As I have been traveling and am compiling today’s edition of the Muni Minutes remotely, this week will be a slightly shorter edition – shorter in words, but still packed with great news and compliance information for you!
Enjoy and have a great week! Deb
CURRENT EVENTS
Want to Help? IRS & Treasury Plan FY16 Focus…
The IRS and Treasury Departments are asking for your help in shaping their FY16 work priorities…and 
some of the ones still on their “to-do” list impact tax-exempt bonds.
Why help?
The agencies use this plan “to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other published administrative guidance”.
Four items still on the list impacting munis include:
- 1) Arbitrage investment restrictions (particularly around issue price)
- 2) Defining what is (or is not) a political subdivision (think Village Center Community Development District in Florida)
- 3) Updating guidance on Management Contracts and PBU
- 4) Finalizing Regs on PABs – accounting, allocations and public approval
If you have a suggestion, The Service will be looking at recommendations under these six criteria:
- Resolves major issues relevant to many taxpayers.
- Promotes “sound tax administration,”
- Is easily understandable for taxpayers to apply it
- “Involves regulations that are outmoded, ineffective, insufficient, or excessively burdensome and that should be modified, streamlined, expanded, or repealed,”
- IRS could administer the recommended guidance uniformly
- Reduces controversy/lessens the burden on taxpayers or the IRS
Your suggestions can be submitted by mail, courier or via the Federal e-Rulemaking Portal, but must be received by May 1st.
[Editor’s Note: In this Bond Buyer article, we see that Municipal Bonds are still a big focus, both from the current year’s list as well as going forward. I encourage you to submit your suggestions.]
Two Issuers in Colorado and Nevada Facing IRS Audits
Based on event notices filed on EMMA, The Regional Transportation District (RTD) in Colorado is being 
audited on its 2006A, $600 million in revenue bonds, while The Vegas Valley Water District (VWD) in Nevada is facing a similar fate for its 2006As, $151.56 million in GO Bonds.
While both audits are listed as routine, here is an interesting tidbit…
It is interesting to note that both audits are listed as part of the IRS’s market segment approach – where they are testing, in the case of RTD, transportation bonds, and for VWD, environmental bonds. As we are keenly aware, the market segment approach is what the IRS uses to focus on specific bond or industry types, so they can gauge where there may be areas of significant non-compliance.
[Editor’s Note: As I have worked extensively on water/wastewater as well as environmental enhancement project bonds, I know these can be tricky. Transportation is another fun one, where we have seen issues arise here on the West Coast. What are your experiences?]
OUT & ABOUT
Resources:
There are some really neat tools on this site. There are also some informative articles you can read…
On-Demand Post Issuance Compliance Training for Issuers 
“Compliance Basics” – a Free, 3-part video training, plus the Monday Muni Minutes
On-Demand Webinar
Resource: On Demand Replay of Continuing Disclosure after MCDC
Slides: Final Slide Deck for Continuing Disclosure after MCDC
A Couple of Muni Market Minute Updates
(Quick news bits on topics we covered in earlier MMM editions!)
University of Oregon to Sell Its First Bonds
Since the U of O, OSU and Portland State University, separated from the State Board of Higher 
Education via legislation approved in July of 2014, they can issue their own bonds rather than rely on the State’s timing.
As such, the University of Oregon (home of the Ducks) priced $50 million of bonds last week, their first issuance under their own governing authority. The bonds are expected to finance a variety of capital projects, including $8 million for a new central kitchen and extensive renovation to the Student Union Building.
The University, with 24,000 students, is also spearheading a robust $2 billion fundraising campaign and does not anticipate issuing further bonds this year.
Editor Note: Having worked in Oregon for over 7 years, I understand the challenges of passing your budgets and funding needs via the legislative process and how financings are coordinated with several other agencies – impacting the timing of your operations. There are several related Bond Buyer articles on the separation of the Oregon University System or OUS.
Highway Trust Fund – Getting Another Funding Patch?
Rep Bill Shuster, R-PA, and chairman of the House Transportation & Infrastructure Committee, 
indicated that another temporary funding patch (the 33rd such patch in the last six years) will be needed by May 31st – before the current $11 billion allocation expires. If funding expires, the DOT said that reimbursements to states will need to be delayed – and can come as early as June 1st.
There will be barrels out…but will there be any workers?
Currently the HTF has a $13 billion per year shortfall between gasoline taxes collected and funds dispersed. Fitch Ratings endorsed the American Road & Transportation Builders Association’s proposal of a 15-cent per gallon gas tax hike.
However, Shuster disagreed as follows:
“I think pretty much everybody in this town has come to the conclusion that repatriation is where the dollars are,” Shuster said. “There’s no willingness, there’s no will in this Congress or in the administration to do anything with adjusting user fees or taxes.”
I guess we shall see…stay tuned!
Editor Note: Although the HTF will likely be funded “through construction season”, this does not provide any significant sense of clarity on what the long-term fix to our crumbling infrastructure will be. I would love to hear your comments on this.]
