City of Santa Rosa, California - Page 9

                                        - 9 -                                          
          published rate schedule.  There are no specially negotiated rate             
          arrangements for the disposal of sewage among users of the sewage            
          system.  The sewage disposal functions of petitioner’s sewage                
          system are available for general public use.  The sewer demand               
          fees will secure and will be used to pay the debt service on the             
          bonds.  Debt service on the bonds will require petitioner to                 
          increase the sewer demand fees.  Petitioner expects, as of the               
          issue date, that the sewer demand fees will pay more than 95                 
          percent of the debt service on the bonds.                                    
               On June 2, 1998, petitioner adopted a resolution authorizing            
          the issuance of bonds (Series 1998A bonds).  On September 17,                
          1998, petitioner issued taxable bonds of $31 million, the                    
          proceeds of which, according to petitioner, were used to finance             
          the costs of the first phase of construction and acquisition in              
          the Geysers Alternative.  Petitioner proposes to issue additional            
          bonds of $140 million to finance anticipated costs of completing             
          the project and expects to use $31 million of the issue to refund            
          the taxable bonds on a tax-exempt basis.                                     
                                      Discussion                                       
          A.   Introduction                                                            
               Gross income includes all income from whatever source                   
          derived including interest.  Sec. 61(a)(4).  Under section                   
          103(a), gross income does not include interest on any State or               
          local bond.  However, section 103(a) does not apply to “Any                  






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011