Key Highlights this Week!
- Finance Officers Cite Infrastructure and Pension Strain – report link inside
- Nebraska School Hit Again…Second IRS Market Segment Audit in Months
- Arizona Waste Facility Defaults on $110 Million Debt
- Will SEC provide Legal Guidance on MAs for Bank Loans? – full article
- Problems Mount for “Other” College Debt – full article WSJ
- Want FREE “Best Practices” CPE? Get 3 hours of dedicated Post Issuance Compliance training with CPE in November in Sunny AZ – registration details and link inside!
So…here goes…today’s Monday Muni Minutes!
Enjoy and have a great week! Deb
CURRENT EVENTS
Nevada School: $473.05 Million Advance Refunding Audit
While the kids are just settling down for another year of school, the Clark County School District in Nevada (home to Las Vegas) is 
gearing up…
Gearing up for their second IRS bond audit. This time, on nearly half a billion of their advance refunding bonds.
No recess time here…
In the EMMA Notice posted on September 22nd, which included the IRS Notice, it said the audit was part of the market segment project involving advance refundings.
Recall last week’s article regarding the IRS’s FY 2016 work plan?
One particular point that is worth noting is that the IRS has stated that it needs to test its hypothesis regarding where the greatest risk of non-compliance may be…
That means that frequent issuers may see more than one audit – like Clark County School – as they also disclosed the first audit of its 2006 bonds in May.
Ouch, I know what that feels like!
It is also important to note that within the advance refunding market segment, that there are several sub-segments. Again, the IRS is looking to identify areas or sub-areas where there is the greatest risk of non-compliance.
I am rooting for a smooth audit and an A+ “no change” passing grade for them.
[Editor’s Note: We’ll keep you posted on how this audit progresses. Advance refundings have special circumstances and requirements which need to be met.]
Arizona Waste Energy Defaults on $110 Million Debt
S&P has downgraded the bonds issued by the Phoenix Industrial Development Authority for their waste energy plant project to “D” rating after they missed their October 1st debt payment.
According to S&P analyst James Breeding, “Although as of Oct. 1, there were sufficient funds remaining in the debt service reserve 
fund to make the required payments on the 2013A bonds, there were insufficient funds to make the payment on the 2013B bonds,” he said. “It is our understanding that funds are being maintained to address litigation expenses.”
Pardon the pun…but this stinks.
Interestingly enough, bondholders OK’d another $8 million of debt in January to retrofit the plant to process the waste it was getting.
[Editor’s Note: Water, Wastewater and Alternative Energy Facilities seem to be wrought with challenges like these. It’s little wonder they appear to be under more scrutiny for audits.]
OUT & ABOUT
Conferences:
There are about 15 conferences and regional events for the last quarter of 2015…
You can go to this Bond Buyer link to review what’s coming up and register! 
Resources:
Download NABL’s “Crafting Disclosure Policies” Report
IRS Interim Guidance on BABs and Other Direct-Pay Bonds
IRS 39-Page Memo TE/GE-04-0715-0019
See the full article in the August 3rd Edition of the Muni Minutes!
Replay: Webinar: MCDC – What Comes Next for Muni Underwriters
By: DIVER by Lumesis and hosted by the Bond Buyer
IT was AWESOME! In case you missed it…
Here is the replay link and the slides.
Munivestor.com
Track, search, analyze and keep up on critical bond news – looking at it from the bondholder’s perspective.
On-Demand Post Issuance Compliance Training for Issuers
“Compliance Basics” – a FREE, 3-part video Compliance Framework training, plus the Monday Muni Minutes.
Just Released – with a valuable and amazingly cost-effective “team learning” option!
NEW In-Depth Training, PIC Essentials: The Audit-Proven Blueprint – covering The IDR – Form 4564, Project Accounting Boot Camp and our hot-button friend, PBU!
On-Demand Webinar
Resource: On Demand Replay of Continuing Disclosure after MCDC
Slides: Final Slide Deck for Continuing Disclosure after MCDC
Muni Market Minute Updates
(Quick news bits on topics we’ve covered in earlier MMM editions!)
A quick note: While my shoulder is recovering over the next three or four months, items of interest here will be shorter and, if allowable, links to the full article will be provided for more detailed information.
In case you missed last week’s Muni Minutes…here are links to 2 key articles…
Round 2 – $4.12 Million in MCDC Settlements for 22 Firms
Here is a special e-mail bulletin with the SEC press release regarding this Round 2 settlement, including the filings.
You can read 
that bulletin here.
You can read the full open Bond Buyer article here.
SEC Administrative Proceedings can be viewed here. Look for September 30, 2015 under Third Quarter and “Certain Municipal Securities Underwritings.”
IRS TEB: Half of FY ’16 Budget for Audits
Last week’s article confirms just what Nevada’s Clark School is facing with their second audit this year as part of the IRS market segment program…
Ouch!
You can catch last week’s Muni Minutes article on IRS TEB FY ’16 here. You can download the TE/GE Priorities for FY 2016 Report here.
