HomeMy WebLinkAboutItem PCITY OF SEAL BEACH
AGENDA STAFF REPORT
DATE: August 14, 2017
TO: Honorable Mayor and City Council Members
THRU: Jill R. Ingram, City Manager
FROM: Victoria L. Beatley, Director of Finance /City Treasurer
SUBJECT: DEBT ISSUANCE AND MANAGEMENT POLICY
SUMMARY OF REQUEST:
That the City Council adopt Resolution No. 6761, adopting a Debt Issuance and
Management Policy and taking related actions.
BACKGROUND AND ANALYSIS:
The City and the City's related public entities (such as the Seal Beach Public
Financing Authority), from time to time, issue bonds or incur debt obligations
(collectively, "bonds ") to finance projects. The City will likely issue additional
bonds in the future, when it is prudent and appropriate to do so.
Pursuant to Government Code Section 8855, a Report of Proposed Debt
Issuance must be filed with the California Debt and Investment Advisory
Commission ( "CDIAC ") before the sale of any bond issue.
The newly adopted Senate Bill 1029 ( "SB 1029 "), which became effective
January 1, 2017, amended Government Code Section 8855. Among other
things, SB 1029 effectively requires a local government agency to adopt a formal
debt policy before issuing bonds. SB 1029 imposes a new requirement that each
Report of Proposed Debt Issuance must include the issuer's certification that it
has adopted a local debt policy and that the contemplated bond issue is
consistent with such adopted policy.
SB 1029 provides that the local debt policy must including the following
1. The purpose for which the debt proceeds may be used;
2. The types of debt that may be issued;
3. The relationship of the debt to, and integration with the issuer's
capital improvement program or budget, if applicable;
Agenda Item P
4. Policy goals related to the issuer's planning goals and objectives;
and,
5. The internal control procedures that the issuer has implemented, or
will implement, to ensure that the proceeds of the proposed debt
issuance will be directed to the intended use.
The City currently does not have a formal written debt policy pertaining to the
issuance of bonds and the maintenance of bond - related records.
The Debt Issuance and Management Policy has been drafted in furtherance of
the City's goals of fiscal sustainability and financial prudence. It sets forth formal
written guidelines for the City's bond issuances and the administration of bond
records, reporting obligations and bond proceeds expenditures. It contains
provisions that reflect the City's current practices and comply with the
requirements of SIB 1029.
ENVIRONMENTAL IMPACT:
There is no environmental impact.
LEGAL ANALYSIS:
City Attorney has reviewed and approved as to form.
FINANCIAL IMPACT:
The Debt Issuance and Management Policy has been drafted in furtherance of
the City's goals of fiscal sustainability and financial prudence. It contains
provisions that reflect the City's current practices and comply with the
requirements of SB 1029.
RECOMMENDATION:
That the City Council adopt Resolution No. 6761, adopting a Debt Issuance and
Management Policy and taking related actions.
SUBM Y: � - -- NOTED AND APPROVED:
Victoria L. Beatley, Ji Ingram, City na er
Director of Finance /City Treasurer
Attachment:
Resolution No. 6761, with attachment:
Exhibit A — Debt Issuance and Management Policy
Page 2
RESOLUTION NUMBER 6761
A RESOLUTION OF THE CITY COUNCIL TO THE CITY OF SEAL
BEACH ADOPTING A DEBT ISSUANCE AND MANAGEMENT POLICY
AND TAKING RELATED ACTIONS
RECITALS:
A. The City of Seal Beach and its related entities (such as the Seal Beach
Public Financing Authority) (together, the "City") have issued bonds or incur other
financing obligations ( "Local Debf') that are subject to requirements for the filing of
reports to the California Debt and Investment Advisory Commission ( "CDIAC ") pursuant
to California Government Code Section 8855 ( "Section 8855 ").
B. Under Section 8855, municipal issuers of Local Debt must file a report (the
"Report of Proposed Debt Issuance ") at least 30 days before the sale of any Local Debt
issue.
C. Senate Bill No. 1029 ( "SB 1029 "), effective January 1, 2017, amended
Section 8855 to augment the information that a municipal issuer must provide to CDIAC
in connection with Local Debt issuances.
D. Section 8855, as amended by SB 1029, requires the Report of Proposed
Debt Issuance to include a certification that the municipal issuer has adopted a debt
policy and the contemplated Local Debt issuance is consistent with such debt policy.
