2341 - (DDAA) Post-Issuance Tax Compliance Policy for Tax-Exempt (Bond) Obligations

2341 (DDAA) Post-Issuance Tax Compliance 2341 (DDAA)

Policy for Tax-Exempt (Bond) Obligations

The purpose of this Post-Issuance Tax Compliance Policy and Procedures is to establish policies
and procedures in connection with tax-exempt bonds and notes (the “Bond” or “Bonds”) issued
by Milford School District, New Hampshire (the “Issuer”) so as to maximize the likelihood that
all applicable post-issuance requirements of federal income tax law needed to preserve the tax-

exempt status of the Bonds are met.

1. The Milford School District designates the Business Administrator as the Compliance
Coordinator (“Coordinator”).

The Coordinator shall be responsible for monitoring post-issuance compliance.
The Coordinator will maintain a copy of the transcript of proceedings in
connection with the issuance of any tax-exempt obligations. The Coordinator will
obtain such records as are necessary to meet the requirements of this policy.
The Coordinator shall consult with bond counsel, a rebate consultant, financial
advisor, Internal Revenue Service (“IRS”) publications and such other resources
as are necessary to understand and meet the requirements of this policy.
Training and education of the Coordinator and his/her staff will be sought and
implemented upon the occurrence of new developments and upon the hiring of
new personnel to implement this policy.

2. Record-Keeping.

a. Financing Transcripts. The Coordinator shall confirm the proper filing with the
IRS of an 8038 Series return, and maintain a transcript of proceedings for all tax-

exempt obligations issued by the Issuer, including but not limited to all tax-

exempt bonds, notes and lease-purchase contracts. Each transcript shall be
maintained for as long as the Bonds are outstanding, plus three (3) years after the
final redemption date of the Bonds. Said transcript may be maintained in
electronic format and shall include, at a minimum:

1. Form 8038s;
2. minutes, resolutions, and certificates;
3. certifications of issue price from the underwriter, if applicable;
4. formal elections required by the IRS;
5. trustee statements, if applicable;
6. records of refunded bonds, if applicable;
7. correspondence relating to bond financings;
8. reports of any IRS examinations for bond financings;
9. documents related to governmental grants associated with construction,
  renovation or purchase of bond financed facilities, if applicable; and
10. publications, brochures, and newspaper articles, where applicable.

b. Modification to Financing Documents. The Coordinator shall determine if there
is any “significant modification” to bond documents resulting in reissuance under

Treasury Regulations §1.1001-3, in consultation with bond counsel and any other
legal counsel and financial advisor. The Coordinator shall retain proof of filing
new Form 8038 and relevant documentation plus final rebate calculation on pre-

modification bonds.

3. Proper Use of Proceeds. The Coordinator shall review the resolution authorizing
issuance for each tax-exempt obligation issued by the Issuer and shall:

obtain a computation of the yield on such issue from the Issuer’s financial
advisor;
create a separate Project Fund (with as many sub-funds as shall be necessary to
allocate proceeds among the projects being funded by the issue) and a separate
Cost of Issuance Fund as necessary to allocate proceeds to Bond issuance costs
into which the proceeds of the issue shall be deposited, as applicable;
review all requisitions, draw schedules, draw requests, invoices and bills
requesting payment from the Project Fund;
determine whether payment from the Project Fund is appropriate, and if so, make
payment from the Project Fund (and appropriate sub-fund if applicable);
maintain records of the payment requests and corresponding records showing
payment;
maintain records showing the earnings on, and investment of, the Project Fund;
ensure that all investments acquired with proceeds are purchased at fair market
value;
identify bond proceeds or applicable debt service allocations that must be invested
with a yield-restriction and monitor the investments of any yield-restricted funds
to ensure that the yield on such investments does not exceed the yield to which
such investments are restricted;
maintain records related to any investment contracts, credit enhancement
transactions, and the bidding of financial products related to the proceeds; and
monitor and maintain records of the reimbursement of costs previously expended
by the Issuer to ensure that such reimbursement occurs not more than 18 months
after the later of (i) the dates of the expenditures or (ii) the date the project/asset
was placed in service (but not more than 3 years after the original expenditures
were paid) except with respect to those expenditures for which the Issuer obtained
a certificate of licensed engineer/architect to the effect that (I) at least five (5)
years was necessary to complete the construction of the part of the project for
which such expenditures were required; and (II) such expenditures shall be
reimbursed not more than five (5) years after the date that the original
expenditures were paid.

