Frequently Asked Questions
The Pima IDA is a nonprofit corporation designated a political subdivision of the State of Arizona, incorporated with the approval of Pima County, Arizona (the “Pima County”), pursuant to the provisions of the Constitution of the State and the Arizona statute currently titled “Industrial Development Financing,” Title 35, Chapter 5, Articles 1 through 5, Arizona Revised Statutes (Sections 35-701 through 35-761, inclusive)(the “IDA Act”).
In 1972, the Pima County Board of Supervisors authorized the creation of the Pima IDA. The Pima IDA has been issuing Bonds and helping Pima County grow through economic development and affordable housing opportunities ever since.
The Pima IDA is governed by a five-person Board of Directors selected by the Board of Supervisors of Pima County. Pursuant to the IDA Act, the terms of the Directors are on a rotating basis. The current Directors are Frank Y. Valenzuela, President, Kenneth M. Silverman, Vice President, Diane Quihuis, Secretary, John H. Payne, Assistant Secretary and Stanley Lehman, Treasurer. These community Directors receive no compensation for their service.
The underlying documents relating to each Bond issue for the Pima IDA say no claim can be made against any past, present, or future officer, director, counsel, advisor or agent of the Pima IDA or any successor thereto, as such, directly or through the Pima IDA or any successor thereto, under any rule of law or equity, statute or constitution, or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such officer, director, counsel, advisor or agent as such has been expressly waived.
The Pima IDA is a “conduit issuer” and is empowered to issue revenue bonds (or other obligations, such as notes or other loan obligations (herein “Bonds”) to provide funds for the financing or refinancing of the costs of the acquisition, construction, improvement, rehabilitation and equipping of a “project,” as defined in the IDA Act. Broad categories include low and moderate housing, industrial and manufacturing projects, non-profits and charter schools. The Pima IDA issues special limited obligations for each project, which provides the revenues to pay the principal and interest (and any premium) on the Bonds.
According to the legislative history of the IDA Act, the original intent was for economic development and housing matters. As the IDA Act’s list of projects has been expanded, the Pima IDA can issue Bonds for multiple types of projects.
No taxpayer monies fund or finance the Pima IDA. The Pima IDA receives no funding from either Pima County or the State of Arizona. The Bonds issued by the Pima IDA are not supported by taxpayer monies. The Pima IDA itself has no taxing power.
No portion of Pima County taxes, Pima County revenue or other governmental monies are used to pay on the Bonds issued by the Pima IDA. The Pima IDA does not have the power to pledge the general credit or taxing power of the State of Arizona or of any political subdivision thereof, including, but not limited to, Pima County. The Pima IDA does not pledge its general credit or any of its general funds to the revenue Bonds it issues.
No, the issuance of, and existence of, any Bonds issued by the Pima IDA do not impact any Bonds issued by Pima County. If any rating is issued (and none is required), the rating on a series of the Pima IDA’s Bonds exists separately from the rating on any Pima County Bonds. Nothing in any of the Pima County Bonds (or their covenants) relates to the Bonds issued by the Pima IDA.
The Pima IDA does not pledge its general credit or any of its general funds to the revenue Bonds it issues. Any Bonds issued by the Pima IDA are special limited obligation Bonds, payable from the sources of revenues and funds identified in that Bond issue (for example, hospital revenue Bonds would be paid from the revenues of a particular hospital). Therefore, the Pima IDA’s financial information and status is irrelevant to any investment decision with respect to its Bonds.
Once issued, the Pima IDA has no obligations with respect to its Bonds and all payments for the Bonds are made directly to the Trustee for disbursement to the Bondholders.
The Bonds issued by the Pima IDA are revenue Bonds, which are special limited obligations payable from the project which was financed. No Bondholder shall have any recourse for the payment of the principal, premium, if any, or interest on any of the Pima IDA Bonds or for any claim based thereon or upon any obligation, covenant, or agreement in the underlying bond documents.
A long-standing use of “project-based” financings, revenue Bonds are debt obligations which are payable solely from identified sources of funds. For example, a multifamily housing revenue Bonds will be payable solely from the monies of that borrower and that project. This is unlike general obligation Bonds or water/wastewater financings, which are paid from property taxes or the revenues of the water and/or wastewater system, respectively. Revenue Bonds are special limited obligations of the issuer, payable from the identified sources of funds, as opposed to general obligations, which are payable from any revenues of the issuing entity.
Pursuant to the IDA Act, the Pima County Board of Supervisors must approve each Bond issue that the Pima IDA issues. In addition, if a public hearing is required under federal income tax regulations, that will be held by the Pima IDA and the results reported to the Pima County Board of Supervisors.
Pursuant to the IDA Act, the Pima IDA must provide notice to the Arizona Attorney General of its intention to issue Bonds. Such notification shall adequately describe the project. The Attorney General shall inform the corporation within ten days if in the Attorney General’s opinion the project sought to be financed does not come within the purview of the IDA Act.
The IDA Act allows IDAs to issue revenue Bonds within or without the State of Arizona for the project purposes set forth in the IDA Act.
There’s an application fee of $3,000 (which is payable in increments if the borrower is a non-profit). The Pima IDA also issues an annual administrative fee which is 5 basis points per annum (paid annual or semiannually) on the outstanding amount of the Bonds as of the date of payment (prior to any prepayment or redemption), with a minimum amount of $3,000 per year, in arrears and pro-rata for the time outstanding. Additionally, the President or any officer of the Pima IDA may approve a one-time payment to the Pima IDA at or after closing of the Bonds in lieu of annual administrative fee payments to the Pima IDA, reflecting the present value of the Pima IDA’s annual administrative fees for less than the life of the Bonds (provided such payment shall provide for at least the period from issuance to first redemption date). The fees of the Pima IDA counsel relating to each bond issue are also paid by that borrower at time of closing of the bond issue.
The Pima IDA holds its regular meetings, open to the public, on the second Friday of every month at 12:00 p.m. Unless otherwise noticed, each meeting will be held in the Pima County Board of Supervisors Conference Room, First Floor, Pima County Administration Building, 130 West Congress Street, Tucson, Arizona. A special meeting can be held with proper notice. See Meetings on the home page.
See Contact Us.
The Pima IDA does not and will not in the future monitor the financial condition of any borrower, the operation of the project or otherwise monitor payment of the Bonds or compliance with the underlying bond documents. The responsibility for the operation of the project and the payment of the Bonds will rest entirely with the Borrower. The Pima IDA does not employ any staff to carry out its limited functions and it contracts with independent third parties to do so.
A public records request can be made here.
Yes, more information about the policy can be found here.