ALBURNETT COMMUNITY SCHOOL DISTRICT Special Board Meeting Wednesday, May 6, 2015 5:30 p.m. Board Room Tentative Agenda: I.

Call to Order

II.

Approval of Agenda

III.

Welcome Visitors A. Public Hearing on 2015 Additions & Renovations—5:30 p.m.

IV.

Dialogue Action Items A. Discussion of 2015 Addition & Renovations B. Board Policy 704.2R1 Post-Issuance Compliance Regulation for Tax-Exempt Obligations C. Ahlers & Cooney, P.C. Engagement Letter D. Contract Resignations 1. Kim Barnes, Associate 2. Mike Henle, Asst. Football Coach 3. Amelia Kibbie, Large Group Speech Coach 4. Beth Vittengl, Junior High Volleyball Coach

V.

Adjournment

Code No. 704.2 SALE OF BONDS The board may conduct an election for the authority to issue bonded indebtedness. Revenues generated from an approved bond issue are used only for the purpose stated on the ballot. Once the purpose on the ballot is completed, any balance remaining in a capital projects fund may be retained for future capital projects in accordance with the purpose stated on the ballot or any remaining balance may be transferred by board resolution to the debt service fund or the physical plant and equipment levy fund. Voter approval is required to transfer monies to the general fund from the capital projects fund. Revenues received from the issuing of bonded indebtedness are deposited into the capital projects fund.

Legal Reference ! Approved 8/2/84

Iowa Code §§ 74-76; 278.1; 298; 298A (2007).

Reviewed 4/9/05

Revised 11/18/13

Code No. 704.2R1 POST-ISSUANCE COMPLIANCE REGULATION FOR TAX-EXEMPT OBLIGATIONS 1. Role of Compliance Coordinator/Board Treasurer The board treasurer shall: a) Be responsible for monitoring post-issuance compliance; b) Maintain a copy of the transcript of proceedings or minutes in connection with the issuance of any tax-exempt obligations and obtain records that are necessary to meet the requirements of this regulation; c) Consult with bond counsel, a rebate consultant, financial advisor, IRS publications and such other resources as are necessary to understand and meet the requirements of this regulation; d) Seek out training and education to be implemented upon the occurrence of new developments in the area and upon the hiring of new personnel to implement this regulation. 2. Financing Transcripts’ Filing and Retention The board treasurer shall confirm the proper filing of an IRS 8038 Series return and maintain a transcript of proceedings and minutes for all tax-exempt obligations issued by the school district including, but not limited to, all tax-exempt bonds, notes and lease-purchase contracts. Each transcript shall be maintained until 11 years after the tax-exempt obligation documents have been retired. The transcript shall include, at a minimum: a) b) c) d) e) f) g) h)

Form 8038; Minutes, resolutions and certificates; Certifications of issue price from the underwriter; Formal elections required by the IRS; Trustee statements; Records of refunded bonds, if applicable; Correspondence relating to bond financings; and Reports of any IRS examinations for bond financings.

3. Proper Use of Proceeds The board treasurer shall review the resolution authorizing issuance for each tax-exempt obligation issued by the school district and the school district shall: a) Obtain a computation of the yield on such issue from the school district's financial advisor; b) Create a separate Project Fund (with as many sub-funds as shall be necessary to allocate proceeds among the projects being funded by the issue) into which the proceeds of issue shall be deposited; c) Review all requisitions, draw schedules, draw requests, invoices and bills requesting payment from the Project Fund; Approved 5/6/15