Editor Commentary: An Amazingly Simple and Brilliant Solution to a Long-Term Dilemma…
Don’t you just hate it when you are looking for an answer to a puzzling dilemma or problem and the right solution just seems to escape you?
Me too…
Well this week, while working with a client on the East Coast and visiting our daughters, I stumbled onto something that absolutely amazed me…both in its far-reaching potential as well as its simple brilliance.
And then it got me thinking – why won’t this framework work for other “big, hairy” dilemmas we are facing?
Well, hello there, what a concept – take something that works and use it!
But first, let me set the stage:
We were in Charlotte, NC – a beautiful, friendly city, bustling with activity…lots of buildings going up, commercial expansion and a steady population increase.
It made me feel great to see such positive growth indicators – but…all that glitters is not gold.
I also had the pleasure of attending a presentation hosted by the Foundation for the Carolinas for one of their newest, dynamic programs – called Leading on Opportunity: Our Next Challenge.
Leading on Opportunity is about addressing a systemic issue in the Charlotte –Mecklenburg area with a decades-long history…and even greater cost – to the local economy and culture.
That issue is poverty and upward mobility…or the lack thereof.
Not so golden…is it? But read on…
The Foundation moderated a panel forum of nationally recognized economists, urban and social policy Fellows as well as local officials who are committed to taking this challenge head-on.
In a refreshing, very frank and yes, at times, lively discussion, the audience of local leaders saw (and 
heard) rock-solid data on the severity of their problem, as well as discussion with the panel on what kinds of solutions could be implemented.
Over and over again, the one common point that everyone kept coming back to was this:
In order to change the face of poverty and make Charlotte the “land of opportunity” for its citizens, we have to change, at the local community level, the factors impacting poverty –Segregation, Income Inequality, Quality of Schools, Social Capital and Family Structure. We also cannot expect, nor should we wait for someone else, like the state or federal government, to fix it for us.
Please read that again…and note the emphasis on WE.
I know what you are thinking….so, Debbie, just what does a discussion on poverty and upward mobility have to do with post issuance bond compliance or any of the regulatory issues you have shared in previous Muni Minutes editions?
Actually…quite a bit.
As we all know, the compliance obligations you and I face regarding our tax-exempt bonds have existed for decades – much like the conditions impacting poverty that “Leading on Opportunity” is embracing.
More recently, the IRS and SEC’s regulatory scrutiny has really ratcheted up our awareness of where we truly stand in regard to the health of our bond compliance programs…good, bad or sideways – right?
That was the exact same feeling I got listening to Charlotte’s local community leaders, when they shared 
that they had come in 50 out of 50 – yes, dead last – for being the nation’s worst big city for climbing out of poverty.
One by one, each leader had faced the reality of “what my hometown’s true economic and social condition really is”…and that “it” (their citizens being in poverty) was NOT going to go away on its own, nor could they could rely on “someone else” to take care of the problem for them. They also were not about to choose the most risky option, which is bury their head in the sand and continue to ignore “it” until it exploded into a crisis.
So what did they do?
I sat there watching these leaders accept the reality of the situation and then link arms to…well, to say it simply – just flat do something about it.
It was amazing…simple…and brilliant.
They assessed their situation, developed a vision, are setting up a task force of interested and 
knowledgeable stakeholder (sound familiar?), and will be identifying deliverables and action steps to end poverty in their hometown.
And, this is NOT an easy or quick fix. It will take years.
However, the commitment in the room was so tangible I could feel it. I wanted to get up and help too…and I had only been there for two days!
Then it hit me…
Even for big, gnarly, sometimes decades-old dilemmas…the best solution is for each of us to take ownership of the problem and take positive forward steps to make improvements the reality.
Whether it’s your bond compliance program, underfunded pension issues, the Highway Trust Fund deficit or ongoing financial woes at the state and local level…this same “I own it and I will help fix it” attitude is the amazingly brilliant solution we have been waiting for…
...and it is sitting right under our noses.
Thank you Foundation for the Carolinas for allowing me to attend “Leading on Opportunity – the Next Challenge” and for opening up my eyes to simply and effectively resolving vital issues in such an unexpectedly delightful way.
I’d love to hear your thoughts…
In closing,
PIC Essentials – the 10-Step Compliance Framework will soon be available as an evergreen, on-demand video series program. Regis is hard at work on that and it should be ready for registration by the end of the month. Stay tuned!
I even had the pleasure of making another intro video – yeah! I AM getting better at it…slowly!
We truly believe these issuer-focused, relevant and (hopefully) somewhat fun virtual trainings will help you improve your post issuance compliance programs – in a cost and time effective way.
After all, time is money, right?
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
As always, your comments are welcome…
To your compliance success,
Debbie
The greatest compliment you can pay us is to share this newsletter with your issuer friends….
P.S. Remember, invite your issuer friends to join us here on Issuer 2 Issuer and to get their free online training, PIC Basics!
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 Group Page, and follow us on our Company Page.
If you want to learn more about Leading on Opportunity – click here.