BEST PRACTICES IN DEBT MANAGEMENT

Transcription

1 Piper Jaffray & Co. Todd Goffoy BEST PRACTICES IN DEBT MANAGEMENT Michelle Bock Jack Dillingham Gilmore & Bell, P.C. Jason Terry Erick Creach Meghan McKernan May 13, 2015

2 TOPICS OF PRESENTATION Bond Basics and GFOA Best Practices Legal Considerations and Recent Developments Market Trends Economic Development Tools Post-Issuance Compliance 2

3 REASONS FOR ISSUANCE OF BONDS Long-Term Debt: New Construction, Improvements or Equipment Acquisitions Refunding Existing Bonds - Only 1 advance refunding - No limit on current refundings Short-Term Debt: Provide working capital to fund temporary cash shortfalls Grant Anticipation Notes / Bond Anticipation Notes 3

4 BOND/FINANCING TYPES General Obligation Bonds (GO Bonds) Lease/Purchase Financing Utility Revenue Bonds Sales Tax Revenue Bonds Various Economic Development Bonds 4

5 GENERAL OBLIGATION BONDS Supported by the Issuer s general taxing power (full faith and credit) Debt service levy is generally established Lowest interest rates 4/7ths or 2/3rds majority approval Constitutional Debt Limit (10% general purpose + 10% street / sewer / utilities) Maximum amortization period of 20 years 5

6 ANNUAL APPROPRATION FINANCINGS Leasehold Revenue Bonds or Certificates of Participation (COP s) Financed property serves as collateral Subject to annual appropriation Voter Approval not required Borrowing costs higher than other forms of financing Some municipalities may use Special Obligation Bonds No legal limit on maturity 6

7 UTILITY REVENUE BONDS Generally issued for water, sewer or electric systems Debt Service supported only by revenues generated by the system Rate increases may be necessary Simple majority voter approval Various Bond Covenants apply Up to 30 year amortization period Missouri State Revolving Fund Program 7

8 SALES TAX REVENUE BONDS Used for various capital improvements Repaid from a pledged sales tax revenue stream Voter approval requirements same as General Obligation Bonds Various Bond Covenants apply Higher interest costs vs. GO Bonds Seldom used 8

9 NEIGHBORHOOD IMPROVEMENT DISTRICT (NID) BONDS NID normally established by petition Improvement paid by benefiting property owners Supported first by special assessments and second from other available City revenues Considered a limited tax general obligation 9

10 DOCUMENTATION Bond Ordinance / Resolution Escrow Agreement (if advance refunding) IRS Form 8038 Continuing Disclosure Agreement Preliminary and Final Official Statements Legal Opinions Lease Transactions include additional documents such as: Trust Indenture Lease Agreement Site Lease 10

11 TYPES OF BOND SALES Two Methods of Public Offering: Negotiated and Competitive Direct/Private Placements becoming more prevalent Nationally about 80% Negotiated Missouri is Slightly Higher at Approximately 90% 11

12 NEGOTIATED SALE Advantages Ability to easily adjust the bond structure (coupons, amortization, optional call) Flexibility on timing of the bond sale Incentive for the underwriter to engage in extensive pre-sale marketing activities Ability to make bonds available to local investors 12

13 NEGOTIATED SALE Disadvantages Lack of Transparency / Perception that the sale was not an open or fair process Most issuers do not have a high level of expertise with the financial markets Level of Negotiation is difficult to measure 13

14 DIRECT/PRIVATE PLACEMENT Type of Negotiated Sale Bank or Financial Institution Purchases directly from Issuer May have less documentation and lower issuance costs Important to have Financial Advisor or Placement Agent to help understand whether it is a better option than traditional public offering. Typically shorter term maturity Read fine print 14

15 COMPETITIVE SALE Advantages Provides assurance of the lowest interest cost among bidders at a point in time Underwriters compete to submit the lowest borrowing cost Transparent Process 15

16 COMPETITIVE SALE Disadvantages Less flexibility to make structural changes Little, if any, timing flexibility (sale usually on day of scheduled board meeting) Depending on market conditions, underwriters may include a risk premium Cannot target local investors No assurance as to the number of bids to be received 16

