Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Hewitt staff warns council about IRS arbitrage rules when planning bond borrowing
Summary
Finance staff explained IRS arbitrage audits and the 36-month spending concern, cautioning council that borrowing more than the city can reasonably spend on projects within IRS timelines could affect underwriting and future ratings.
City finance staff told the City Council on July 21 that municipal tax-exempt borrowing can trigger Internal Revenue Service arbitrage rules requiring rebate calculations if bond proceeds are not spent according to federal timing rules. Staff summarized arbitrage basics and how they affect municipal borrowing: municipalities issuing tax‑exempt bonds must ensure bond proceeds are spent for public projects in a timely way and that earnings on temporarily invested proceeds do not materially exceed the bond yield. If earnings exceed the allowed yield, the excess — an…
Already have an account? Log in
Subscribe to keep reading
Unlock the rest of this article — and every article on Citizen Portal.
- Unlimited articles
- AI-powered breakdowns of topics, speakers, decisions, and budgets
- Instant alerts when your location has a new meeting
- Follow topics and more locations
- 1,000 AI Insights / month, plus AI Chat
