this Issue, there is a timely article about changes made to levy
limits by the recently enacted State Budget. We also take a look at
the Village of Shorewood to see how they gained results from a TIF
there is an IRS-related article which alerts you to a questionnaire
that's gone out to a small group of government entities and other
last year, we introduced you to changes in the municipal securities
market with an 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 Municipal
Securities Rulemaking Board Rule G-23 that further defines the
distinction between an underwriter and a financial advisor.
Many times communities use Tax Increment Financing
(TIF) as a tool to redevelop property as part of an Economic
The Village of Shorewood used TIF, including a
thorough developer pro forma review, and Midwestern Disaster Area
Bonds (MDABs) to address challenges related to a redevelopment
Limits Have Changed...Again
The biennial State budget that took effect July 1,
2011 includes several changes to levy limits.
Since levy limits were first introduced a sunset
provision resulted in the expiration of levy limits every two
The provision that would sunset levy limits after
the 2012/(13) levy has been removed, making levy limits permanent.
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Advisors to be Prohibited from Switching Roles
Bond underwriter firms buy and sell municipal
bonds. Some bond underwriter firms also act as financial
advisors to municipal issuers.
While serving as the municipality's trusted advisor
for a debt issue, the bond underwriter firm can, currently, resign
in the middle of the debt issue process, to buy the municipality's
This role switching, first being hired by the
municipality as their financial advisor and then switching roles to
buy the bonds on the same debt issuance, has been allowed under
Rule G-23 by the Municipal Securities Rulemaking Board (MSRB) and
Securities Exchange Commission (SEC). The ability of
bond underwriters to switch roles has been subject to much debate
for a number of years.
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