Reviewed _____

Revised _____

Code No. 704.2R1 d) Determine whether payment from the Project Fund is appropriate and, if so, make payment from the Project Fund (and appropriate sub-fund, if applicable); e) Maintain records of the payment requests and corresponding records showing payment; f) Maintain records showing the earnings on, and investment of, the Project Fund; g) Ensure that all investments acquired with proceeds are purchased at fair market value; h) Identify bond proceeds or applicable debt service allocations that must be invested with a yield-restriction and monitor the investments of any yield-restricted funds to ensure that the yield on such investments do not exceed the yield to which such investments are restricted; i) Maintain records related to any investment contracts, credit enhancement transactions and the bidding of financial products related to the proceeds. 4. Timely Expenditure and Arbitrage/Rebate Compliance The board treasurer shall review the Tax-Exemption Certificate (or equivalent) for each taxexempt obligation issued by the school district and the expenditure records provided in Section 2 of this regulation, above and shall: a) Monitor and ensure that proceeds of each such issue are spent within the temporary period set forth in such certificate; b) Monitor and ensure that the proceeds are spent in accordance with one or more of the applicable exceptions to rebate as set forth in such certificate if the school district does not meet the "small issuer" exception for said obligation; c) Not less than 60 days prior to a required expenditure date, confer with bond counsel and a rebate consultant, if the school district will fail to meet the applicable temporary period or rebate exception expenditure requirements of the Tax-Exemption Certificate. In the event the school district fails to meet a temporary period or rebate exception: 1. Procure a timely computation of any rebate liability and, if rebate is due, file a Form 8038-T and arrange for payment of such rebate liability; 2. Arrange for timely computation and payment of yield reduction payments (as such term is defined in the Code and Treasury Regulations), if applicable. 5. Proper Use of Bond Financed Assets The board treasurer shall: a) Maintain appropriate records and a list of all bond financed assets. Such records shall include the actual amount of proceeds (including investment earnings) spent on each of the bond financed assets; b) Monitor and confer with bond counsel with respect to all proposed bond financed assets; 1. management contracts; 2. service agreements; 3. research contracts; 4. naming rights contracts; 5. leases or sub-leases; 6. joint venture, limited liability or partnership arrangements; Approved 5/6/15

Reviewed _____

Revised _____

Code No. 704.2R1 7. sale of property; or 8. any other change in use of such asset. c) Maintain a copy of the proposed agreement, contract, lease or arrangement, together with the response by bond counsel with respect to said proposal for at least three years after retirement of all tax-exempt obligations issued to fund all or any portion of bond financed assets; and d) Contact bond counsel and ensure timely remedial action under IRS Regulation Sections 1.141-12 in the event the school district takes an action with respect to a bond financed asset, which causes the private business tests or private loan financing test to be met. 6. General Project Records For each project financed with tax-exempt obligations, the board treasurer shall maintain, until three years after retirement of the tax-exempt obligations or obligations issued to refund those obligations, the following: a) b) c) d)

Appraisals, demand surveys or feasibility studies; Applications, approvals and other documentation of grants; Depreciation schedules; Contracts respecting the project.

7. Advance Refundings The board treasurer shall be responsible for the following current, post issuance and record retention procedures with respect to advance refunding bonds. The board treasurer shall: a) Identify and select bonds to be advance refunded with advice from internal financial personnel and a financial advisor; b) Identify, with advice from the financial advisor and bond counsel, any possible federal tax compliance issues prior to structuring any advance refunding; c) Review the structure with the input of the financial advisor and bond counsel, of advance refunding issues prior to the issuance to ensure; (1) that the proposed refunding is permitted pursuant to applicable federal tax requirements if there has been a prior refunding of the original bond issue; (2) that the proposed issuance complies with federal income tax requirements which might impose restrictions on the redemption date of the refunded bonds; (3) that the proposed issuance complies with federal income tax requirements which allow for the proceeds and replacement proceeds of an issue to be invested temporarily in higher yielding investments without causing the advance refunding bonds to become "arbitrage bonds"; and (4) that the proposed issuance will not result in the issuer's exploitation of the difference between tax exempt and taxable interest rates to obtain an financial advantage nor overburden the tax exempt market in a way that might be considered an abusive transaction for federal tax purposes; d) Collect and review data related to arbitrage yield restriction and rebate requirements for advance refunding bonds. To ensure such compliance, the board treasurer shall engage a Approved 5/6/15

Reviewed _____

Revised _____

Code No. 704.2R1

e)

f) g) h)

rebate consultant to prepare a verification report in connection with the advance refunding issuance. Said report shall ensure said requirements are satisfied; Whenever possible, purchase State and Local Government Series (SLGS) to size each advance refunding escrow. The financial advisor shall be included in the process of subscribing SLGS. To the extent SLGS are not available for purchase, the Board treasurer shall, in consultation with bond counsel and the financial advisor, comply with IRS regulations; Ensure, after input from bond counsel, compliance with any bidding requirements set forth by the IRS regulations to the extent as issuer elects to the purchase of a guaranteed investment contract; In determining the issue price for any advance refunding issuance, obtain and retain issue price certification by the purchasing underwriter at closing; After the issuance of an advance refunding issue, ensure timely identification of violations of any federal tax requirements and engage bond counsel in attempt to remediate same in accordance with IRS regulations.

