July 2011


New IRS Questionnaire on Advance Refundings   

On May 24, the Internal Revenue Service (IRS) announced that it has initiated a new questionnaire for borrowers who have issued tax-exempt advance refunding bonds. The questionnaire is extensive (8 pages, with 22 multi-part questions).  

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Conferences: GFOA, LMC and EDAM 


Ehlers SealIf you weren't able to make any of these conferences, here's a quick recap of the National GFOA, LMC and EDAM conferences.

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The New Ortonville Area Hospital Replacement Project

By Carolyn Drude, Senior Financial Advisor and Brian Reilly, Financial Advisor


The City of Ortonville, MN held its opening ceremony for the new Ortonville Area Health Services (OAHS) on June 29, 2011.


The Ortonville Hospital Replacement Project is a $20 million facility owned by the City of Ortonville and run by the Ortonville Health Care Board.


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Wellness Challenge and Minnesota FoodShare

by Alicia Aulwes, Bond Sale Coordinator 


Ehlers employees recently participated in two events that benefited others as well as themselves.


Each March, Minnesota FoodShare directs the March Campaign, the largest food drive in the state and restocks 300 food shelves across Minnesota.


It recruits thousands of congregations, companies, schools and civic groups to run local food and fund drives to aid in the effort.


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Have You Bookmarked DemysTIFication? 


Readership continues to grow for our TIF blog: DemysTIFication: How Change Happens Incrementally. Be sure to bookmark our site so you can check in on what's new with TIF.


Have you read this week's posts? 




In this issue, there are two IRS-related articles to which I draw your attention. One article alerts you to a questionnaire that's gone out to a small group of government entities and other tax-exempt organizations, and the other article discusses being prepared for Federal examinations as it relates to Arbitrage.

Last year, we introduced you to changes in the municipal securities market with the introduction to the Dodd Frank Act. As more regulations are passed, we will continue to keep you informed. In this issue of the Advisor, we talk about changes to Section 15B of the Act. 

Finally, we look at a redevelopment project in the City of Maple Plain, and congratulations to the City of Ortonville, which recently opened the new Ortonville Area Health Services facility.

Steve Apfelbacher 

Steve Apfelbacher

President and CEO




Redevelopment in The City of Maple Plain

by Todd Hagen, Financial Advisor


Todd HagenIn the City of Maple Plain, Minnesota, Ehlers worked side-by-side with the redevelopment consultant Cornejo Consulting to provide a financial feasibility analysis on the redevelopment potential of three key sections of the City, referred to as the Gateway Redevelopment District, Downtown District, and Budd Avenue-Highway 12 District, paid for with a county grant.


The City of nearly 2,100 residents is the main commercial intersection for surrounding areas, and will soon be the first western stop on State Highway 12. Revitalization of the City's commercial and residential components is the top priority when seeking interest for new development opportunities.


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Arbitrage: Are You Prepared for Federal Examinations? 

by Gail Robertson, Senior Financial Specialist, Arbitrage


Gail Robertson

Interest received by bondholders is exempt from federal income tax only if the issuer complies with both the arbitrage rebate and yield restriction requirements of the Internal Revenue Code.


To comply, the issuer must either 1) remit profits from investing gross proceeds of the issue at a yield in excess of the bond yield to the Treasury every five years until the debt is no longer outstanding, or 2) satisfy exceptions to the rebate and yield restriction requirements.


The IRS routinely examines debt issuances to ascertain compliance with the arbitrage requirements. Federal agents initiate the examination by sending issuers Form 4564 which contains a series of information document requests. Issuers must submit a response to the IRS within 21 days of the date on the form.


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Possible Registration of EDA & HRA Board Members as Municipal Advisors

by Steve Apfelbacher, Senior Financial Advisor/President


Steve ApfelbacherThe Dodd Frank Act, passed by Congress in July 21, 2010, regulated all parties that meet the definition of a Municipal Advisor. 


In Section 15B of the Act, a Municipal Advisor is defined to mean a person "that provides advice to or on behalf of a municipal entity ...with respect to municipal financial products or the issuance of municipal securities including advice with the respect to the structure, timing, terms and other similar matters concerning such financial products or issues."  


Since October 1, 2010, municipal market participants who believed they fall under this definition have been registering with the Securities and Exchange Commission (SEC) under a temporary registration rule.


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