2014 South Bend Financial Assurance Test Report

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SOLID WASTE LAND DISPOSAL FACILITIES on all the general obligation bonds. (bb) The local government permittee shall satisfy the following financial ratios based on the local government permittee's most recent audited annual financial statement: (1) A ratio of cash plus marketable securities to total expenditures greater than or equal to five - hundredths (0.05). (2) A ratio of annual debt service to total expenditures less than or equal to two- tenths (0.20). (BB) The local government permittee shall: (aa) prepare the local government permittee's financial statements in conformity with generally accepted accounting principles (GAAP) for governments; and (bb) have the financial statements audited by an independent certified public accountant or the state board of accounts. (CC) A local government permittee is not eligible to assure the local government permittee's obligations under this subdivision if any of the following applies to the local government permittee: (aa) The local government permittee is currently in default on any outstanding general obligation bonds. (bb) The local government permittee has any outstanding general obligation bonds rated lower than Baa as issued by Moody's or BBB as issued by Standard and Poor's. (cc) The local government permittee has operated at a deficit equal to five percent (5 %) or more of total annual revenue in each of the past two (2) fiscal years. (dd) The local government permittee receives an adverse opinion, disclaimer of opinion, or other qualified opinion from the independent certified public accountant or the state board of accounts auditing its financial statement as required under subitem (BB). The commissioner may evaluate qualified opinions on a case -by -case basis and allow use of the financial test in cases where the commissioner deems the qualification insufficient to warrant disallowance of use of the test. (DD) As used in this subdivision, the following terms apply: (aa) "Cash plus marketable securities" means all the cash plus marketable securities held by the local government permittee on the last day of a fiscal year, excluding cash and marketable securities designated to satisfy past obligations, such as pensions. (bb) "Debt service" means the amount of principal and interest due on a loan in a given time period, typically the current year. (cc) "Deficit" means total annual revenues minus total annual expenditures. (dd) "Total expenditures" means all expenditures, excluding capital outlays and debt repayment. (cc) "Total revenues" means revenues from all taxes and fees but does not include the proceeds from borrowing or asset sales, excluding revenues from funds managed by the local government permittee on behalf of a specific third party. (EE) Ifthe permittee using the local government financial test has a current bond rating of BBB- as issued by Standard and Poor's or Baa3 as issued by Moody's for the permittee's most recent bond issuance, the commissioner may request that the permittee submit the following information to the department on a quarterly basis until the bond rating is upgraded: (aa) The current bond rating of the most recent issuance. (bb) The name of the rating service. (cc) The date of issuance of the bond. (dd) The date of maturity of the bond. (ee) The last credit rating action. (ft) An explanation of any events such as decrease in the bond ratings, as well as inclusion on a negative credit watch list. This quarterly update will supplement the record keeping and report requirements specified in item (iii). On the basis of the submitted information, if the commissioner finds that the permittee no longer meets the local government financial test requirements, the permittee shall provide alternate financial assurance Indiana Administrative Code Page 252