8. Continuing Disclosure The board treasurer shall assure compliance with each continuing disclosure certificate and annually, per continuing disclosure agreements, file audited annual financial statements and other information required by each continuing disclosure agreement. The board treasurer will monitor material events as described in each continuing disclosure agreement and assure compliance with material event disclosure. Events to be reported shall be reported promptly, but in no event not later than 10 business days after the day of the occurrence of the event. Currently, such notice shall be given in the event of: a) b) c) d) e) f)

g) h) i) j) k) 1) m)

Principal and interest payment delinquencies; Non-payment related defaults, if material; Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements relating to the bonds reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices, or determinations with respect to the tax-exempt status of the bonds, or material events affecting the tax-exempt status of the bonds; Modifications to rights of Holders of the Bonds, if material; Bond calls (excluding sinking fund mandatory redemptions), if material and tender offers; Defeasances of the bonds; Release, substitution, or sale of property securing repayment of the bonds, if material; Rating changes on the bonds; Bankruptcy, insolvency, receivership or similar event of the Issuer; The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the

Approved 5/6/15

Reviewed _____

Revised _____

Code No. 704.2R1 termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and n) Appointment of a successor or additional trustee or the change of name of a trustee, if material.

Legal Reference:

Approved 5/6/15

Iowa Code §§ 257.31(4); 279.8; 297.22-.25; 298A (2013). http://www.irs.gov/taxexemptbond/article/0,,id=243503,00.html

Reviewed _____

Revised _____

AHlrn s,&..CooNEy, P.C. 100 Counr AVENUE, Surre 600 Drs MorruEs, lowA 50309-2231 Fnx. 515-243-2149 \¡AA/W. AH LE RS I-AW. CO M Direct 0ial,

Ronald L. Peeler [email protected]

51

5.24ó.0302

April23,2015

Rhonda Lange, Board Secretary Alburnett Community School District 131 Roosevelt Street. Alburnett, IA 52202 Re:

Alburnett Community School District Sales Tax Bonds, Series 2015

Dear Rhonda:

We are pleased to be working with you and the Alburnett Community School District with respect to the issuance of Sales Tax Bonds. The purpose of this letter is to disclose and memorialize the legal services that we will render in serving as Bond Counsel for the above-referenced financing. Our understanding is that the Bonds will be tax-exempt, revenue obligations of the Alburnett Community School District (the "District"). We understand you have engaged Piper Jaffray & Co. as your placement agent (the "Placement Agent).

I.

DESCRIPTION OF SERVICES

As Bond Counsel to the District, we will work with the District, including the officers and employees, the Placement Agent, and other parties to this transaction to provide the following services:

.

Review the proposed timetable and consult with the other parties to the transaction as I necessary in order to implement the financing in accordance with that timetable.

Review all relevant Iowa statutory and constitutional provisions, including all 2. pending legislation and any other recent developments, relating to the issuance of the Bonds.

3.

Obtain detailed information about the proposed Bond issue and review the nature of public and private ownership and the operation of the facilities financed with the Bond proceeds (the "Project").

4. Consider the issues arising under the Internal Revenue Code of 1986, as amended (the "Code"), and all applicable tax regulations relating to the issuance of the Bonds on a tax-exempt basis in view of the use of the Project and prepare all necessary tax compliance certificates. WISHÁRD

& BATLY. I888r

GUERNSEY

& BAILY - 1893: BAILY & STIPP. I9OI' STIPP.

PERRY, BANNISTER

&

STARZINGER

-.I9I4'

BANNÍSTER, CARPENTER.