E. Section 8855(1)(1) requires that the debt policy must include the following
elements:
0) The purposes for which the debt proceeds may be used;
(ii) The types of debt that may be issued;
(iii) The relationship of the debt to, and integration with, the issuer's
capital improvement program or budget, if applicable;
(iv) Policy goals related to the issuer's planning goals and objectives;
and
(v) The internal control procedures that the issuer has implemented, or
will implement, to ensure that the proceeds of the proposed debt
issuance will be directed to the intended use.
F. The City expects that it will continue to issue Local Debt from time to time;
G. This City desires to adopt the Debt Issuance and Management Policy, as
set forth in Exhibit A (the "Policy").
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH
HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS:
Section 1. The above recitals are true and correct and are a substantive part
of this Resolution.
Section 2. The City Council hereby determines and finds that the Policy
complies with the requirements of Section 8855(1)(1).
Section 3. The Policy, as set forth in Exhibit A, is hereby approved and
adopted. The Policy shall be applicable to Local Debt issued by or on behalf of the City
(including its related entities such as, but not limited to, the Seal Beach Public Financing
Authority and City- formed community facilities districts).
Section 4. The City Manager, the Director of Finance /City Treasurer and all
other officers of the City are hereby authorized and directed, jointly and severally, to do
any and all things to effectuate the purposes of this Resolution and to implement the
Policy, and any such actions previously taken by such officers are hereby ratified and
confirmed
Section 5. This Resolution will become effective upon adoption.
Section 6. This Resolution shall take effect upon its adoption.
PASSED, APPROVED and ADOPTED by the City Council at a meeting held on
the 14th day of August, 2017.
AYES: Council Members:
NOES: Council Members:
ABSENT: Council Members:
ATTEST:
Robin L. Roberts, City Clerk
-2-
Sandra Massa - Lavitt, Mayor
EXHIBIT A
Debt Issuance and Management Policy
(see attached)
SEA` e� CITY OF SEAL BEACH
U
�<ff01tMP Debt Issuance and Management Policy
SECTION 1- PURPOSE
The purpose of this Debt Issuance and Management Policy
guidelines for issuing debt and managing outstanding debt and
regarding the timing and purposes for which debt may be isst
debt, and method of sale that map be used. Adherence to a
debt is issued and managed prudently in order to maintain a
S "Policy ") is to provide written
provide guidance to policy makers
types and amounts of permissible
P helps to ensure the City's
nd financial position and optimal
credit ratings. The debt policies and procedures are subject to and limited by applicable provisions
of state and federal law and prudent debt management principles.
When used in this Policy, "debt" or "bonds" shall be interpreted broadly to mean bonds, notes,
certificates of participation, financingaleases, loans or other financing obligations, but the use of such
term in this Policy shall be solely for convenience and shall not be interpreted to characterize any
such obligation as an indebtedness or debt within the meaning -of any constitutional debt limitation
where the substance and terms of the ob"llgition fall within exceptions to the constitutional debt
Limitation. This Pohcv,shall,applts to all deb issued, soldWto third party lenders or investors and
does not pertain to
This Policy is
GovernmentC
of SeallBeacF
City and its
SECTION 2 -'
entities, as
The City recognizes that
to:
benefit obligations.
with the r quiremcnts of S.B. 1029, codified as part of
festive on January 1, 2017. This Policy is applicable to the City
ides, such ase Successor Agency to the Seal Beach
Seach Public Financing Authority, and the City's various
n, the term "City" shall refer to shall mean the City and /or the
:ext may require.
debt issuance and management policy is required in order
• Maintain the City's sound financial position.
• Ensure the City has the flexibility to respond to changes in future service priorities, revenue
levels, and operating expenses.
• Protect the City's creditworthiness.
• Ensure the City's debt is consistent with the City's planning goals and objectives and capital
improvement program and /or budget, as applicable.
The main objectives are to establish conditions for the use of debt:
• To ensure that debt capacity and affordability are adequately considered.
• To minimize the City's interest and issuance costs.
• To achieve the highest practical credit ratings.
• To provide complete financial disclosure and reporting.
Properly issued and managed debt is a critical element in any financial management program. It
assists the City's effort to allocate limited resources to provide the highest quality of service to the
public. A properly managed debt program promotes economic J& th and enhances the vitality of
the City of Seal Beach for its residents and businesses.