17 SECURITIES AND EXCHANGE COMMISSION MUNICIPAL ADVISOR RULE SEC rule effective July 1, 2014 Rule is 777 pages Seeks to regulate municipal (financial) advisors and differentiate their duties as compared to underwriters. Will limit the types of advice an underwriter may provide to an issuer. 17

18 MUNICIPAL ADVISOR RULE Underwriters are prohibited from providing certain types of advice unless they meet one of three exceptions: MA Exception Underwriter Exception RFP Exception 18

19 MUNICIPAL ADVISOR EXCEPTION If an issuer has engaged an MA, underwriters may provide unrestricted advice because it is assumed that the issuer will rely on the MA, as their fiduciary. Provides the most flexibility and maximum protection of issuer s best interest 19

20 UNDERWRITER EXCEPTION Allows underwriter to provide most types of advice as long as issuer signs a non-binding agreement with the underwriter Still limits advice (to be described) 20

21 RFP EXCEPTION Underwriters may provide advice in the form of a response to a formal RFP (as defined by the MA Rule) Still some exceptions 21

22 ADVICE RESTRICTIONS FOR UNDERWRITERS Unless operating under the MA exceptions, underwriters may not provide the following advice: Whether to approve a debt issuance Bond election strategy Debt capacity analysis (not related to current issue) Overall rating advice Method of sale Investment of bond proceeds Post-issuance advice 22

23 GFOA BEST PRACTICES Accounting & Financial Reporting Budgeting & Financial Planning CIP / Economic Development Debt Management Financial Management Pension & Benefit Administration Technology Treasury Management 23

24 GFOA DEBT MANAGEMENT BEST PRACTICES Use of Advisors Financing Instruments and Techniques Disclosure Debt Management/Post Issue Compliance Debt Issuance 24

25 SUMMARY OF CONDITIONS FAVORING EACH METHOD OF SALE Debt Structure Pledged Revenues Security Structure (for Revenue Bonds) Debt Instrument Credit Quality Rating Outlook Issuer Characteristics Type of Organization Frequency of issuance Market Awareness Investor Comfort Market Conditions Interest Rates Supply and Demand Policy Considerations Participation in Sale of Bonds Stimulation of Investor Interest Conditions Favoring a Competitive Sale General Obligation or Strong System Revenue Conventional Resolution and Cash Flow; Rate Covenant and Coverage Traditional Serial and Term, Full Coupon Bonds A or better Stable Broad-Based General Purpose Borrower Regular Borrower in Public Market Active Secondary Market with Broad Investor Base Well-known, Stable Issuer Stable; Predictable Market Strong Investor Demand, Good Liquidity, Light Forward Calendar Broad Market Participation Desired for Sale of Bonds Broad Market Participation Desired for Purchase of Bonds Conditions Favoring a Negotiated Sale Project Supported Revenue Unusual or Weak Covenants; Subordinated Debt Use of Innovative Structuring, Derivative Products, Structure to Attract Particular Investors (e.g. Discount Bonds), etc. Below Single A Weak but Improving, or Under Stress Special Purpose, Independent Authority New or Infrequent Issuer Little or Not Institutional Awareness of Issuer; Historical Antipathy Issuer Experiencing Significant Financial, Legal or Other Problems Volatile or Declining Market Oversold Market, Heavy Supply Desire to Direct Business to MBE or Local/Regional Firms Desire to Direct Business to Local/Regional Investors 25

26 GFOA RECOMMENDATIONS Method of sale: Choose based on careful analysis of rating, security, structure If issuer does not have dedicated debt manager, use a municipal advisor to assist. 26

27 GFOA RECOMMENDATIONS Competitive sale may be best when: Rating is at least A category Security is G.O. or known and secure stream of revenue Plain Vanilla Issuer is known and frequent issuer 27

28 GFOA RECOMMENDATIONS Negotiated sale may be best when: Rating lower than A Structure has complicated features (CABs, variable rate ) Issuer wants to target local retail or local institutions 28

29 GFOA RECOMMENDATIONS If negotiated sale is selected, consider: Contract with MA to advise on selection of underwriter, structure, disclosure and bond pricing. Select underwriter through RFP process that identifies selection criteria 29

30 GFOA RECOMMENDATIONS Utilize MA unless issuer has: Access to real-time market info Experience in pricing bonds including historical pricing date and comparable bonds Dedicated staff that can manage the bond issuance process including negotiating pricing of bonds 30