ÀHLERS&CooNEy-1950'AHLERS.C00NEv.DoRwEtLER.ALLBEE.HayNTE&SMrrH-1974:AHLERS,CooNEy.DoRlvErLER.HayNrE,SMrrH&ALLBEE.P.C.-1990

Aprrl23,2015 Page2

5. Prepare or review the issuing resolution, the bond purchase agreement and draft descriptions of these documents as necessary. As Bond Counsel, upon request we will assist the District in reviewing only those sections of any official statement or any other disclosure document to be disseminated in connection with the sale of the Bonds which involve the description of the Bonds, the security for the Bonds and matters pertaining to tax exemption. 6. Prepare all pertinent proceedings to be considered by the District Board of Directors; conf,trm the necessary quorum, meeting and notice requirements, and draft pertinent excerpts of minutes of the meetings relating to the financing; and supervise the filing of all necessary federal reporting or state public notice requirements for issuing the Bonds. 7.

Prepare, revise as necessary, and coordinate the distribution and execution of necessary closing documents and certificates, opinions and document transcripts.

8.

Attend or host such drafting sessions and other conferences necessary to irnplement the financing, including the preclosing, if needed, and closing.

9.

Render our customary approving legal opinion regarding the validity of the Bonds, payment the sources of therefor and the federal income tax treatment of interest thereon (the "Bond

Opinion"), which opinion

will be delivered by us in written form on the date the

exchanged for their purchase price (the "Closing"). The Bond Opinion

will

Bonds are

be based on facts and law

existing as of its date. In rendering the Bond Opinion, we will rely upon the certified proceedings and other certifications of District officials and other persons furnished to us. We are not engaged and will not provide services intended to verify the truth or accuracy of these proceedings or certifications. We understand that you and other members of the District staff and other ernployees of and consultants to the District will cooperate with us in this regard. Please note that our opinion represents our legal judgment based upon our review of the law and the facts so supplied to us that we deem relevant and is not a guarantee of result. II.

LIMITATIONS

Our duties as Bond Counsel are limited to those expressly set forth above in this letter. Among other things, our duties do not include:

l.

Except as described in paragraph 5 above, assisting in the preparation or review of an statement or any other disclosure document with respect to the Bonds, or performing an

official

independent investigation to determine the accuracy, completeness or sufficiency of any such document or rendering any advice, view or comfort that the official statement or other disclosure document does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading; 2.

We have not been"engaged as, and should not be viewed as acting as, disclosure

counsel; a

J.

Preparing requests for tax rulings from the Internal Revenue Service;

Ãprr|23,2015 Page 3

4.

Preparing blue sky or investment surveys with respect to the Bonds;

5.

Drafting state legislative amendments;

6.

Pursuing test cases or other litigation;

7. Making an investigation or expressing any view as to the creditworthiness of the District or of the Bonds;

8. Opining on a continuing disclosure undertaking pertaining to the Bonds and, after the execution and delivery of the Bonds, providing advice concerning any actions necessary to assure compliance with any continuing disclosure requirements; 9. Responding Commission investigations;

to

Intemal Revenue Service audits

or

Securities and Exchange

10. After Closing, providing continuing advice to the District or any other party concerning any actions necessary to assure that interest paid on the Bonds will continue to be excluded from gross income for federal income tax purposes, e.g., we will not undeftake rebate calculations for the Bonds;

l.

1 Providing any advice, opinion or representation as to the financial feasibility or the prudence fiscal of issuing the Bonds, the financial condition of the District, or to any other aspect of the financing, such as the proposed financing structure, use of a financial advisor, or the investment ofproceeds ofthe Bonds; or

12.

Any other matter not specifically set forth above that is not required to render the

Bond Opinion. The Bond Opinion represents our legal judgment based upon our review of the law and the facts that we deem relevant to render such opinion. No assurance can be given as to whether or not the Internal Revenue Service will commence an audit of the Bonds, or as to whether the Internal Revenue Service would agree with the Bond Opinion. If an audit is commenced, the Internal Revenue Service will treat the District as the taxpayer, and the bondholders may have no right to participate in such procedure. As Bond Counsel we are neither obligated to defend the tax-exempt status of the Bonds nor responsible to pay or reimburse the costs of the District or the bondholders with respect to any audit or litigation relating to the Bonds,

III.

ATTORNEY-CLIENT RELATIONSH

I

P

Upon execution of this engagerrìent letterthe District willbe our client, and an attorney-client relationship will exist between us with respect to the issuance of the Bonds. However, our services as Bond Counsel are limited to those as set forth in this engagement letter, and the District's execution of this engagement letter will constitute an acknowledgment of those limitations. We will not act as an intermediary among the parties to the transaction.

