Prerequisites to Bond Issuance Flashcards
When analyzing bond where look for limits & include them in the requisite resolution:
FINANCE ----------- 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 bond issuance resolution?
CONSTITUTIONAL ---------- 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.
What statutes empower 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)
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
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.
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:
LG via 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
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.
What is a special assessment?
FINANCE ----------- • 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.
What is the statutory 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.
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 pledged 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
FINANCE ----------- TRUE OR FALSE ----------- LGs may only incur debt for a valid public purpose.
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
