Loading...
HomeMy WebLinkAboutCC Res 6761 2017-08-14RESOLUTION 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 Isspanpe ") 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(i)(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(i)(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: Massa- Lavitt, Deaton, Sustarsic, Moore , NOES: Council Members: None ABSENT: Council Members: Varipapa ABSTAIN: Council Members: None �p{/ Sandra Massa- Lavitt, Mayor ATTEST: Robin L. Roberts, City Clerk 1 -2- EXHIBIT A Debt Issuance and Management Policy (see attached) 1 1 °,` "`�` CITY OF SEAL BEACH Debt Issuance and Management Policy SECTION 1- PURPOSE ' The purpose of this Debt Issuance and Management Policy (this "Policy') is to provide written guidelines for issuing debt and managing outstanding debt and to provide guidance to policy makers regarding the timing and purposes for which debt may be issued, types and amounts of permissible debt, and method of sale that may be used. Adherence to a debt policy helps to ensure the City's debt is issued and managed prudently in order to maintain a sound financial position and optimal credit ratings. The debt polities 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, financing leases, 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 obligation fall within exceptions to the constitutional debt limitation. This Policy shall apply to all debt issued or sold to thud party lenders or investors and does not pertain to City internal interfund borrowings or any employee benefit obligations. This Policy is intended to comply with the requirements of S.B. 1029, codified as part of Government Code Section 8855 (i), effective on January 1, 2017. This Policy is applicable to the City of Seal Beach and its related entities, such as the Successor Agency to the Seal Beach Redevelopment Agency, the Seal Beach Public Financing Authority, and the City's various Community Facilities Districts. Herein, the term "City" shall refer to shall mean the City and /or the City and its related entities, as the context may requite. SECTION 2 - POLICY OBJECTIVES The City recognizes that a fiscally prudent debt issuance and management policy is required in order to: • 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 growth and enhances the vitality of the City of Seal Beach for its residents and businesses. SECTION 3- ACCEPTABLE USES OF DEBT PROCEEDS The City will consider the use of long -term debt financing primarily for the acquisition, substantial refurbishment, replacement, or expansion of capital assets and capital improvement projects only if the project's useful life will equal or exceed the term of the financing or will otherwise comply with Federal tax law requirements, or for the purpose of refunding, refinancing or restructuring debt (including the City's pension obligations), subject to refunding parameters and objectives discussed later in this Policy. Examples of purposes for which long -term debt can be issued include, but are not limited to, the acquisition and /or improvement of land, right -of -way or long-term, easements; ' acquisition of a capital asset with a useful life of a minimum of three years; and the construction or reconstruction of a facility. An exception of this long -term driven focus is the issuance of short-term instruments such as tax and revenue anticipation notes, which are to be used for prudent cash management purposes, as described below. 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 operating cost savings and such savings are verified by independent analysis. A. Long -Term Debt (i) Long -term debt may be issued to finance or refinance the construction, acquisition, substantial refurbishment, rehabilitation, replacement or expansion of capital assets such as improvements and facilities, equipment and land to be owned and /or operated by the City. Long -tern 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 City 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 allocated to the project will not exceed 120% of the average reasonably expected economic life of the project being financed. • The City estimates that sufficient income and revenues will be available to service the debt through its maturity. • The City determines that the debt issuance will comply with the applicable requirements of state and federal law. ' • The City considers the project to be of vital, time- sensitive need of the community and there are no plausible alternative financing sources after considering other financial alteratives, such as pay -as -you -go funding, the use of grants or existing funds on hand, current or anticipatedicash reserve balances, or any combination thereof. (iv) The City will undertake periodic reviews of outstanding long -term debt to identify refunding opportunities. Refundings will be considered (within the federal tax law constrains, if applicable) if and when there is a net economic benefit from the refunding. 2 Refundings which are non - economic may be undertaken to achieve City objectives related to changes in covenants, call provisions, operational flexibility, tax status of the issuer, or restructuring of the debt service profile. In general, refundings resulting in a minimum of three percent (3 0/6) net present value savings of the refunded debt will be considered economically viable. Refundings producing less than 3% net present value savings will be considered on a case -by -case basis, and are subject to City Council approval. B. Short-Term Debt (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. (in) Prior to issuance of any short-term debt, a reliable revenue source shall be identified for repayment of the debt. C. Finaticini 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 the public, the City will 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 -term revenue and expenditure trends and its ability to support and service additional debt payments. A. General Ob lion (GO) Bonds (i) GO Bonds are suitable for use in the construction or acquisition of improvements to real property that benefit the public at large. Examples of projects include libraries, parks, and public safety facilities. All GO bonds shall be authorized by the requisite number of voters in order to pass. B. Revenue Bonds (i) Revenue Bonds are limited- liability obligations tied to a specific enterprise or special fund revenue stream where the projects financed clearly benefit or relate to the enterprise or are otherwise 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 adjustments. Examples of this type of bonds include Water Revenue Bonds, Wastewater or 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 entity and, in tum, the public entity uses the lease payments received by the City to pay debt service on the COPS or the LRBs. (h) 