SECTION 3 — ACCEPTABLE USES OF
The Citv will consider the use of long -term debt f
refurbishment, replacement, or expansion of capita
the project's useful life will equal or exceed the ten
Federal tax law requirements, or to, r the purpose c
(including the City's pension obligations), subject to
latex in this Policy. Examples of purposes fox -hicl
not limited to, the acquisition and /or improvement
acquisition of a capital asset with a useful %6ofa m
reconstruction of a facility. A
ing primarily forthc acquisition, substantial
its and capital improvement projects only if
the financing or will otherwise comply with
efundif refinancing or xrestructuring debt
MIgparameters and objectives discussed
nW -termm debt can be issued include, but are
or long -term easements;
and the construction or
An exception of this long -term driven focus is ehe issuance of short -term instruments such as tax
and revenue antic pat on notes, which are to be used for prudent cash management purposes, as
described Belo v. %Bonded debt ;should not be issued to finance normal operating expenses. General
Fund debt will not be issued to support ongoing operational costs unless such debt issuance
achieves net�opcxadng cost say ngs and such savings are verified by independent analysis.
A. l.oNg- in Debt
(i) Long -term debt may be issued to finance or refinance the construction, acquisition,
substant al refurbishment, rehabilitation, replacement or expansion of capital assets such
as improvements and facilities, equipment and land to be owned and /or operated b}' the
City. Long -term debt financings are appropriate when any of the following conditions
exist:
• When the project being financed is necessary to provide basic municipal services.
• When the project being financed will provide benefit to constituents over multiple
years.
• When the total long -term debt financing would not impose an unreasonable burden
on the City and its taxpayers or ratepayers, as applicable.
• When the debt is issued to refinance outstanding debt in order to produce debt
service savings or to benefit from debt restructuring.
(ii) Long -term debt financing will not generally be considered appropriate for current
operating expenses and routine maintenance expenses.
(iii) The Cite may use long term debt financings subject to the following conditions:
• The project to the financed has been, or will be, included in the City's capital
improvement plan or budget and will be approved by the City Council.
• The weighted average maturity of the debt
120% of the average reasonably expecte
Financed.
• The City estimates that sufficient income and
debt through its maturiq. AV
• The City determines that the del
requirements of state and federal law.
• The City considers
and there are no
Financial alternative
funds on hand, cu
there f.
(iv) The City will undcrta
refunding opportututji
constrains, if applicabh
Refundings which at
related to changes in c
issuer, or restructuring
minimum of three per
considered economical
savings will be consid
approvat.
B. Short -Term Debt
to the project will not exceed
sic life of the project being
be available to service the
complith the applicable
rojectto be of vital, time- sensitive need of the community
ble altexnauve financm' g sources after considering other
h as pap- as -`aot go funM g, the use of grants or existing
or anticipated cash, reserve balances, or any combination
e periodic revieyvs of outstanding long -term debt to identi fy
Refu°ndings will be considered (within the federal tax law
if and when there is a net economic benefit from the refunding.
oron- economic map be undertaken to achieve n
m hi Ciobjectives
IM
)venants, call provisions, operational flexibility, tax status of the
of the . d'ebt service profile. In general, refundings resulting in a
cut (3 %) net present value savings of the refunded debt will be
yviable. Rendings producing less than 3% net present value
(red on a case -by -case basis, and are subject to City Council
(i) Short -term debt may be issued to provide financing for the City's operational cash flows
in order to maintain a steady and even cash flow balance in the event of temporary
shortfalls in cash flow for the City due to timing of receipt of revenues and the lack of
cash on hand to cover temporary deficits.
(ii) Short -term debt may also be used to finance the City's short -lived capital projects, such
as lease - purchase financing or equipment.
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(iii) Prior to issuance of any short -term debt, a reliable revenue source shall be identified for
repayment of the debt.
C. Financings on Behalf of Other Entities
(i) The City may also find it beneficial to issue debt on behalf of other governmental
agencies in order to further the public purposes of the City. In such cases, the City, shall
take reasonable steps to confirm the financial feasibility of the project being financed
and the financial solvency of any borrower and that the issuance of such debt is
consistent with the policies set forth herein.
