Expenditure of any proceeds of the lease 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 proceeds, if any, of the lease, and maintain records of the date, amount and purpose of the disbursement. Requisitions must identify the leased property in conformity with any tax certificate executed by the City at closing, including any certifications as to the location and character of the leased property.
B. Investment Earnings: Investment earnings on any proceeds of the lease will be tracked and will be requisitioned only for appropriate expenditures.
C. Capital Expenditures: The City will verify that all costs for which it requisitions proceeds of a lease are capital expenditures, except as otherwise permitted by the tax certificate executed by the City at closing.
D. Reserve Funds: Any reserve funds funded by lease proceeds cannot exceed the least of: 1) ten percent (10%) of the "par amount" of the lease (or the "issue price" of the lease 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 before the execution of the lease are, in general, limited to costs paid after, or not more than sixty (60) days before, the date a "declaration of intent" to reimburse the costs was adopted by the City. If proceeds are used for reimbursement, a copy of the declaration will be obtained and included in the records for the lease, if not already part of the lease 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 leased property (and in any event not later than 5 years and 60 days after the execution of the lease).
G. Timing Of Expenditures: Expenditure of proceeds will be measured against the City's expectations, as set forth in any tax certificate executed in connection with the particular lease, to spend or commit five percent (5%) of net lease proceeds within six (6) months, to spend eighty five percent (85%) of net lease proceeds within three (3) years, and to proceed with due diligence to complete the project and fully spend the net lease proceeds. Expected expenditure schedules, project timelines and plans and specifications (or documentation of the proposed scope of work, as applicable) will be maintained to support expectations. Reasons for failure to meet the expected schedule will be documented and retained in the records for the lease.
H. Rebate Spending Exceptions: Expenditure of any proceeds of a lease 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)