4. Arbitrage/Rebate Compliance and Timely Expenditure of Proceeds. The Coordinator
shall review the No Arbitrage and Tax Certificate (or equivalent) (the “Certificate”) for
each tax-exempt obligation issued by the Issuer and the expenditure records provided in
Section 2 of this policy, above, and shall ensure that the Issuer takes the following
actions:

monitor and ensure that proceeds of each such issue are spent within the
temporary period set forth in the Certificate;
if at the time of issuance, it appears that that the Bonds will qualify for the small
issuer exception to the rebate requirement, the Coordinator will monitor the
amount of subsequent tax-exempt obligations issued or proposed to be issued in
the calendar year in which the Bonds closed to ensure that the Issuer does not
exceed the $5 million or $15 million threshold, as applicable, in such calendar
year;
if at the time of issuance, based on reasonable expectations set forth in the
Certificate, it appears likely that the issue will qualify for an exemption from the
rebate requirement, the Issuer may defer taking any of the actions set forth in
subsection (d) below. Not later than the time of completion of construction or
acquisition of the project, and depletion of all funds from the Project Fund, the
Issuer shall make a determination if the expenditure of the Bond proceeds
qualified for an exemption from the rebate requirements based on spending within
a 6 month, 18 month or 2 year period after issuance. If a rebate exemption is
determined to be applicable, the Issuer shall prepare and keep in the permanent
records of the issue a memorandum evidencing this conclusion together with
records of expenditure to support such conclusion. If the transaction does not
qualify for rebate exemption, the Issuer shall initiate the steps set forth in (d)
below;
if at the time of issuance it appears likely that arbitrage rebate calculations will be
required, or upon determination that calculations are required pursuant to (c)
above, the Issuer shall:

1. engage the services of expert advisors (each a “Rebate Service Provider”)
  to assist in the calculation of arbitrage rebate payable in respect of the
  investment of Bond proceeds, or else shall ensure that it has adequate
  financial, accounting and legal resources of its own to make such
  calculations, and, prior to each rebate calculation date, cause the trustee or
  other financial institution investing bond proceeds to deliver periodic
  statements concerning the investment of Bond proceeds to the Rebate
  Service Provider;
2. provide to the Rebate Service Provider additional documents and
  information reasonably requested by the Rebate Service Provider;
3. monitor efforts of the Rebate Service Provider;
4. assure payment of required rebate amounts, if any, no later than 60 days
  after each 5-year anniversary of the issue date of the Bonds, and no later
  than 60 days after the last Bond of each issue is redeemed;
5. during the construction period of each capital project financed in whole or
  in part by Bonds, monitor the investment and expenditure of Bond
  proceeds and consult with the Rebate Service Provider to determine
  compliance with any applicable exceptions from the arbitrage rebate
  requirements during each 6-month spending period up to 6 months, 18
  months or 2 years, as applicable, following the issue date of the Bonds;
6. retain copies of all arbitrage reports, trustee statements and other
  documents as required herein; and
7. in lieu of engaging an outside Rebate Service Provider, the Issuer may
  make a determination that it has sufficient capabilities using its own
  personnel, supported by its regular accounting and legal advisers, to be
  able to make the required rebate calculations. Such determination shall be
  evidenced in writing with specific reference to the personnel and advisers
  to carry out the calculations, and such written determination shall be
  maintained in the records of the bond transaction.

5. Proper Use of Bond Financed Assets.

a. The Coordinator shall maintain appropriate records and a list of all bond financed
assets. Such records shall include the actual amount of proceeds (including
investment earnings) spent on each of the bond financed assets.

b. With respect to each bond financed asset, the Coordinator will monitor and confer
with bond counsel with respect to all proposed:

1. management contracts,
2. service agreements,
3. research contracts,
4. naming rights contracts,
5. leases or sub-leases,
6. joint venture, limited liability or partnership arrangements,
7. sale of property, or
8. any other change in use of such asset.

c. Section 141 of the Code sets forth private activity tests for the purpose of limiting
the volume of tax-exempt bonds that finance activities of persons other than state
and local governmental entities. These tests serve to identify arrangements that
actually or reasonably expect to transfer the benefits of tax-exempt financing to
non-governmental persons, including the federal government. The Coordinator
shall provide to the users of any bond financed property a copy of this
Compliance Policy and other appropriate written guidance advising that:

1. “Private business use” means use by any person other than the Issuer,
  including business corporations, partnerships, limited liability companies,
  associations, non-profit corporations, natural persons engaged in trade or
  business activity, and the United States of America and any federal
  agency, as a result of ownership of the property or use of the property
  under a lease, management or service contract (except for certain
  “qualified” management or service contracts), “naming rights” contract,
  “public-private partnership” arrangement, or any similar use arrangement
  that provides special legal entitlements for the use of the bond financed
  property;
2. No more that 10% of the proceeds of any tax-exempt bond issue
  (including the property financed with the Bonds) may be used for private
  business use, of which no more than 5% of the proceeds of the tax-exempt
  bond issue (including the property financed with the bonds) may be used
  
  for any “unrelated” private business use – that is, generally, a private
  business use that is not functionally related to the government’s purposes
  of the Bonds; and no more that the lesser of $5,000,000 or 5% of the
  proceeds of a tax-exempt bond issue may be used to make or finance a
  loan to any person other than a state or local government unit;
3. Before entering into any special use arrangement with a non-governmental
  person that involves the use of bond financed property, the Coordinator
  will consult with bond counsel, provide bond counsel with a description of
  the proposed non-governmental use arrangement, and determine whether
  that use arrangement, if put into effect, will be consistent with the
  restrictions on private business use of the bond financed property; and
4. In connection with the evaluation of any proposed non-governmental use
  arrangement, the Issuer will consult with bond counsel to obtain federal
  tax advice in whether that use arrangement, if put into effect, will be
  consistent with the restrictions on private business use of the bond
  financed property, and, if not, whether any “remedial action” permitted
  under §141 of the Code may be taken as means of enabling that use
  
  arrangement to be put into effect without adversely affecting the tax-
  exempt status of the Bonds.

d. The Coordinator shall maintain a copy of any such proposed agreement, contract,
lease or arrangement, together with the response by bond counsel with respect to
said proposal for at least three (3) years after retirement of all tax-exempt
obligations issued to fund all or any portion of bond financed assets;

e. The Coordinator shall consult with bond counsel and other legal counsel and
advisers in the review of any change in use of bond-financed or refinanced assets
to ensure compliance with all covenants and restrictions set forth in the
Certificate;

f. The Coordinator shall confer at least annually with other personnel responsible
for bond-financed or refinanced assets to identify and discuss any existing or
planned use of bond-financed or refinanced assets, to ensure that those uses are
consistent with all covenants and restrictions set forth in the Certificate; and

g. To the extent that the Coordinator discovers that any applicable tax restrictions
regarding use of bond proceeds and bond-financed or refinanced assets will or
may be violated, the Coordinator shall consult promptly with bond counsel and
other legal counsel and advisers to determine a course of action to remediate all
nonqualified bonds, if such counsel advises that a remedial action is necessary.

6. Bank Qualification. If the Bonds are issued in a par amount of $10 million or less and
designated by the Issuer as “bank qualified” under Section 265(b)(3) of the Code, the
Coordinator will monitor the amount of subsequent tax-exempt obligations issued or
proposed to be issued in the calendar year in which the Bonds closed to ensure that the
Issuer does not exceed the $10 million threshold in such calendar year.

7. General Project Records. For each project financed with tax-exempt obligations, the
Coordinator shall maintain a copy of all material documents relating to capital

expenditures financed or re-financed by tax-exempt proceeds, until three (3) years after
retirement of the tax-exempt obligations or obligations issued to refund those obligations
including (without limitation), the following:

appraisals, demand surveys or feasibility studies,
applications, approvals and other documentation of grants,
depreciation schedules,
contracts respecting the project, including construction contracts,
purchase orders,
Invoices,
trustee requisitions and payment records,
documents relating to costs reimbursed with Bond proceeds, and
records identifying the assets or portion of assets that are financed or refinanced
with Bond proceeds, including a final allocation of proceeds.

8. Advance Refundings. The Coordinator, shall be responsible for the following current,
post issuance and record retention procedures with respect to advance refunding bonds:

Identify and select bonds to be advance refunded with advice from internal
financial personnel, and a financial advisor;
The Coordinator shall identify, with advice from the financial advisor and bond
counsel, any possible federal tax compliance issues prior to structuring any
advance refunding;
The Coordinator shall review the structure with the input of the financial advisor
and bond counsel, of advance refunding issues prior to the issuance to ensure (i)
that the proposed refunding is permitted pursuant to applicable federal tax
requirements if there has been a prior refunding of the original bond issue; (ii) that
the proposed issuance complies with federal income tax requirements which
might impose restrictions on the redemption date of the refunded bonds; (iii) that
the proposed issuance complies with federal income tax requirements which allow
for the proceeds and replacement proceeds of an issue to be invested temporarily
in higher yielding investments without causing the advance refunding bonds to
become “arbitrage bonds”; (iv) that the proposed issuance will not result in the
issuer’s exploitation of the difference between tax exempt and taxable interest
rates to obtain an financial advantage nor overburden the tax exempt market in a
way that might be considered an abusive transaction for federal tax purposes; and
(v) that the proposed refunding complies with applicable State law.
The Coordinator shall collect and review data related to arbitrage yield restriction
and rebate requirements for advance refunding bonds. To ensure such
compliance, the Coordinator shall engage a rebate consultant to prepare a
verification report in connection with the advance refunding issuance. Said report
shall ensure said requirements are satisfied.
The Coordinator shall, whenever possible, purchase SLGS to size each advance
refunding escrow. The financial advisor and/or bond counsel shall be included in
the process of subscribing SLGS. To the extent SLGS are not available for
purchase, the Coordinator shall, in consultation with bond counsel and the

financial advisor, comply with IRS regulations.
To the extent the Issuer elects to purchase a guaranteed investment contract, the
Coordinator shall ensure, after input from bond counsel, compliance with any
bidding requirements set forth by the IRS regulations.
In determining the issue price for any advance refunding issuance, the
Coordinator shall obtain and retain issue price certification by the purchasing
underwriter at closing.
After the issuance of an advance refunding issue, the Coordinator shall ensure
timely identification of violations of any federal tax requirements and engage
bond counsel in attempt to remediate same in accordance with IRS regulations.

9. Continuing Disclosure. The Coordinator shall assure compliance with each continuing
disclosure certificate and annually, per continuing disclosure agreements, file audited
annual financial statements and other information required by each continuing disclosure
agreement. The Coordinator will monitor material events as described in each continuing
disclosure agreement and assure compliance with material event disclosure. Events to be
reported shall be reported promptly, but in no event not later than ten (10) Business Days
after the day of the occurrence of the event. Currently, such notice shall be given in the
event of:

Principal and interest payment delinquencies;
Non-payment related defaults, if material;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements relating to the bonds reflecting
financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax-exempt
status of the bonds, or material events affecting the tax-exempt status of the
bonds;
Modifications to rights of Holders of the Bonds, if material;
Bond calls (excluding sinking fund mandatory redemptions), if material, and
tender offers;
Defeasances of the bonds;
Release, substitution, or sale of property securing repayment of the bonds, if
material;
Rating changes on the bonds;
Bankruptcy, insolvency, receivership or similar event of the Issuer;
The consummation of a merger, consolidation, or acquisition involving the Issuer
or the sale of all or substantially all of the assets of the Issuer, 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;
Appointment of a successor or additional trustee or the change of name of a
trustee, if material; and
Incurrence of a financial obligation of the Obligated Person, if material, or
agreement to covenants, events of default, remedies, priority rights, or other
similar terms of a financial obligation of the Obligated Person, any of which
affect security holders, if material ¹; and
Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a financial obligation of the Obligated Person,
any of which reflect financial difficulties ¹.

10. Compliance with Continuing Disclosure Filings Under S.E.C. Rule 15c2-12. Under
S.E.C. Rule 15c2-12, the Issuer may be required to periodically provide financial
documentation, reports, notice and updates of documents to EMMA, the Electronic
Municipal Market Access website managed by the Municipal Securities Rulemaking
Board. Compliance is required in accordance with the Issuer’s Material Events
Disclosure Certificate and/or Continuing Disclosure Certificate executed in connection
with a bond or note issue.

11. Due Diligence and Remedial Actions. In all activities related to the Issuer’s Bonds, the
Coordinator and his/her staff will exercise due diligence to comply with the Code
provisions governing tax-exempt obligations. The Issuer is aware of (a) the Voluntary
Closing Agreement Program (known as “VCAP”) operated by the IRS which allows
issuers to voluntarily enter into a closing agreement in the event of certain non-
compliance with Federal tax requirements and (b) the remedial actions available under
Section 1.141-12 of the Income Tax Regulations for private use of bond financed
property which was not expected at the time the Bonds were issued.

12. Periodic Review. The Issuer will monitor compliance with the guidelines contained in
this policy as well as any other covenants not specifically included herein and will review
and update these guidelines at least annually and whenever necessary due to change in
law or circumstances.

Legal References:

RSA-35-A
26 CFR § 1.1001-3
26 CFR § 1.141-12
17 CFR § 240.15c2-12

Adopted: 9/2/2025