Expenditure of bond proceeds will be reviewed by the Oversight Officer or other appropriate department head or designee.
A. Requisitions: The Oversight Officer will establish a form and procedures for preparation and review of requisitions of bond proceeds, and maintain records of the date, amount and purpose of the disbursement. Requisitions must identify the financed property in conformity with the Tax Certificate and Agreement executed by the issuer at closing, including any certifications as to the location and character of the bond financed property.
B. Investment Earnings: Investment earnings on sale proceeds of the bonds will be tracked and will be requisitioned only for appropriate expenditures.
C. Capital Expenditures: The issuer will verify that all costs for which it requisitions bond proceeds are capital expenditures, except as otherwise permitted by the Tax Certificate and Agreement executed by the issuer at closing.
D. Debt Service Reserve Funds: Bond funded reserve funds cannot exceed the least of: 1) ten percent (10%) of the par amount of the bonds (or the issue price of the bonds, if there is more than a de minimis amount of original issue discount or premium); 2) maximum annual debt service; and 3) one hundred twenty five percent (125%) of average annual debt service. The initial funding of any reserve fund will be measured against this limit.
E. Reimbursement: Requisitions for costs that were paid prior to the issuance of the bonds are, in general, limited to costs paid subsequent to, or not more than sixty (60) days prior to the date a "declaration of intent" to reimburse the costs was adopted by the issuer. If proceeds are used for reimbursement, a copy of the declaration will be obtained and included in the records for the bonds, if not already part of the bond transcript.
F. Final Allocation: Requisitions will be summarized in a "final allocation" of proceeds to uses not later than eighteen (18) months after the in-service date of the financed property (and in any event not later than 5 years and 60 days after the issuance of the bonds).
G. Timing Of Expenditures: Expenditure of proceeds will be measured against the issuer's expectations, as set forth in the Tax Matters Certificate executed in connection with the particular bond issue, to spend or commit five percent (5%) of net sale proceeds within six (6) months, to spend eighty five percent (85%) of net sale proceeds within three (3) years, and to proceed with due diligence to complete the project and fully spend the net sale proceeds. Expected expenditure schedules, project timelines and plans and specifications will be maintained to support expectations. Reasons for failure to meet the expected schedule will be documented and retained in the records for the bonds.
H. Rebate Spending Exceptions: Expenditure of proceeds will be monitored for compliance with spending exceptions to the rebate requirement, as follows:
1. If the six (6) month spending exception applies, expenditure of gross proceeds will be monitored against the following schedule: One hundred percent (100%) within six (6) months.
2. If the eighteen (18) month spending exception applies, expenditure of gross proceeds will be monitored against the following schedule:
a. Fifteen percent (15%) within six (6) months;
b. Sixty percent (60%) within twelve (12) months;
c. One hundred percent (100%) within eighteen (18) months.
3. If the two (2) year spending exception applies, expenditure of "available construction proceeds" will be measured against the following schedule:
a. Ten percent (10%) within six (6) months;
b. Forty five percent (45%) within twelve (12) months;
c. Seventy five percent (75%) within eighteen (18) months;
d. One hundred percent (100%) within twenty four (24) months. (2019 Compilation)