New Problems Mount for “Other” College Debt
As we see more colleges and universities look to the bond market while rates remain low, investors are growing increasingly wary…
Spooked by sudden school closures, mergers and declining enrollments, many of the smaller schools are doing mediocre at best…getting a “C” from the bond market.
Their ratings and what they have to pay in the market are reflecting just that…
You can read the full open WSJ article here.
Will the SEC Provide Legal Guidance on MA Roles in Bank Loans??
On the heels of the MCDC and enforcement actions, much attention has shifted to the role municipal advisors play…
One key question: When is a muni advisor acting as a broker-dealer?
Bank loans are one key financing tool where this question may come into play…and the answer is critical in determining whether the SEC Act of 1934 and the MSRB Rules apply or not.
You can read the full open Bond Buyer article here.
City Finance Officers Cite Infrastructure, Pension and Healthcare Strain
The National League of Cities just released its 30th annual survey of fiscal conditions…and it is really worth reading!
There are four key quotes that bear close attention:
- “Underfunding maintenance has reached critical proportions.”
(nearly $3 trillion in infrastructure backlog) - “Although borrowing costs are quite low for most municipalities, the repayment schedule often means that debt repayment competes with basic operating needs of a city.”
- “City finance officers are more optimistic than ever, driven largely by an expansion of general fund revenues.”
(revenues have increased 1.3% in 2015, but have not recovered from 2008) - “Lack of investment, however, combined with constrained local revenues and cuts in state and federal aid are concerning for the state of infrastructure financing.”
You can read the full National League of Cities report here.
[Editor’s Note: We hope you enjoy these open article topics this week from the Bond Buyer – as well as one on college debt from the Wall Street Journal!]
We hope you enjoyed this week’s edition of the Muni Minutes!
Due to high demand, we created PIC Basics as a free subscriber resource and then PIC Essentials – The Audit-Proven Blueprint to provide practical, hands-on tools you can use.
Solving the Compliance Puzzle is GREAT for Your Bottom Line!
We have also spoken at local and regional seminars as well as conducted numerous virtual interactive conference sessions…with more to come!
Again, thanks to everyone who participated in the PIC Essentials: Next Steps Survey! We really appreciated your thoughtful comments and the obvious desire for practical compliance information you can use.
So, we have already started working on quarterly trainings to address your three biggest fears – and I am working with a couple of professionals who will likely join me in the sessions as well.
Given the recent news and the IRS’s focus for 2016, our next three trainings will be:
- Beefier “inside the issuer trenches” look at what you need to have in place BEFORE an IRS or SEC audit
- Succession planning – stopping the compliance “brain drain”
- Streamlining – including some cool policy and procedures tips!
Stay tuned for more information (and maybe a few more questions) in the next few weeks!
In the meantime…
Remember: Take small bites. For more information or other resources, check out our Knowledge Library. You can also ask a question 
in the comments section or reach out to us privately via e-mail and we’ll do our best to help.
You are welcome to download my nationally published AFP article, “A Taxing Dilemma.” In it, I share how we, as issuers, can systematically do a better job of understanding and managing our compliance programs. I think you will see strong similarities in what I experienced and what the IRS and SEC are focusing on…
Want FREE dedicated Post Issuance Compliance CPE?
If you or fellow issuer friends are going to be in the Phoenix, AZ area on November 16th, there will be a FREE 3 hour CPE-eligible post issuance compliance best practices training seminar – with a complimentary networking reception following the training! And yes, I will be one of the five expert guest panelists!
Here is the downloadable flyer and registration link!
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
We really do look forward to your feedback – and to provide the best content possible.
Have a GREAT week!
In closing, we are so excited that PIC Essentials: the Audit-Proven Blueprint is now available! A special welcome to members who joined us. We look forward to your comments, questions and chatting with you in the Private Facebook Group – Club PIC!
NOTE: You can still join the learning group here: PIC Essentials: the Audit-Proven Blueprint.
Plus, as we believe so strongly in the team approach to success, we are offering a tremendous “team discount,” where you and four additional compliance members within your agency or company can join the series right along with you…for only $70 more!
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
Chat soon!
As always, your comments are welcome…scroll down and let us know what you think about any of the articles!
To your compliance success,
Debbie
The greatest compliment you can pay us is to share this newsletter with your issuer friends….
P.S. Enjoy reading the Monday Muni Minutes each week? Invite your issuer friends to join us on Issuer 2 Issuer so they can get their free online training, PIC Basics! They will also get the Monday Muni Minutes delivered directly to their inbox as well as receive a special “new member” discount offer on the PIC Essentials training!
P.P.S. PIC Essentials: the Audit-Proven Blueprint is now available! You can sign up for the informative, on-demand webinar series by clicking above! Read about the “Team Discount” above! It’s truly a great deal.
P.P.S. Want a one-click way to get faster information? If you are on LinkedIn, you can get access to breaking muni news articles as well as interesting compliance tips and resources, posted by us during the week. Join our private LinkedIn Group Page, and follow us on our Company Page.