City of Madison

City of Madison Finance | Photo Credit: Archie Nicolette

Continuing Disclosure: 2014

The Resolution authorizes the City to enter into a Continuing Disclosure Undertaking (the "Undertaking") pursuant to which the City will covenant and agree, for the benefit of the beneficial owners of the Notes, to provide certain financial information and operating data relating to the City within 270 days after the close of the City's fiscal year (the "Annual Report"), and to provide, in a timely manner, notices of the occurrence of certain enumerated events, if material. An excerpt from the Resolution pertaining to continuing disclosure is provided in Appendix II of this Official Statement. The Annual Report will be filed by the City with the Electronic Municipal Market Access System ("EMMA"). The information to be contained in the Annual Report will consist of the annual audited financial statements of the City and updated information with respect to the information in the Official Statement contained under the captions "Debt Structure", "General Fund Financial Information", "Tax Levies, Collections and Rates", and "City Property Values". Each annual audited financial statement will conform to generally accepted accounting principles applicable to governmental units prepared in accordance with standards of the Governmental Accounting Standards Board. The notices of material events and timely notice of any failure to file its Annual Report within the 270-day period will be filed by the City with EMMA.

The City's undertaking with respect to material events includes the occurrence of any of the following events with respect to the Notes:

1. Principal and interest payment delinquencies;
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2. Non-payment related defaults, if material;
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3. Unscheduled draws on debt service reserves reflecting financial difficulties;
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4. Unscheduled draws on credit enhancements reflecting financial difficulties;
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5. Substitution of credit or liquidity providers, or their failure to perform;
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6. Adverse tax opinions or events affecting the tax-exempt status of the Notes;
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7. Modifications to rights of Note holders or Bond holders, if material;
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8. Note or Bond calls, if material, and tender offers;
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9. Defeasances;
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10. Release, substitution or sale of property securing repayment of the Notes, if material;
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11. Rating changes;
  City of Madison General Obligation promissory notes (September 2014)  
12. Bankruptcy, insolvency, receivership or a similar event with respect to the City;
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13. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
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14. Appointment of a successor or additional trustee or the change of name of a trustee, if material.
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15. Comprehensive Annual Financial Reports (CAFR)

The City has agreed to the foregoing undertakings in order to assist participating underwriters of the Notes and brokers, dealers and municipal securities dealers in complying with Securities and Exchange Commission Rule 15c2-12 promulgated under the Securities Exchange Act of 1934. The City will provide the foregoing information for so long as Rule 15c2-12 is applicable to the Notes and the City remains an "obligated person" under the Rule with respect to the Notes. No provision of the Undertaking limits the remedies available to any beneficial owner of the Notes with respect to the enforcement of the continuing disclosure covenants of the City described above. Failure to comply with the continuing disclosure covenants will not constitute an event of default under the Undertaking.

The City may amend the continuing disclosure undertakings upon a change in circumstances provided that (a) the undertakings, as amended, would have complied with the requirements of Rule 15(c)2-12(b)(5) at the time of this offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances and (b) in the opinion of nationally recognized bond counsel selected by the City, the amendment does not materially impair the interests of the beneficial owners of the Notes.

The City has entered into continuing disclosure undertakings with respect to the City's general obligation bonds, sewer system revenue bonds, and bonds issued by the City's Community Development Authority debt obligations that require submissions not later than 270 days following the close of the City's fiscal year. The City has filed previous continuing disclosure annual reports using a 9-month obligation calculation period. The difference in the timing between 270 days and 9 months caused inadvertent late submissions by the City by 1 to 4 days with respect to the more recent undertakings in the past five years. The City has updated its procedures to ensure compliance with the 270-day submission requirement with respect to the applicable undertakings. The continuing disclosure undertakings entered into by the City with respect to its water utility revenue bonds require the City to submit the Utility's annual financial information and operating data to the MSRB not later than 12 months following the close of the City's fiscal year.

To the best of its knowledge, the City has complied for the past five years in material respects with previous undertakings entered into pursuant to the Rule, except as follows:

  • On December 22, 2009, Moody's downgraded the City's rating related to its sewer system revenue bonds (CUSIP 558605) from "Aa2" to "Aa3". The material event notice related to this rating change was filed with the MSRB through EMMA in 2014.
  • Incomplete information was filed in the annual reports for the City's sewer system revenue bonds (CUSIP 558605) for fiscal years 2008 through 2010. A notice and report containing the missing information were filed with the MSRB through EMMA in 2012.
  • On November 13, 2009, Moody's downgraded the City's rating related to its water utility revenue bonds (CUSIPs 558614 and 558617) from "Aa1" to "Aa2". The material event notice of this rating change was filed on CUSIP 558614 in 2010 and on CUSIP 558617 in 2014.
  • The audited financial statements and operating data related to the City's Parking Utility System for fiscal year 2008 were not filed as required on the City's $7,000,000 Parking System Revenue Bonds, Series 1995A (CUSIP 558532). These obligations were redeemed in full on December 1, 2009 and are no longer outstanding.
  • The City's audited financial statements and operating data for fiscal year 2010 were not filed as required on the Community Development Authority's $12,890,000 Taxable Fixed Rate Redevelopment Lease Revenue Bonds, Series 1996A (Block 89 Project) and $5,395,000 Taxable Fixed Rate Redevelopment Lease Revenue Refunding Bonds, Series 2000 (CUSIP 558452). The audited financial statements and operating data for fiscal year 2010 were filed on these issues with the MSRB through EMMA in 2014.