SECTION 4 - TYPES OF DEBT
In order to maximize the financial options available to benefit thgpublic, the City Nvill consider the
issuance of all generally acceptable types of debt subject to a careful review by management of all
available and projected funding sources and how the proposed issuance of a specific debt structure
would fit within the overall debt portfolio and profile of the City to determine whether it meets the
City's long -term objectives. The City shall not undertake any new debt obligations without a
thorough analysis of the City's long -tern revenue and expend ture trends and its ability to support
and service additional debt payments.
A. General Obligation (GO) Bonds
B.
r•, .. 'acquisition (i) GO Bonds axe suitable for use in the construction or acqutstnon of improvements to
real pxop'erty that benefit the pubfatl e. Example s of projects include libraries,
parks and public safety Fac li ies. sonds shall be authorized by he requisite
number of votexs,in orderiioApass.
Revenue Bonds are 1AM'd- liability obligations tied to a specific enterprise or special
find revenue stream where the projects financed clearly benefit or relate to the
enterprise or are othetnvise permissible uses of the special revenue. Generally, no voter
approval is required to issue this type of obligation and it is not subject to the State
constitutional debt limitation, but in some cases, the City must comply with Proposition
218 regarding rate AAIJustments. Examples of this type of bonds include Water Revenue
Bonds, Wastewatersor Sewer Revenue Bonds.
C. General Fund - Supported Debt
(i) General Fund - Supported Debt is generally comprised of COPS and Lease Revenue
Bonds (LRBs) which are lease obligations secured by a lease -back arrangement between
the City and another public entity. Typically, the City appropriates annually available
General Fund revenues or funds on hand to pay the lease payments to the other entiry
and, in turn, the public entity uses the lease payments received by the City to pay debt
service on the COPS or the LRBs.
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(it) General Fund - Supported Debt may also include judgment obligation bonds QOBs)
issued to refund obligations imposed by law, such as judgments, or pension obligation
bonds (POBs) issued to refund unfunded accrued actuarial liabilities for pension plans.
(in) To avoid a violation of the State constitutional debt limit, payments to be made under
valid leases are payable only in the Year in which use and occupancy of the leased
property is available, and lease payments may not be accelerated. Lease financing
requires the fair market rental value of the leased property to be equal to or greater than
the required debt service or lease payment schedule. The lessee (the City) is obligated to
include in its Amoral Budget and appropriate the Mental payments that are due and
payable during each fiscal Year the lessee has
D. Land- Secured Debt
(i) Land - Secured Debt is generally cc
under the Mello -Roos Community
such as Community Facilities Distt
applicable assessment statutes by 1913/-199
date of this policy, the City's special distric
and Pacific Gateway Business Ce, ntcrr CFD
(ii) The City, will consider
by property based i
infrastructure fox nea
Statement of'] ocal Gc
and debt service cox
considered on Phase b
<CreTitworffiniess, tine
special tax or special E. crement Financing.
(i) 'lax Increment Finan
property.
if special assessment special tax debt issued
Act of 1982, as %lended, by special districts
s) and limited obligation bonds issued under
iA�ct Assessment Districts (
1 ADs). As of the
consist of Heron Pointe CFD No. 2002 -01
listrict formation and debt issuance secured
nts or special taxes `yin order to provide necessary
pment under guidelines adopted by Ciq Council (the
Policies), wh ch may include minimum value -to -lien ratios
and maximum tax burdens. Each application will be
>asis. In order to protect bondholders as well as the Cin's
alsocomply with all State guidelines regarding the issuance
options to finance infrastructure and economic
development projects using as a repayment stream property tax revenues generated
above an established "base year" value (tax increment). 'The City may consider tax
increment f nancing to the extent permitted under State law. Examples include tax
allocation bonds, which are special obligations secured by the allocation of tax increment
revenues generated by increased property taxes in a designated redevelopment project
area, as well as debt issued by Enhanced Infrastructure Financing Districts (F IFDs) or
Community- Revitalization and Investment Authorities (CRIAs). When considering tax
increment financing mechanisms permitted by law, the City should analyze the practical
viability of the proposed financing and take into account the potential impact of the
proposed structure on existing debt limitations.
F. Conduit Financing
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(i) Conduits financing involves the issuance of securities by a government agency to finance
a project of a third party, such as a non- profit organization or other private entity.
