Projects should promote economic development, provide financial feasibility, and include construction. FDFC will not issue bonds to finance or refinance operating expenses or solely for the financing of land, marketing, pre‐construction expenses, or other soft costs that do not provide for improvements to real property.
INTERLOCAL AGREEMENT REQUIREMENT
FDFC issues bonds in counties throughout Florida through interlocal agreements.
BORROWERS FINANCING TEAM
The Borrower’s financial team provides legal and financial information and services to the Borrower. FDFC should evaluate the professionals proposed by the Borrower to ensure firms are qualified and that the terms and conditions of the engagements, including fees and expenses, are fair, reasonable, and appropriate. The Borrower should submit the names, contact information, and qualifications for all professionals it proposes to utilize for the transaction with its application.
The Borrower selects the firm that will serve as bond counsel for the transaction. Bond Counsel is responsible for providing legal opinions in connection with an issuance of bonds and advises the issuer and the underwriter on the legal aspects of the bond issue and may also serve as disclosure counsel. The underwriter or placement agent may retain their own counsel to review the transaction and negotiate the purchase of the bonds on their behalf. Such firm must be “nationally recognized” as bond counsel.
Issuer’s Counsel should provide the full range of legal services required by FDFC in connection with the successful issuance and delivery of bonds, including review of all proposed transactions, to ensure that the representations, commitments, and obligations in the bond documents do not conflict with FDFC Policy and to assist FDFC in determining the accuracy and completeness of material information. Issuer’s Counsel will not act as Borrower’s counsel or simultaneously represent any other party in a transaction. However, Issuer’s Counsel may both represent FDFC and serve bond counsel in a transaction with FDFC’s approval, only if (i) it can be demonstrated that such representation achieves a cost savings for the Borrower, (ii) the representation of FDFC and the other parties will not be materially limited or impacted, and (iii) the Borrower is adequately represented by independent counsel with sufficient knowledge and expertise in public finance. engage legal counsel to review each proposed financing transaction on its behalf. The applicant shall be responsible for the Issuer Counsel’s fee which may vary depending on the complexity of the transaction.
POST ISSUANCE COMPLIANCE
Following the issuance of bonds, and in addition to its secondary market disclosure obligations, the Borrower will have post-issuance responsibilities with regards to monitoring a bond issue for compliance with federal tax rules for the duration that bonds are outstanding. Because the IRS has an active audit program to evaluate post-issuance compliance with tax-law requirements relating to the investment of bond proceeds, expenditure and allocation of bond proceeds, and record retention, FDFC requires all Borrowers to develop and maintain post-issuance compliance policies and procedures to ensure compliance with all applicable requirements.
It is critical that the Borrower maintains all material documents and records for the life of the bonds plus three years, in accordance with IRS recommendations. Failure to fulfill the responsibility for monitoring and maintaining adequate records may result in the bonds losing their tax-exempt status. Additionally, for tax-exempt bonds, FDFC requires Borrowers to be responsible for all arbitrage rebate calculations and all rebate payments.
Bond counsel shall be responsible for preparing and filing the “Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038,” or successor form (the “Form 8038”), with respect to each issue of bonds. The Executive Director shall be listed as the officer employee of the issuer whom the IRS may contact for more information with respect to all bonds issued by FDFC. The Executive Director shall sign and return the Form 8038 to bond counsel for filing with the IRS. A fully executed copy of the Form 8038, as filed with the IRS, shall be delivered to FDFC.
PERFORMANCE METRICS AND ANNUAL REPORTING
Performance metrics create accountability for the use of economic development incentives, such as access to lower-cost tax-exempt financing provided by the FDFC. All projects financed through FDFC shall be monitored, for so long as bonds are outstanding, to measure the economic impact of the project. FDFC will track each project’s performance against projections and to measure performance of certain quantitative metrics set forth in the resolution approving the project.
Measurable economic impacts may include the project’s expansion of tax base, job creation, development of targeted economic sectors, business retention, recruitment, blight mitigation, improvement of economically distressed neighborhoods, housing stock creation for targeted populations, or environmental and infrastructure improvements.
All Borrowers shall, at least annually, or at a frequency set forth by resolution of the Board, provide FDFC with reports on each project’s performance against projections so that FDFC can evaluate the project’s economic impact against set quantitative metrics.