Substantial variations in procedures and in the lease, bond resolution, trust agreement and related documents are permitted by law. The general procedures noted below are largely by way of illustration.
Preliminary Approval Process
It is advisable that the institution communicate with the Commission, through the office of the Bond Counsel, at an early stage in the planning process. After the institution officials confer with Bond Counsel, they should draft an application letter. The application is then submitted to Bond Counsel for review.
The Bond Counsel reviews the application to assess the compliance of the project within statutory requirements. Bond Counsel then sends a letter to the eligible institution along with four copies of a Preliminary Agreement, relating to the Commission’s bonds for the capital project. The letter establishes a meeting between the qualifying institution and the Commission and provides notification of a $500 application fee, payable to the Commission by check included with a copy of the application letter sent to the Vice Chair of the Commission.
On the pre-established date, the qualifying institution official or officials will meet with the Commission and present the project proposal. The original presentation to the Commission should include the following information:
- Clear description of the project;
- Estimate of the costs; including costs of bond sale, site purchase, construction costs, architectural fees, contingencies, and possible funding of debt reserves;
- Site availability;
- Institution finances;
- Projected operating costs of the facility including debt service and the ability of the institution to absorb the additional costs into its current operation budget;
- Information on student enrollment; and
- Eligibility of the institution and eligibility of the project with respect to requirements set forth in Chapter 3377 of the Ohio Revised Code.
After the institution’s presentation, the Commission reviews the proposal with Bond Counsel and asks questions, as needed. The OHEFC members will then vote on a preliminary resolution to approve or deny the project’s financing. If the application receives approval, the institution will be responsible for paying a $500 application fee, as previously detailed in the Preliminary Agreement.
Final Approval
Once a project financing receives approval, a second meeting with the Commission is established through the Bond Counsel’s office. The second meeting between the qualifying institution and the Commission allows the Commission members to vote on final approval for the eligible bond project.
Prior to that meeting, Bond Counsel will prepare the Trust Agreement, Base Lease, Lease and other bond documents in connection with the financing. Bond Counsel will work with the institution, its lawyers, the Trustee Bank, the Underwriters and their respective counsel. The institution with assistance from Bond Counsel and other members of the financing team will prepare the offering/disclosure document needed for the sale of the bonds.
Bond Counsel will also coordinate all applicable Tax and Equity Fiscal Responsibility Act (TEFRA) hearings, as required by federal law. Bond Counsel will provide notification of each pending TEFRA hearing in the appropriate media publications in both Columbus, Ohio and the community local to the institution, and will, in addition, conduct the TEFRA hearing.
Following final approval by the Commission, the institution and the underwriters will proceed to market the Bonds. Once the Bonds are sold and the issue closed, the bond proceeds are held by the Trustee for disbursement to the institution to pay the costs of financing and the project costs.