Conduit financings are typically not secured by the City's credit. Examples include
industrial development bonds and financings for affordable rental housing and qualified
501(c)(3) organizations. The City may sponsor conduit financings for those activities that
have a general public purpose and are consistent with the City's overall service and
strategic objectives. While conduit financings do not constitute a general obligation of
the issuer, the same level of due diligence prior to bond issuance is required.
G. Short -Term Financine
(i) Short -term borrowing, such as commercial paper, Tax and Revenue Anticipation Notes
(TRANS), Bond or Grant Anticipation Notes (BANs), and lines of credit, will be
considered as an interim source of fundt"ng in anticipation of long -term borrowing or
receipt of revenues and may, be issufto nerate fund ng fox cash flow needs. The final
maturity of the debt issued to finaproject shall be consistent with the useful life
of the project.
(it) In compliance with applicable State law, any such notes shall be Npayabte either not later
than the last day of the fiscal year in which they are issued or during the fiscal }rear
succeeding the fiscal year of issuance, but in no -event later than 15 months after the
issuance date, and only if such notes are,papable only from revenue received or accrued
during the frscalyearkin which they'`wexe issued. NAL
(iii) Short -term debt map also be used 'to finance short -lived capital projects, such as
equipment or lease- purchase financing.
H. ioimtIPo -we Authorit-v7(,,TPA )$Financing withl®ther Local Governments
O In addition to some of the long and sliiort term financing instruments described above,
the City may also consider joint powers arrangements with other governmental agencies
when a project serves the public interest beyond city boundaries.
1. Refunding Bonds
(i) The City shall refinance debt pursuant to the authorization that is provided under
California la but not lituited to Articles 10 and 11 of Chapter 3 of Part 1 of
Division 2 of Title 5 of the California Government Code, as market opportunities arise.
The Director of Finance/City Treasurer shall identify refunding opportunities and
prepare a present value analysis that describes the economic effects of the refunding.
Refundings may be undertaken in order to:
• Take advantage of lower interest rates and achieve debt service cost savings.
• Eliminate restrictive or burdensome bond covenants.
6
• Restructure debt to lengthen the duration of repayment, relieve debt service
spikes, reduce volatiliry in interest rates or free up reserve funds.
(ii) Generally, the City shall strive to achieve a minimum of 3% net present value savings for
a current refunding and a minimum of 5% net present value savings for an advance
refunding. Upon the advice of the Director of Finance /City Treasurer and with the
assistance of the City's municipal advisor and bond counsel, the City will consider
undertaking refundings for other than economic purposes based upon a finding that
such a restructuring is in the City's overall best financial interest.
The Ciry ma}' from time to time find that other forms of debt would be beneficial to further its
public purposes and may approve such debt without an amendment of this Policy. Although
alternative financing structures and debt instruments sometimes provide a lower borrowing cost in
the short run, they may carry greater risk in the medium and /or long run. Before entering into such
arrangements, the City should carefully evaluate the benefits and risks associated with such
alternative financing mechanisms and the potential implications on the City's debt affordability and
credit profile.
Debt shall be issued as fixed rate debt unless the City makes a specific determination as to the
season that a variable rate issue would be beneficial to the @ityrin a specific circumstance.
VIAL
SECTION 5 — STRUCTURE AND TERM OF DEBT ISSUES
The City will establish all terms and conditions related to the issuance of debt, and will control,
manage, and invest all debt proceeds:, The following restrictions will be followed unless otherwise
authorized by the City.
A. Term ,ofsDebt
T ebt will be structured for the shortest practicable period, consistent with a fair
llocation of costs to current and future users. Typically, the term of long -term debt
borrowing is 5 -30 years. Generally, the weighted average maturity of the debt should not
exceed 120 percent of the weighted average economic fife of the projects or equipment
being financed, unless tliere are specific circumstances that would mitigate the extension
of time to repay the debt and it would not result in violation of any covenants to
maintain the taxlexempt status of such debt, if applicable.
B. Debt Regiment Structure
(i) In structuring a debt issue, the City will manage the amortization of debt and, to the
extent possible, match its cash flow to the anticipated debt service payments. The Ciry
shall design the repayment of debt to take best advantage of market conditions, provide
flexibility, and, as practical, to recapture or achieve its best credit rating. The City will
evaluate alternative debt structures to ensure the most cost - efficient financing under
prevailing market conditions.
