1998-10-19 Resolution 130 - Laserfiche WebLink

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. As described above in "Tax Matters;' the original issue discount that accrues in each year to an owner of a Discount Bond may result in certain collateral federal income tax consequences. Owners of any Discount Bonds should be aware that the accrual of original issue discount in each year may result in a tax liability from these collateral tax consequences even though the owners of such Discount Bonds will not receive a corresponding cash payment until a later year. Owners who purchase Discount Bonds in the initial public offering but at a price different from the Issue Price for such maturity should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. The Code contains certain provisions relating to the accrual of original issue discount in the case of subsequent purchasers of bonds such as the Discount Bonds. Owners who do not purchase Discount Bonds in the initial offering should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. Owners of Discount Bonds should consult their own tax advisors with respect to the state and local tax consequences of owning the Discount Bonds. It is possible under the applicable provisions governing the determination of state or local income taxes accrued interest on the Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment until a later year. DISCUSSION OF THE YEAR 2000 PROBLEM Impact of the Year 2000 Issue. Every organization is faced with the potential problem on January 1, 2000, when the calendars on computer hardware and software change from the year 1999 to the year 2000 and on certain other dates (for example, but not limited to, leap years and September 9, 1999 i.e. 9/9/99) (the "Y2K Problem'). The Y2K Problem occurs when computer. hardware and software that use dates where the date has been stored as two-digits misinterpret the year 2000 to be "00", the word zero, 1900, or some other erroneous date. The actions that will be initiated by computer hardware and software which are programmed in this manner are uncertain. The Y2K Problem has the potential to affect entities like the Authority and the City in several ways. For example, it could have an impact on the financial records of the Authority and the City, and could result in a system failure or miscalculations causing disruption of operations, including among other things, a temporary inability to process transactions or engage in similar business activities, including those relating to accounting for the Bonds. The Authority and the City have ordered hardware and software upgrades where appropriate. Similarly, the Y2K Problem could affect St. Joseph County's and the State of Indiana's accounting, operating, billing and bill paying abilities. The Y2K Problem may also affect other institutions directly or indirectly related to the Bonds, including those insuring timely payment of principal and interest on the Bonds. The Y2K Problem may adversely affect the Registrar and Paying Agent and its ability to process payments, billings, funds and account activities, and investments. Similarly, DTC and its Participants and Indirect Participants may all be affected by the Y2K Problem, which may adversely affect their respective abilities to process principal and interest payments on the Bonds. While institutions are generally aware of the Y2K Problem and are generally working to address and to prevent such problems, no assurances can be made that all such problems which could have a material adverse effect on the Authority's and the City's operations or financial -18-