31 GFOA RECOMMENDATIONS Remain actively involved in each step of negotiation Require that financial professionals make all required disclosures Review the bond purchase agreement Prepare post-sale summary 31

32 FACT OR MYTH? Q: An underwriter is a fiduciary of an issuer. 32

33 FACT OR MYTH? A: Myth. An underwriter, who sells an issuer s debt to investors, must balance its relationship with an issuer (goal: low rates) and investors (goal: higher rates). However, this does not mean underwriters are bad guys and not to be trusted. There are simply inherent conflicts associated with representing both an issuer and an investor, as disclosed in the underwriter s G-17 letter. 33

34 FACT OR MYTH? Q: A financial (or municipal) advisor equates to higher cost. 34

35 FACT OR MYTH? A: Myth. Using the services of a qualified FA should result in a lower all-in cost. While there is an up-front fee for their services, by serving as an issuer s fiduciary, they should negotiate lower professional fees and lower interest rates. 35

36 FACT OR MYTH? Q: A fiduciary is bound by a legal relationship of trust to its clients. 36

37 FACT OR MYTH? A: Fact. A fiduciary legally must always provide advice and recommendations which serve their clients best interests, even if that means recommending against a financing entirely. 37

38 FACT OR MYTH? Q: Competitive sales are more cost-effective than negotiated sales. 38

39 FACT OR MYTH? A: Myth. There have been numerous studies completed over the last 20 years that have not been able to conclude one sale method is more/less expensive than another. Bottom line: One size does not fit all. You should know your options and make an informed decision. 39

40 Legal Considerations and Recent Developments 40

41 RECENT DEVELOPMENTS Refunding of BABS and other Tax Credit Bonds Sequestration Refunding can result in reissuance of debt Only claim subsidy through date of refunding Use of crossover refunding to delay defeasance of bonds 41

42 RECENT DEVELOPMENTS Management Agreements Rules have been liberalized Payments can be based on levels of performance achieved 42

43 RECENT DEVELOPMENTS SLGS Suspension Costs of bidding open market securities may have greater impact on smaller issuers Tax issues associated with gross defeasances and advance refundings 43

44 RECENT DEVELOPMENTS GASB Changes for Pension Reporting Must include net pension liability on balance sheet Issuers will be required to report their proportionate share of net pension liability 44

45 RECENT DEVELOPMENTS Missouri Accountability Portal (MAP) RSMo Intended to Increase Government Transparency Requires certain information regarding bond issues Par Amount Description of Revenue Stream 45

46 RECENT DEVELOPMENTS MCDC Fallout Timing of SEC action on voluntary filings Disclosure of prior noncompliance in new offering documents Procedures should be adopted and followed Actively participate in disclosure process 46

47 RECENT DEVELOPMENTS SEC Enforcement Actions State of Kansas City of Harvey, Illinois City of Allen Park, Michigan 47

48 RECENT DEVELOPMENTS YOU RE GOING TO JAIL 48

49 LEGAL CONSIDERATIONS IRS Audits Tax-Exempt Bonds Office (TEB) created in Now has over 100 agents. In 2010, IRS conducted 900 audits Compliance Questionnaire Audit 49

50 LEGAL CONSIDERATIONS YOU RE GOING TO JAIL 50

51 LEGAL CONSIDERATIONS YOU WILL LOSE YOUR HOUSE 51

52 MARKET TRENDS 52

53 TRENDS TO BE COVERED Interest Rates Access to the Capital Markets Use of Financial Advisors Recent Events in the Media 53

54 INTEREST RATES Bond Buyer 20 G.O. Bond Index (1987 to Present) Percentage of Time Above the Current Rate: 96% Percentage of Time Below the Current Rate: 4% Bond Buyer GO Yield (%) Jan-87 2-Jan-88 2-Jan-89 2-Jan-90 2-Jan-91 2-Jan-92 2-Jan-93 2-Jan-94 2-Jan-95 2-Jan-96 2-Jan-97 2-Jan-98 2-Jan-99 2-Jan-00 2-Jan-01 2-Jan-02 2-Jan-03 2-Jan-04 2-Jan-05 2-Jan-06 2-Jan-07 2-Jan-08 2-Jan-09 2-Jan-10 2-Jan-11 2-Jan-12 2-Jan-13 2-Jan-14 2-Jan-15 Average: 5.39% May 8, 2015 Rate: 3.74% 54 Date