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(ii) The City will generally seek to structure debt with aggregate level annual debt service
payments over the life of the debt. Strictures with unlevel debt service will be
considered when one or more of the following exist:
• Natural disasters or extraordinat'v unanticipated external factors make payments
on debt in the early years prohibitive.
• Such structuring is beneficial to the City's aggregate overall debt payment
schedule.
• Such structuring will allow debt service to rl' losely match project revenues.
C. Bond Marurin� Options
(i) For each bond issuance, the City will
occasions where circumstances warrant
The decision to use serial bonds, to rry
based on market conditions and invest(
D. Credit Enhancement
E.
(i) Credit enhancement maybe used to imp
obligation. "Types of credit enhancement
WL surety policies. The City s municipal .a
enhancementFif €it�reduces the overall cost
credit enhancement - fathers the
best
°rial Bonds or term bonds, or both. On
NM
appreciation bonds (CABs) may be used.
or CABs or anycombination is typically
t a credit rating on a City debt
of credit, bond insurance and
D�,mmend the use of a credit
llfinancina or if the use of such
typically held by the bond trustee or fiscal agent to make
is to liondholders in the event that pledged revenues arc
will fund debt service reserve funds when it is in the City's
(ii) Under federal tax law, the size of the reserve fund for a tax - exempt debt issue is
generally limited to the least of 10% of par amount of bonds, 125% of average annual
debt service, and 100% of maximum annual debt service.
(i) In lieu of holding, a cash reserve, the City may substitute a surety bond or other credit
instrument in its place. The decision to cash fund a reserve fund rather than to use a
credit facility is dependent on the cost of the credit instrument and the investment
opportunities.
(iv) The City may decide not to utilize a reserve fund or to fund a partial reserve fund if the
Director of Finance /CiEv Treasurer, assisted by the Cir.y's municipal advisor, determines
there would be no adverse impact on the City's credit rating or interest rates.
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F. Call Provisions
(i) A call option or optional redemption provision gives the City the right to prepay or retire
debt prior to its stated maturity date. This option may permit the City to achieve interest
savings in the future through the refunding of the debt. Because the cost of call options
can vary depending on market conditions, an evaluation of factors will be conducted in
connection with each issuance.
(ii) In general, the City's debt issues will include a call feature that is no later than ten (10)
years from the date of delivery, of the debt. The City will generally avoid the sale of non-
AF
callable debt. The use of a call option will be evaluated and recommended on a case by
case basis.
SECTION 6 — RELATIONSHIP TO CAPITAL IMPROVEMENT
PROGRAM AND OPERATING
The City's multi-year Capital Improvement Prog—ratr
while this Debt Policv provides direction and hunt
implement the C111. Debt issuance for capital proj
Improvement Program to be recommended fox Cit
Council - adopted annual Operating Budgets Pxior to i
be identified to secure repayment of the dcbfpand the
in the Operating
The Cin� shall integral
tithing the issuance of
City's pubpu po "sees
7—
The City is conm'itee
employing prudent .p
intends to issue debt
debt
priorities for projects and funding
oposed financings undertaken to
be incorporated into the Capital
royal and integrated with the City
°bt, a reliable revenue source shall
service payments shall be included
als of its7Capital Improvement program by
available when needed in furtherance of the
TO PLANNING GOALS AND
to long -tert a financial planning, maintaining appropriate reserve levels and
ctices in governance, management and budget administration. The City
or the purposes stated n this Policy and to implement policy decisions
incorporated in the City's
Budget.
It is a policy goal of the City to protect taxpayers, ratepayers (if applicable) and constituents b}
utilizing conservative and prudent financing methods and techniques so as to obtain the highest
practical credit ratings (if applicable) and the lowest practical borrowing costs.
SECTION 8 — INTERNAL CONTROL PROCEDURES
When issuing debt, in addition to complying with the terms of this Policy, the City shall comply with
other applicable policies regarding initial bond disclosure and continuing disclosure such as the
9
City's Continuing Disclosure Policv, and post- issuance compliance and investment of bond
proceeds such as the City's Post - Issuance Compliance Policy. The Ciry will periodically review the
requirements of and will remain in compliance with the following:
• Federal securities law, including any continuing disclosure undertakings under SEC Rule
15c2 -12.