April23,2075 Page 4

Our representation of the District and the attomey-client relationship created by this engagement letter will be concluded upon the issuance of the Bonds. Nevertheless, subsequent to the Closing, we will prepare and provide a transcript of proceedings pertaining to the Bonds and make certain that a Federal Information Reporting Form 8038-G is filed for the Bonds.

IV.

FEES

As is customary, we will bill our fees as Bond Counsel on a transactional basis instead of hourly. Disbursements are typically itemized and billed separately. Factors which affect our billing include: (a) our estimate of the risk involved in our writing our normal "unqualified" approving Bond Opinion (risk is related to the size, complexity and tax questions in the transaction); (b) an estimate of the time necessary to do the work; (c) the complexity of the issue (number of parties, timetable, type of financing and so forth); (d) a recognition that we carry the time for services rendered on our books until a f,rnancing is completed, rather than billing monthly or quarterly. Based on (i) our current understanding of the structure, size and schedule of the financing, (ii) the duties we would undertake pursuant to this letter, (iii) the time we anticipate devoting to the financing; and (iv) the responsibilities we assume, we estimate the fee for our legal services for this transaction will be $7,800 plus costs such as copying, overnight charges, bond printing, and other simitar costs. Generally, these expenses will not exceed $500. If at any time we believe that circumstances require an adjustment of our original fee estimates, we will consult with you. Such

adjustment might be necessary in the event (i) the principal amount of bonds issued differs significantly from the amount stated at the time we advise you of the fee, (ii) the manner in which the Bonds are marketed (private placement, public offering, etc.) changes, (iii) there are material changes in the structure, security or opinion from the description of the Bonds afterwe advise you or our fee, or (iv) unusual or unforeseen circumstances arise which require a signifìcant increase in the services rendered, such as personal attendance at meetings, significant travel, or unexpected revision of the issuance documents.

If for any reason the District terminates this engagement before closing or the Bonds are not issued, or if the Bonds are issued without the delivery of our Bond Opinion, we will bill you for the services rendered on your behalf up to that point. These services will be billed at the normal hourly rates for those attorneys and legal assistants who have performed such services. We will also bill you for all expenses we have incurred as outlined above. My current hourly rate is $275. Services performed by legal assistants will be billed at $100 per hour. Our firm can also provide services as Disclosure Counsel. In summary, Disclosure Counsel consults with the District concerning disclosure requirements, questions, and issues. If you request our services as Disclosure Counsel, these fees would be determined and quoted separately at the time

of issuance.

Our firm represents, and in the future will represent, other clients including cities, city utilities, counties, school districts, community colleges, area education agencies, the Iowa Public Agency Investment Trust, the lowa Schools Joint Investment Trust, the Iowa Association of Municipal Utilities, Missouri Basin Municipal Electric Cooperative Association, North Iowa Municipal Electric Cooperative Association, and the Iowa Association of School Business Officials.

Ãprrl 23,2015 Page

5

In addition, other clients of our fìrm may be involved in transactions or have contacts or involvement with the District. We do not believe our representation of these clients will adversely affect our ability to represent you as provided in this letter, either because such matters will be sufficiently different from the issuance of the Bonds by the District so as to make such representation not adverse to our representation of you, or because a potential for such adversity is remote or minor and outweighed by the consideration that it is unlikely that the advice given to other clients will be relevant to any aspect of the issuance of the Bonds.

By

approving

this letter, the District

consents

to the firm's continued and

future

representation of such other clients without the need for any further consents from the District when there is no direct conflict and where matters the firm is handling for either the District or other clients involve legislative or policy issues or administrative proceedings unrelated to the representation of the other client.

If the foregoing terms are acceptable to you, please so indicate by returning a copy of this letter signed by the Board President, retaining the original for your fìles. If you have any questions, please call. We appreciate the opportunity to work with you on this matter. Very truly yours,

AHlpns & C

Accepted and Approved this day of

,2015:

ALBURNETT COMMUNITY SCHOOL DISTRICT

By President of the Board of Directors

0l 105065-r\21 t72-000