55 INTEREST RATES 5.25 Bond Buyer 20 G.O. Bond Index (January 2013 to Present) Yield (%) Jan - 13 Feb - 13 Mar - 13 Apr - 13 May - 13 Jun - 13 Jul - 13 Aug - 13 Sep - 13 Oct - 13 Nov - 13 Dec - 13 Jan - 14 Feb - 14 Mar - 14 Apr - 14 Date May - 14 Jun - 14 Jul - 14 Aug - 14 Sep - 14 Oct - 14 Nov - 14 Dec - 14 Jan - 15 Feb - 15 Mar - 15 Apr - 15 May

56 MMD RATES Municipal Market Data Trend Analysis January May /02/13 04/02/13 07/02/13 10/02/13 01/02/14 04/02/14 07/02/14 10/02/14 01/02/15 04/02/15 Source: Municipal Market Data 5 Year Maturity 10 Year Maturity 20 Year Maturity 56

57 MMD RATES 80.00% 5 Year MMD - % of times rates were higher than current levels ( Present) % 10 Year MMD - % of times rates were higher than current levels ( Present) 60.00% 59.69% 80.00% 76.72% 42.43% 60.00% 59.88% 40.00% 38.84% 40.00% 41.47% 20.00% 20.00% 0.00% Current Current + 50 bps Current bps 0.00% Current Current + 50 bps Current bps 57

58 MMD RATES 15 Year MMD - % of times rates were higher than current levels ( Present) 20 Year MMD - % of times rates were higher than current levels ( Present) % % 80.00% 78.11% 80.00% 79.92% 69.81% 64.90% 60.00% 60.00% 46.02% 47.57% 40.00% 40.00% 20.00% 20.00% 0.00% Current Current + 50 bps Current bps 0.00% Current Current + 50 bps Current bps 58

59 ACCESS TO CAPITAL Who are the bond investors? 59

60 ACCESS TO CAPITAL METHOD OF SALE 60

61 ACCESS TO CAPITAL Solid Demand both Underwriters and Investors Importance of Continuing Disclosure Due Diligence Rating Agency Scrutiny 61

62 USE OF FINANCIAL ADVISORS GFOA Best Practice Transparency Securities & Exchange Commission MA Rule Recognition of Value for the Fiduciary role 62

63 USE OF FINANCIAL ADVISORS IN MISSOURI 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% By number of issues By par amount 63

64 RECENT EVENTS IN MEDIA Financial Transparency Negative Interest Rates Allen Park, Michigan Officials Barred 64

65 The Basics of Economic Development 65

66 ECONOMIC INCENTIVE BASICS Main categories of economic development tools Tax redirection Tax addition Tax abatement 66

67 TAX INCREMENT FINANCING (TIF) The basics Blight, conservation area or economic development area But-for Test The base and the increment 67

68 THE BASE AND THE INCREMENT Increment Before TIF During TIF - Total Assessed Value After Development - $100,000 - Total Levy - $5.00/$100 of Assessed Value - Total Revenue - $5,000 - Total Increment - $4,950 (PILOT S) $4,950 Increment (PILOT S) Amount Changes Based on Valuation Base - Property Assessed Value - $1,000 - Total Levy - $5.00/$100 of Assessed Value - Total Tax Revenue - $50 $50 Base (received by taxing districts) $50 Base (received by taxing districts) Amount Remains Constant 68

69 THE BASE AND THE INCREMENT Before TIF During TIF Increment - Additional EATS generated from economic activities in the redevelopment area - $100,000 $50,000 Increment captured by TIF $50,000 Increment collected by taxing districts Amount Changes Based on EATS Generated Base - EATS collected prior to TIF - $1,000 $1,000 Base (received by taxing districts) $1,000 Base (received by taxing districts) Amount Remains Constant 69

70 CREATING A TIF DISTRICT Form TIF Commission Prepare Redevelopment Plan and Cost-Benefit Analysis Hold TIF Commission proceedings City Council considers approving TIF City and Developer negotiate Redevelopment Agreement 70

71 SALES TAX REBATE AGREEMENTS Alternative to TIF ( TIF Lite ) Reimburse costs of public improvements Repayment limited to certain incremental sales tax revenues Only uses a contract; No plan or other formalities 71

