Section 35.03. Certification.

 

(1)  In this section, "Certification" means a determination by the department that a municipality meets the conditions of receiving financial assistance under s. 281.59 (9) (am) and (b) , Stats.

(2)  A notice of financial assistance commitment shall not be issued if the department determines that the municipality is unlikely to be able to repay the project loan. The department may take into consideration the following factors when determining whether to provide certification:

(a) The type and amount of the dedicated source of revenue available to repay the project loan.

(b) Debt service payments on the project loan, including but not limited to, amortization, actual or estimated interest rate and the anticipated disbursement schedule.

(c) Demographic information, including but not limited to, population, income, property values and employment.

(d) Services provided and costs incurred by the municipality.

(e) Revenues available to the municipality.

(f) Information that is included in financial statements of the municipality for the past 3 fiscal years or that would be required to be included if such statements were prepared in accordance with generally accepted accounting principles applicable to government units, and an auditor's opinion regarding the financial statements, including exceptions in such opinion or failure to provide such opinion.

(g) Any credit rating assigned to the municipality by a nationally recognized bond rating agency, whether or not such rating is published.

(h) Terms and conditions contained in any resolution or indenture of trust for obligations issued by the state to fund project loans.

(i) Any relevant financial information which may have an impact on a municipality"s ability to repay the project loan.

(3)  

(a) The department may not issue a certification unless the municipality demonstrates to the satisfaction of the department that the municipality has the financial capacity to assure sufficient dedicated sources of revenue to operate and maintain the project for its useful life and to pay the debt service, including funding and maintaining any debt service reserve, on its project loan. The department may consider the effect of proposed financial hardship assistance or assistance provided by another entity in making a determination of financial capacity.

(b) The department may require an opinion of counsel or bond counsel, acceptable to the department, to the effect that the obligation of the municipality to repay the project loan is valid and enforceable and that interest on the project loan is excluded from gross income for federal income tax purposes.

(4)  

(a) The department may not issue a certification unless the municipality establishes one or more dedicated sources of revenue that the department deems sufficient for repayment of the project loan.

(b) In this subsection, "dedicated source of revenue" includes any of the following:

1. For a general obligation, an irrevocable pledge of ad valorem taxes.

2. For a revenue obligation, a pledge of net revenues available to the utility, including user fees, a pledge of special assessments, municipal payments, other income, or a combination thereof.

3. For a metropolitan sewerage district organized under ss. 200.21 to 200.65 , Stats., a general obligation pledge of ad valorem taxes.

History: Cr. Register, September, 1991, No. 429 , eff. 10-1-91; correction in (4) (b) 3. made under s. 13.93 (2m) (b) 7., Stats., Register February 2002 No. 554 .