Memorandum

City of Lawrence

Finance Department

TO:	Dave Corliss, City Manager
FROM:	Ed Mullins, Finance Director
Date:	June 12, 2012
RE:	Tax and Securities Compliance

Background

The Internal Revenue Service (IRS) is directing that issuers of tax advantaged bonds establish procedures to insure compliance with the laws and regulations governing their issuance.  The procedures include the delegation of responsibilities, the proper accounting of debt proceeds, the management of records and the monitoring of the use of the financed assets to insure continued eligibility of the tax advantages present at the time of issuance.  The City Commission is requested to pass a Resolution adopting the procedure.

Description

The attached Tax and Securities Compliance Procedures have been reviewed by bond counsel and are intended to meet the directive of the IRS.  The procedure names the Finance Director as Bond Compliance Officer and makes the position responsible for coordinating compliance with the procedures.  The Accountant is responsible for accounting for bond proceeds associated with new projects as well as refundings.  The City Clerk is responsible for maintaining bond related records including resolutions, bond transcripts, studies and forms. 

Entities that are the beneficiaries of a City debt issue are also required to follow these procedures.  These conduit users, such as the Lawrence Memorial Hospital and companies using industrial revenue bonds to finance facilities, must name an individual to be responsible for compliance and adhere to the same procedures as the City.   

Recommendation

It is recommended that the City Commission adopt Resolution No. 6977, approving the Tax and Securities Compliance Procedures.