72 CID/TDD COMPARISON CID s Separate Political Subdivision or Non-Profit Corporation and Board of Directors Bonds are not obligations of City/County Enjoy a broad range of powers (more if blighted area exists) Board is elected or appointed by entity forming Project must be inside District Sales Tax, Property Tax, Special Assessments available TDD s Separate Political Subdivision and Board of Directors Bonds are not obligations of City/County May fund transportation improvements only Board is elected by property owners or registered voters Project need not be inside District Sales Tax, Property Tax, Special Assessments available 72

73 COMBINING INCENTIVES: TAX REDIRECTION AND TAX ADDITION Advantages Additional revenues TDD/CID Overlay TIF District Eases burden on existing taxing districts Captured portion not limited to TDD or CID purposes Often used in retail developments 73

74 NEIGHBORHOOD IMPROVEMENT DISTRICTS Formation Special assessment Financing of improvements 74

75 NID DIAGRAM NID Property City/County Bondowners NID Public Improvements 75

76 EXAMPLES OF RECENT ISSUES Chesterfield Valley TDD (rated issue) City of Liberty (non-rated private placement) 76

77 QUESTIONS TO PONDER Will the incentive requested be enough? Is the project worthwhile? Is the level of incentive appropriate? What happens if it all goes bad? 77

78 ECONOMIC DEVELOPMENT Chapter 100 Tax Abatement Issues bonds as tax-exempt as a possible method of financing a project. Exempt from state income tax if exempt from federal income tax. More frequently issued to effectuate property tax abatement. Types of Projects: warehouses, distribution facilities, research and development facilities, office industries, agricultural processing industries, services facilities which provide interstate commerce, industrial plants and commercial facilities. In connection with such projects, the bond proceeds may be used to finance land, buildings, fixtures and machinery. Issuer has no liability to repay the Bonds special obligations of the issuer payable from the rents/revenues/receipts from the Project and the Lease. Unless voted as such, they are not general obligations of the issuer. 78

79 CHAPTER 100 DIAGRAM Bond Proceeds Lease Indenture Company Deed Lease Payments City/County Lease Payments Bond Trustee Mortgage Loan Proceeds Construction Loan Proceeds Fund Purchase of Bonds Bond Proceeds Bond Payments Construction Lender Bondholder/Company 79

80 ECONOMIC DEVELOPMENT Chapter 100: Structure Deed to municipality all property of a political subdivision is exempt from property tax. Lease back to Company Trust Indenture Plan of Industrial Development and Cost/Benefit Analysis Notice to taxing jurisdictions 80

81 ECONOMIC DEVELOPMENT Chapter 100 other considerations PILOTs Sales Tax Exemption Involve County Assessor Chapter 353 Tax Abatement Blighted area requires blight finding and redevelopment plan No personal property tax abatement Amount of tax abatement is dictated by statute, unlike Ch

82 POST-ISSUANCE COMPLIANCE

83 GOALS FOR TODAY Identify Post-Issuance Compliance; How to prove compliance; Your role in compliance; And. 83

84 84

85 WHO ARE THE REGULATORS? Municipal Securities Rulemaking Board (MSRB) Regulate Municipal Finance Industry Securities Exchange Commission (SEC) Advocate for Bondholders; indirectly regulate Issuers Internal Revenue Service (IRS) Regulate Issuers 85

86 WHAT ARE THE REGULATORS ASKING? Are you following the securities and tax rules that apply to municipal bonds, both at the time the bonds are issued and during the entire life of the bond issue? Can you prove it? 86

87 WHY ARE WE REALLY HERE? Bond compliance is important IRS &SEC have stepped up efforts to check compliance Can be significant penalties for non-compliance Compliance can impact marketability of bonds Compliance can be complicated Lots of fact-specific rules Compliance is a team effort Finance Officer/Bond Counsel/Auditor/Financial Advisor can t do this alone 87

88 KEY TO SUCCESS: RECORD KEEPING 88

89 YOUR ROLE Compliance Quarterback Post-Issuance Compliance Procedures Ask questions early and often! Not expected to be an expert Identifying issues early means we can avoid problems 89

90 Written Post-Issuance Compliance Procedures 90

91 WRITTEN COMPLIANCE PROCEDURES Key Elements: Address expenditure, investment and use of bond proceeds and financed assets, and continuing disclosure Assign accountability to an individual Understandable and flexible Part of Issuer s permanent records 91

