difference between the assessed value of the property before and after the redevelopment project.
STATUTORY ----------- SPECIAL ASSESSMENT ----------- What is a special assessment?
- Charge imposed against property
- In a particular locality
- B/c that property recs a special benefit apart from the gen public’s bene
- From an improvement.
STATUTORY ----------- SPECIAL ASSESSMENT ----------- How determine the amount of a special assessments charged to Owner?
- Apportioned according to the value of the bene rec.
* Not calculated by cost of the improvement.
STATUTORY ----------- SPECIAL ASSESSMENT ----------- What is the cap on a special assessment charge?
Can’t exceed value of the benefit OR cost of the improvement.
STATUTORY ----------- SPECIAL ASSESSMENT ----------- What is authority for a Muni to issue special assessment bonds?
- Ch. 170
* Caselaw says Home Rule, pass an Ordinance.
STATUTORY ----------- SPECIAL ASSESSMENT ----------- What is authority for Counties to issue special assessment bonds?
- Home Rule, pass an ordinance under Ch. 125.
* Water + Sewer improvements + acquis. (FS 153)
How might charter/ordinances restrict ability to issue bonds?
Might impose restrictions, ex. pass by ordinance, not resolution; LG attorney must sign.
How might contract provisions restrict ability to issue bonds?
- New debt must have parity w/ existing debt.
- Anti-dilution, AV must be a certain level.
- Use of revenue.
- Require consent of lender.
When pledging revenue, does UCC apply?
No.
What extra assurances might a lender need, re: revenue pledged?
Attorney opinion letter that security interest in revenue is valid & binding.
What are the mechanics of handling the revenue?
Revenue is held in trust.
Often use a Trustee.
Can revenue bonds be repealed?
No. Contracts clause.
• Fed: No State shall issue any law
• State: No law shall be passed
impairing contracts.
Bonds secured by a covenant to budget and appropriate legally available non-ad valorem
revenues for the payment of debt service are:
(a) not permitted under FL law
(b) permitted but must be validated first
(c) permitted but only for cities and charter counties
(d) permitted
D
CContracts STOP
K may require cov to approp + antidilution
The Constitution of the State of FL, prohibits cities, counties & LGs from giving, lending or using their taxing power to credit or aid any corporation.
TRUE
not a trick question about the U.S. constitution
LGs may only incur debt for a valid public purpose.
TRUE
ConstC STOP
public purpose must be established in the resolution.
- Charts - all pwrs of self gvt not inconst w/ gen law
- NCs - all pwrs slf gvt provided by gen + spec law.
- Munis - govt, corp, prop pwrs to conduct govt, perform function + services & may exercise any pwr for muni purp except as otherwise provided by law
• Deference to public purp unless clearly erroneous.
Restrictions on a LG’s ability to issue or incur debt may be found in:
(a) Constitution, charter, statutes, ordinances, resolutions and contracts
(b) Constitution and statutes only
(c) Constitution, charter and statutes only
(d) none of the above
A
CC STOP
Const, Contracts Statutes, Ordinance, Pledge
Existing ordinances and/or resolutions may limit the ability of a LG to incur debt.
TRUE
CC ST”O”P
In determining whether a LG has duly created and perfected a security interest in pledged revenues, the requirements of Chapter 679, Florida Statutes (UCC), must be satisfied.
FALSE
