Res 1992-038 - Laserfiche WebLink

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OTHER. R.ELEV ANT INFORMATION Ratinp The presently outstanding tax supported debt of the City it rated -A- by Moody'. Investors Service, Inc. (-Moody',-) and - A-by Standard &: Poor's Corporation (-S&P-). Application. for contract rating. on this itsue havc been madc to Moody'. and S&P. An explanation ofthc significance of such ratings may be obtained from the company furnishing the rating. The ratings reflects only the respective views of .uch organizations and thc City makes no representation as to thc appropriateness of the ratings. There it no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of cither or both companica, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or cither of them, may have an adverse cffect on thc market price of the Bonds. Tax Exemption The Bonds, in the opinion of Bond Counsel, will not be -private activity bonds- within the meaning of Section 14(a) of the Internal Revenue Code of 1986 (thc -Code-). Accordingly, interest on thc Bonds will not be treated as a preference item under the alternativc minimum tax provisions of the Codc as applicable to individuals and corporation., cxcept that inte1'Clt on the Bonds will be included in the -adjusted net book income- or the -adjusted current earnings- of certain corporations for purposes of computing the alternativc minimum tax and the environmental tax imposed on such COrporatioDl. Furthermore, in the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income under Section 103(a) of the Code. Thc statutea, applicable regulations, published rulings of the Internal Revenuc Service and court deciJioDl on which such opinions arc based are subject to change. Thesc opinions are dependent in part on future compliance by the City with certain post-issuance requirements of the Code, including the arbitrage rebate requirements. Failure to comply with such requirements may cause the inte1'Clt on the Bonds to be includable in gross income retroactive to the date of issue. In this connection, various covenants and representations will be made by the City in the documents authorizing the issuanceof the Bonds that arc designed to provide assurance of compliance with such requirements, and for purposes of its opinions, Bond Counsel will assume compliance by the City therewith. In addition such opinions are based upon representations and certifications of the City pertaining to the use, expenditure and investment of thc proceeds of the Bonds. Except as descn'bed above, Bond Counsel expresses no opinion with respect to any other federal, state or local tax consequences under present law or proposed legislation resulting from the receipt or accrual of interest on, or the acquisition, ownership or disposition of, the Bonds. Prospective purchasers of the Bonds should be aware that the ownership of tax-exempt obligations such as the Bonds may result in collateral federal tax consequences to, among others, property and casualty iDlurance companies, certain foreign corporations doing business in the United States, individual recipients of Social Security or Railroad Retirement benefits, taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, stockholders of corporations receiving or accruing tax-exempt interest and S corporations with subchapter C earnings and profits. Prospective purchasers should consuh their own tax advisors as to the applicability to thes~ and other such collateral consequences to their particular circumstances. The fonn of Bond Counsel's opinion is set forth in Appendix C hereto. Tax Accounting Tratment of Discount Bonds Thc initial public offering price to be paid Cor certain Bonds may be less than the principal amount payable on such Bond at maturity (the -Discount Bonds-). An amount equal to thc difference between the initial public offering price of the Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are IOld to the public at such price) and thc principal amount payable at maturity coDltitutes inte1'Clt to the initial purchasec of such Discount Bonds. A portion of such interest, allocable to the holding period of such Discount Bond by the initial purchaser, will, upon the disposition of such Discount Bonds (including by reason of ita payment at maturity), be treated as interest excludable from gross inCome, rather than as taxable gain, for federal income tax purposes. Such interest it considered to be accrued actuarially in accordance with the CODltant interest method ovcr the lifc of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bond. However, such interest may be required to be taken into account in detennining the alternativc minimum taxablc income of a corporation, Cor purposes of calculating a corporation's alternative minimum tax imposed by the Tax Refonn Act of 1986 and the environmental tax imposed by thc Superfund Revenuc Act of 1986, and the amount of the branch profits tax applicable to certain foreign COrporatiODl doing business in the United States, even though there will not be a corresponding cuh payment. In addition, the accrual of such interest may resuh in certain other collateral fcdetaJ income tax conaequcnca to, among others, financial institutions. life insurance companies, property and cuuahy insurance companica, S COrporatioDl with .ubchapter C 19