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11) Disclosure to bondholders. In general, each property owner who accounts for <br />more than 10% of the annual debt service or bonded indebtedness must <br />provide ongoing disclosure information annually as described under SEC <br />Rule 15(c) 2-12. <br />12) Disclosure to prospective purchasers. Full disclosure about outstanding <br />balances and annual payments should be made by the seller to prospective <br />buyers at the time that the buyer bids on the property. It should not be <br />deferred to after the buyer has made the decision to purchase. When <br />appropriate, applicants or property owners may be required to provide the <br />City with a disclosure plan. <br />E. Conduit Financings <br />Conduit financing is the issuance of securities by a governmental entity to finance a <br />project that will primarily benefit a third party, typically a private corporation. The <br />security for this type of financing is usually the credit of the private entity, rather than <br />the governmental unit. Usually such securities do not constitute an obligation of the <br />issuer since the private entity is liable for generating the pledged revenues for <br />repayment. Industrial development, mortgage revenue, hospital development, <br />assessment districts and community facilities districts are common types of conduit <br />financing. <br />1) The City will consider requests for conduit financing on a case -by -case basis <br />using the following criteria: <br />(i) All conduit financing must insulate the City completely from any <br />credit risk or exposure. <br />(ii) The City's bond counsel will review the terms of the financing, and <br />render an opinion that there will be no liability to the City in issuing <br />the bonds on behalf of the applicant. <br />(iii) There is a clearly articulated public purpose in providing the conduit <br />financing. <br />(iv) The applicant is capable of achieving this public purpose. <br />2) This means that the review of requests for conduit financing will generally be <br />a two step process: first asking the Council if they are interested in <br />considering the request, and establishing the ground rules for evaluating it; <br />and then returning with the results of this evaluation, and recommending <br />approval of appropriate financing documents if warranted. This two-step <br />approach ensures that the issues are clear for both the City and applicant, and <br />that key policy questions are answered. <br />9 249 <br />