92 COMPLIANCE REQUIREMENTS & HOW TO PROVE IT #1 Account for the investment of Bond proceeds Complete Arbitrage Rebate Computations on schedule #2 Account for the expenditure of Bond proceeds Complete a Final Written Allocation #3 Account for the use of Bond-financed assets Complete Annual Compliance Questionnaires #4 Account to Bondholders File Annual Report and other Event Notices with MSRB via EMMA 92

93 STEP # 1 Account for Investment of Bond Proceeds/Arbitrage Rebate 93

94 INVESTING/SPENDING BOND PROCEEDS Keep records for life of bond issue + any refunding bond issue + 3 years Arbitrage rebate computations Required even if rebate not owed Required of most bond issues; some exceptions 94

95 STEP # 2 Account for Expenditure of Bond Proceeds/Final Written Allocation 95

96 SPENDING BOND PROCEEDS Federal Tax Rules Generally only capital expenditures Some limited exceptions Keeping appropriate documentation is very important Sometimes this is the difference between eligible and ineligible expenditures Must be able to later identify bond-financed assets Payee, amount, date of payment, description of asset Placed in service date Expected useful life of asset 96

97 SPENDING BOND PROCEEDS EXAMPLES OF EXPENSES THAT ARE ALLOWABLE: Purchase of Buildings Land Building Improvements Hardware Equipment Furniture Other Bond closing costs Post-Issuance Compliance Costs (limited) 97

98 SPENDING BOND PROCEEDS EXAMPLES OF EXPENSES THAT ARE NOT ALLOWABLE: Annual maintenance costs Online subscription purchases Subscription based software Training costs 98

99 SPENDING BOND PROCEEDS EXAMPLES OF EXPENSES THAT SHOULD BE DISCUSSED BEFORE APPROVING: Personnel Costs Software Moving & storage costs Consultants Warranty/Maintenance 99

100 DOCUMENTING EXPENDITURES Final Written Allocation Estimated project budget completed at time of financing Allocation completed after project is complete based on actual expenditures Money is fungible 100

101 DOCUMENTING EXPENDITURES Final Written Allocation IRS has not created a form Similar to reports required for a governmental grant Total sources balanced to total uses Includes detailed description of costs (payee, date paid, amount paid, description) 101

102 DOCUMENTING EXPENDITURES Final Written Allocation Complete within 18 months of placed in service date of all bondfinanced assets (i.e., within 18 months of date all bond proceeds are spent) Should have all bond proceeds spent by 5 years from bond issue date 102

103 STEP # 3 Account for Use of Bond- Financed Assets/Annual Compliance Questionnaire 103

104 USE OF BOND-FINANCED ASSETS Must be able to identify bond-financed assets for life of bond issue + any refunding bond issue + 3 years. Why? IRS rules restrict the use of bond-financed assets during entire term of bonds (including any refunding issue) 104

105 USE OF BOND-FINANCED ASSETS Can be a problem if both: Private Business Use; and Payments to Issuer related to the private use 105

106 USE OF BOND-FINANCED ASSETS What is private business use? Sale or lease of property Management/Operating Arrangements Other arrangements that convey special legal rights 106

107 DOCUMENTING USE Annual Compliance Questionnaire Purpose: Help identify potential issues 7 Yes/No Questions Form available at: 107

108 STEP # 4 Continuing Disclosure/Accounting to Bondholders 108

109 109

110 ACCOUNTING TO BONDHOLDERS What bond issues are subject to reporting and how do I find out what I m supposed to report? 110

111 ACCOUNTING TO BONDHOLDERS Determine what you have agreed to report and when it must be reported Incorporate reporting into the annual compliance checklist Identify the special events that trigger immediate disclosure 111

112 ACCOUNTING TO BONDHOLDERS Isn t filing the annual audit enough? Annual Report = Audited Financials + Operating Data 112

113 ACCOUNTING TO BONDHOLDERS What do I do if I can t timely report the required information? 113

114 ACCOUNTING TO BONDHOLDERS Other required notices filed with the MSRB? 114

115 TAKE-AWAYS Bond compliance doesn t end when all of the money is spent! Ask questions early and often Some answers are very fact-specific Keep good documentation 115

116 KEY TO SUCCESS: RECORD KEEPING 116