R590 - Issuance of Revenue Bonds for Facilities Construction or Equipment

R590, Issuance of Revenue Bonds for Facilities Construction or Equipment

R590-1. Purpose

To provide procedural guidelines for the issuance of revenue bonds within the USHE for facilities construction or equipment purchases.

R590-2. References

2.1. Utah Code Title 53B, Chapter 21 (Revenue Bonds)

2.2. Utah Code Title 11, Chapter 17 (Utah Industrial Facilities and Development Act)

2.3. Utah Code Title 63, Chapter 56 (Utah Procurement Code)

2.4. Policy and Procedures R220, Delegation of Responsibility to the Presidents and Institutional Boards of Trustees

2.5. Policy and Procedures R710, Capital Facilities

R590-3 Policy

3.1. Availability of Associate Commissioner for Finance and Facilities for Assistance - When requested by the institution, the Associate Commissioner for Finance and Facilities shall assist in the development of institutional revenue bonding proposals for facilities construction or equipment purchases. At the discretion of institution officials, institutions may proceed independently to develop revenue bonding proposals for facilities construction or equipment purchases provided the proposals are developed in accordance with Regent policies R220, R710 and applicable procedures contained in this policy.

3.2. Procedural Requirements for Institutions Issuing Bonds Pursuant to Utah Code Title 11, Chapter 17, Industrial Facilities and Development Act - Institutions issuing bonds pursuant to Utah Code Title 11, Chapter 17, Utah Industrial Facilities and Development Act, shall:

3.2.1. Obtain Board approval in concept of each facility construction project through the Finance and Facilities Committee of the Board based on documentation of the need for the project and its compatibility with and inclusion in the current institutional facilities master plan. This approval must be sought and obtained prior to or simultaneously with approval to seek financing.

3.2.2. Obtain Board approval to seek revenue bond financing for the construction project or equipment purchase through the Finance and Facilities Committee of the Board, providing a description of the project and an initial plan for debt servicing. When scheduling permits, approval to seek financing shall be obtained prior to the steps set forth in 3.2.3. When scheduling requirements are urgent, steps set forth in 3.2.3 may be initiated prior to obtaining Board approval to seek financing.

3.2.3. Request appointment of bond counsel by the Attorney General, select an underwriter or underwriting team through a request for proposal process and provide copies of the request for bond counsel and the underwriter request for proposal to the Associate Commissioner for Budget and Finance.

3.2.4. Obtain a Board resolution through the Finance and Facilities Committee authorizing issuance of the bonds. The authorizing resolution shall be prepared by bond counsel and shall include the provisions necessary to complete the transaction and issue the bonds. The authorizing resolution shall include the parameters for principal amounts, terms, discounts and timing. The institution shall submit to the Board current plans for debt service and up-to-date financial feasibility analysis with the proposed authorizing resolution. When possible, the authorizing resolutions, related bond documentation, and financial feasibility data shall be submitted to the Associate Commissioner for Finance and Facilities for review at least 15 days prior to Board consideration of the resolution.

3.3. Procedural Requirements for Institutions Obtaining Specific Legislative Authority Consistent with Utah Code Title 53B, Chapter 21 to Issue Revenue Bonds - Institutions obtaining specific legislative authority consistent with Utah Code Title 53B, Chapter 21 to issue revenue bonds shall:

3.3.1. Obtain Board approval in concept of each facility construction project through the Finance and Facilities Committee of the Board based on documentation of the need for the project and its compatibility with and inclusion in the current institutional facilities master plan. This approval must be sought and obtained prior to or simultaneously with approval to seek legislative authority to issue the bonds.

3.3.2. Obtain Board approval to seek legislative authority to issue revenue bonds for the construction project or equipment purchase through the Finance and Facilities Committee of the Board based on a description of the project.

3.3.3. Through the Commissioner's office, request legislative authority to issue the revenue bonds for the construction project or equipment purchase.

3.3.4. Obtain Board approval to seek revenue bond financing for the construction project or equipment purchase through the Finance and Facilities Committee of the Board based on an updated description of the project and an initial plan for debt servicing. When scheduling permits, approval to seek financing shall be obtained prior to the steps set forth in 3.3.5. When scheduling requirements are urgent, steps set forth in 3.3.5 may be initiated prior to obtaining Board approval to seek financing.

3.3.5. Request appointment of bond counsel by the Attorney General, select an underwriter or underwriting team through a request for proposal process and provide copies of the request for bond counsel and the underwriter request for proposal to the Associate Commissioner for Finance and Facilities.

3.3.6. Obtain a Board resolution through the Finance and Facilities Committee of the Board authorizing issuance of the bonds. The authorizing resolution shall be prepared by bond counsel and shall include all provisions necessary to complete the transaction and issue the bonds. The authorizing resolution shall include the parameters for principal amounts, terms, discounts and timing. Revised plans for debt service and up-to-date financial feasibility analysis shall be submitted to the Board with the proposed authorizing resolution. When possible, the authorizing resolutions, related bond documentation, and financial feasibility data shall be submitted to the Associate Commissioner for Finance and Facilities for review at least 15 days prior to Board consideration of the resolution.

3.4 Procurement of Financial Services - Institutional procurement of all financial services relating to bond issues shall be made in compliance with Utah Code Title 63, Chapter 56, Utah Procurement Code.

3.5. Responsibility of the Associate Commissioner for Finance and Facilities to Review Bond Documentation - Prior to Board consideration of any authorizing resolution the Associate Commissioner for Finance and Facilities shall review the applicable bond documentation. The Associate Commissioner shall also evaluate up-to-date financial data, provisions for renewal and replacement, provisions for sinking fund reserve, parameters on principal amounts, terms, discounts and timing, and other issues relating to the financial feasibility of the proposed bond issue. The Associate Commissioner shall report findings to the Commissioner and shall be available to address any financial concerns the Board may have.

3.6 Associate Commissioner for Finance and Facilities to Seek Attorney's General Opinion - The Associate Commissioner for Finance and Facilities shall request an opinion from the Attorney General regarding the legality of the bond issue and related contracts and provisions.

3.7. Associate Commissioner for Finance and Facilities to Submit an Annual Report of Bond Debt. The Associate
Commissioner for Finance and Facilities shall prepare and submit to the Board an annual report which summarizes institutional and system bonded indebtedness, relative to nationally recognized standards for financial strength, associated with institutional or system revenue bonds, and shall include a summary of State of Utah General Obligation Bond debt associated with USHE capital development. ____________________________________________________________________________________________________

(Adopted June 28, 1991, amended January 16, 2004.)