• Any federal tax compliance requirements, including without limitation arbitrage and rebate
compliance, related to any prior bond issues.
• The City's investment policies as they relate to the investment of bond proceeds.
• Government Code Section 8855(k) and the
The City shall be vigilant in using bond proceeds in
such debt was issued. The Director of Financc /City'
original intended use for which the debt has been i�
during the applicable one -year reporting period for
use (at the time of original issuance or as modified p
in intended use has been authorized sub "sequent to
Finance /City Treasurer or designee shall .indicate
authorized and whether the City Council, City Mans
change in intended use. One
report apparent deviations fr,
discussion, and the Gin' flan
with legal counsel (which m;
appropriate times „make repo
project and the< project timch
debt proceeds cannot Ue exp
shall consult with the City M.
the City Attornev) as to avai
(including prepayment of the
or fiscal agent, who will di
submission of one or more r(
by the City, to be held and a
will be carefullv documented
nual r Yong requirements therein.
ccordance with the stated purpose at the time
=Measurer or designee shall keep a record of the
;ued, and indicate whether the proceeds spent
uch annual report comport with the intended
xsnant to the following sentence). IE a change
the original issuance of the debt, Director of
in t7'� record when the change in use was
rer, not her Citv official has authorized the
liscovered, the Director of Finance /City Treasurer or designee shall
the intended use in debt proceeds to the City Manager for further
.r shall detertr ne appropriateness of such deviation in consultation
be bond counsel, if applicable, or the City Attorney), and at such
to the City Council. If the debt has been issued to finance a capital
or scope of project has changed in a way that all or a portion of the
tied on the original project, the Director of Finance /City Treasurer
tger and legal counsel (which may be bond counsel, if applicable, or
le alternatives for the expenditure of the remaining debt proceeds
� 'S Proceeds of debt will be held either by: (a) a third -party trustee
arse• such proceeds to or upon the order of the City upon the
hsitions by the City Treasurer (or her or his written designee), or (b)
?unted for in a separate fund or account, the expenditure of which
the Cm'.
SECTION 9 - AMENDMENT AND WAIVER OF DEBT POLICY
This Pohcy will be reviewed and amended from time to time as appropriate subject to City Council
approval.
There will be circumstances from time to time when strict adherence to one or more provisions of
this Policv is not possible or not in the best interest of the City. If the City staff has determined that
10
a waiver of one or more provisions of this Policv should be considered by the City Council, it will
prepare an analysis for the City Council describing the rationale for the waiver and the impact of
such waiver on the proposed debt issuance, taxpayers, and the City, as and if applicable. Upon a
majority vote of the Citv Council, one or more provisions of this Policy may be waived for a
particular debt financing.
The failure of a debt financing to comply with one or more provisions of this Policy shall in no way
affect the validity of any debt issued by the City in accordance with applicable laws.
SECTION 10 - SB 1029 COMPLIANCE
Senate Bill 1029, signed by Government Brown on S
Statutes of 2016, requires issuers to adopt debt pohci
A.
(i) Section 3 (Acceptable Uses of
proceeds may be used.
N
(i) Section 4 (Types of Debt)
information regarding the t
C.
(i) Section 6
D.
6, and enacted as Chapter 307,
h of the five items below:
addresses the nurooses for which debt
5 (StructuLejand Term of Debt issues) provide
be
ement program and Operating Budget)
ship between the City's debt and Capital
Budget.
(i) Section 2 (Policy Objectivesd Section 7 (Policy Goals Related to Planning Goals and
Objectives) address some of the City's policy goals and how this Policy has implemented
them. As described in these and other sections, this Policv has been adopted to assist the
City with its.goal of maintaining fiscal sustainability and financial prudence.
I "fhe internal control procedures that the issuer has implemented, or will implement to
ensure the proceeds of� he proposed debt issuance will be directed to the intended use.
(i) Section 8 (Internal Control Procedures) provides information regarding the City's
internal control procedures designed to ensure that debt proceeds are spent as intended.
11
STATE OF CALIFORNIA }
COUNTY OF ORANGE } ss
CITY OF SEAL BEACH }
I, Robin Roberts, City Clerk of the City of Seal Beach hereby certify that the
foregoing Resolution No. 6761 was duly adopted at a meeting of the City
Council, held on the 14th day of August, 2017.
Robin L. Roberts, City Clerk