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<br /> IV. BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES
<br /> A. Proiected Bond Sales
<br /> The maximum authorized bonded indebtedness for CFD No. 2006-1 shall not exceed
<br /> $100,000,000 in aggregate for all improvement areas. It is anticipated that bonds will be
<br /> issued separately for each Improvement Area as development commences in such
<br /> improvement area.
<br /> B. Incidental Bond Issuance Expenses to be Included in the Proposed Bonded
<br /> Indebtedness
<br /> Pursuant to Section 32-58 of the Code, bonded indebtedness may include all costs and
<br /> estimated costs incidental to, or connected with, the accomplishment of the purpose for
<br /> which the proposed debt is to be incurred, including, but not limited to, the costs of
<br /> engineering, azchitectura] (building and landscape), geotechnical and environmental and
<br /> related, miscellaneous consulting services, survey, staking and contract administration
<br /> services, permits, plan check fees, entitlement processing fees and expenses, special tax
<br /> consultant services, county staff review, oversight and administrative services, bond
<br /> counsel, special tax counsel and disclosure counsel services, financial advisor services,
<br /> special tax administrator services, appraiser/market absorption consultant services, initial
<br /> bond transfer agent, fiscal agent, registraz and paying agent services,
<br /> and rebate calculation service set up charge, bond printing, official statement printing and
<br /> mailing, publishing, mailing and posting of notices, recording fees, underwriter's discount,
<br /> fees and expenses, bond reserve fund, capitalized interest, governmental notification and
<br /> filing fees, credit enhancement costs, real estate acquisition costs, rating agency fees, other
<br /> costs of bond issuance or special tax/district administration. For purposes of determining
<br /> the special tax rates for CFD No. 2006-1, bond issue estimates included capitalized interest
<br /> at approximately 15.07 percent, a reserve fund equal to 9.05 percent, and other incidental
<br /> bond issuance expenses equal to 5.00 percent of the principal amount of the bonds. Actual
<br /> bond issue characteristics will vary from the above estimates based on market conditions
<br /> and other factors.
<br /> C. Incidental Expenses to be Included in the Annual Levv of Special Taxes
<br /> Pursuant to Section 32-53 of the Code, the proceeds of any special tax may only be used to
<br /> pay, in whole or part, the cost of providing public facilities, services and incidental
<br /> expenses. The expenses of certain recurring services pertaining to the CFD No. 2006-1
<br /> may be included in each annual special tax levy. These include trustee, bond transfer
<br /> agent, registrar and paying agent services, rebate calculation services and periodic arbitrage
<br /> rebate payments, special tax administrator services, other necessary consultant services
<br /> incidental to the administration of CFD No. 2006-I, rating agency fees, posting, collecting
<br /> and enforcing payment of the special taxes, including but not limited to foreclosure
<br /> attorneys' services, personnel and administrative services provided by County personnel,
<br /> and continuing disclosure services. While the actual cost of administering CFD No. 2006-1
<br /> may vary, it is anticipated that the amount of special taxes which can be collected will be
<br /> County of Hawaii December 28, 2006
<br /> CFD No. 1006-] (The Villages ofAina Lea) Page 6
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