Continuing Disclosure – Annual Report Filing for Issuers of Bonds

Submitted by: Michael Givler, Principal

This is the second of two articles discussing Continuing Disclosure for your outstanding bonds.

In a previous issue of Footnotes, we described the requirement to disclose significant material events for bond issues larger than $1 million. In addition to material event filings, most issuers are also required by SEC Rule 15 (c) 2-12 to file annual reports. The deadline for annual report filings is the 180th day after the end of the issuer's fiscal year. For example, if your fiscal year ends June 30th, the annual report is due by December 27th each year throughout the life of the bond issue.

What Information is Included in the Annual Report Filing?

The annual report information typically includes the audited financial statements, plus the following items:

• Enrollment History
• Retirement Plan
• History of Valuations – State Equalized Valuation and Taxable Valuation
• Tax Levies and Collections
• State Aid Payments
• School District Tax Rates
• Largest Taxpayers
• School Loan Revolving Fund
• Direct Debt and
• General Fund Budget Summary

Since the list of disclosure items may vary for each bond issue, you should review your Continuing Disclosure Undertaking Agreement which is included in the final bond transcript you received from bond counsel.

Are There Exceptions to the Annual Report Filing?

Issuers are not required to file an annual report for:

• Bonds issued prior to July 1, 1995
• Private Placement Bonds
• Bond issues less than $1 million in orignial par amount

There are also certain exceptions for small issuers with under $10 million in total outstanding bonds. Check with your bond counsel or financial advisor to determine if these exceptions apply to your school district.

If you have questions regarding the annual report filing, or if we can assist you in meeting these requirements, please contact us at footnotes@umbaugh.com.