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The IDA of the City of Sierra Vista was created pursuant to, (and is governed by), A.R.S. §35-701 – 733 (the “IDA statute”). Pursuant to the IDA statute, The IDA of the City of Sierra Vista is a nonprofit corporation designated a political subdivision of the State of Arizona (the “State”).

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Pursuant to the IDA statute, The IDA of the City of Sierra Vista is empowered to issue its bonds to provide funds for the financing or refinancing of the costs of the acquisition, construction, improvement, rehabilitation or equipping of a “project,” as defined in the IDA statute. With the exception of certain housing bond issues, pursuant to the IDA statute, The IDA of the City of Sierra Vista can issue its bonds for any project within or without the State of Arizona. Each series of bonds are to be repaid from the source of revenues pledged to those bonds.

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Under the IDA statutes, The IDA of the City of Sierra Vista is a “conduit issuer”, and as such, any bonds it issues may qualify to be federally tax exempt, subject to the federal tax regulations. The federal tax rules do not match the IDA statutes and so not all of the projects that can be financed under the IDA statutes are federally tax-exempt. 

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Interest rates charged to finance a project for a bond applicant are generally lower than conventional commercial rates because of the tax-exempt status of the interest on the bonds due to the IDA’s conduit nature.

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The actual structuring of the Bonds is done through negotiation between the bond applicant and the lender or underwriter purchasing the Bonds, including loan/Bond amount, interest payment dates and schedule, maturity, collateral, and interest rate.  Therefore, the terms of the Bonds can be adjusted to satisfy the borrowing entity and the lender.

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None of the revenues to pay The IDA’s bonds will come from The IDA of the City of Sierra Vista or the City of Sierra Vista  and therefore both The IDA of the City of Sierra Vista  and the City's financial information and status are irrelevant to any investment decision with respect to the Bonds. Nor does The IDA of the City of Sierra Vista pledge the City’s, the State’s, the IDA’s, nor any other political subdivisions’ general credit for repayment on The IDA of the City of Sierra Vista's  bonds. Repayment on The IDA of the City of Sierra Vista's bonds come solely from the collateral and pledged revenue of each Bond issuance.

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The IDA of the City of Sierra Vista receives no funds from The City of Sierra Vista for its operations and has not received any taxpayer dollars from any municipalities including Sierra Vista, the State or the United States Government. The IDA of the City of Sierra Vista itself has no taxing power and does not have the power to pledge the general credit or taxing powers of Sierra Vista, the State or any political subdivision thereof, pursuant to the IDA statute. The IDA of the City of Sierra Vista does not pledge its general credit for any of its bonds.