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. (iii) To avoid a violation of the State constitutional debt limit, payments to be made under valid leases axe payable only in the yen 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 in be equal to ox greater than the required debt service or lease payment schedule. The lessee (the City) is obligated to include in its Annual Budget and appropriate the rental payments that are due and payable during each fiscal yen the lessee has use of the leased property. (1) Land - Secured Debt is generally comprised of special assessment /special tax debt issued under the Mello -Roos Community Facilities Act of 1982, as amended, by special districts such as Community Facilities Districts (CFDs) and limited obligation bonds issued under applicable assessment statutes by 1913/1915 Act Assessment Districts (ADs). As of the date of this policy, the City's special districts consist of Heron Pointe CFD No. 2002 -01 and Pacific Gateway Business Center CFD No. 2005 -01. (ii) The City will consider requests for special district formation and debt issuance secured by property based assessments or special taxes in order to provide necessary infrastructure for new development under guidelines adopted by City Council (the Statement of Local Gosh and Policies), which may include minimum value -to -lien ratios and debt service coverage, and maximum tax burdens. Each application will be considered on a case by case basis. In order to protect bondholders as well as the City's , creditworthiness, the City will also comply with all State guidelines regarding the issuance of special tax or special assessment debt. E. Tax Increment Financing (i) Tax Increment Financing provides 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 financing 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 (EIFDs) 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 (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 financing 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 Financing 4 (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 funding in anticipation of long -term borrowing or receipt of revenues and may be issued to generate funding for cash Bow needs. The final maturity of the debt issued to finance the project shall be consistent with the useful life of the project. (ii) In compliance with applicable State law, any such notes shall be payable either not later than the last day of the fiscal year in which they are issued or during the fiscal year succeeding the fiscal year of issuance, but in no event later than 15 months after the issuance date, and only if such notes are payable only from revenue received or seemed during the fiscal year in which they were issued. (iii) Short-term debt may also be used to finance short-lived capital projects, such as equipment or lease- purchase financing. H. joint Powers Authority OPA) Financing with Other Local Governments (i) In addition to some of the long and short 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. I. Refunding Bonds (i) The City shall refinance debt pursuant to the authorization that is provided under California law, including but not limited to Articles 10 and 11 of Chapter 3 of Par 1 of Division 2 of Title 5 of the California Government Code, as market opportunities arise. The Director of Finance /City Treasurer sball 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. Restructure debt to lengthen the duration of repayment, relieve debt service spikes, reduce volatility 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 City may 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 reason that a variable one issue would be beneficial to the City in a specific circumstance. SECTION 5 - STRUCTURE AND TERM OF DEBT ISSUES The City will establish all terms and conditions related to the issuance of debS and will control, manage, and invest all debt proceeds. The following restrictions will be followed unless otherwise authorized by the City. A. Term of Debt (i) Debt will be structured for the shortest practicable period, consistent with a fan allocation 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 life of the projects or equipment being financed, unless there 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 tax- exempt status of such debt, if applicable. ' B. Debt Reopument 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 City 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. (it) The City will generally seek to structure debt with aggregate level annual debt service payments over the life of the debt. Structures with unlevel debt service will be considered when one or more of the following exist: • Natural disasters or extraordinary 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 more closely match project revenues. C. Bond Maturity lions ' (i) For each bond issuance, the City will select serial bonds or term bonds, or both. On occasions where circumstances warrant, capital appreciation bonds (CABs) may be used. The decision to use serial bonds, term bonds or CABs or any combination is typically based on market conditions and investor demand. D. Credit Enhancement (i) Credit enhancement may be used to improve or establish a credit rating on a City debt obligation. Types of credit enhancement include letters of credit, bond insurance and surety policies. The City's municipal advisor may recommend the use of a credit enhancement if it reduces the overall cost of the proposed financing or if the use of such credit enhancement furthers the City's overall financing objectives. E. Debt Service Reserve Fund (i) Debt service reserve funds are typically held by the bond trustee or fiscal agent to make principal and interest payments to bondholders in the event that pledged revenues are insufficient to do so. The City will fund debt service reserve funds when it is in the City's overall best financial interest. (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. (iii) 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 /City Treasurer, assisted by the City's municipal advisor, detern Ines there would be no adverse impact on the City's credit rating or interest rates. 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- callable debt. The use of a call option will be evaluated and tecommended on a case by case basis. SECTION 6 - RELATIONSHIP TO CAPITAL IMPROVEMENT PROGRAM AND OPERATING BUDGET The City's multi-year Capital Improvement Program (CIP) sets priorities for projects and funding while this Debt Policy provides direction and limitations for proposed financings undertaken to implement the CIP. Debt issuance for capital projects should be incorporated into the Capital Imptovement Program to be recommended for City Council approval and integrated with the City Council - adopted annual Operating Budget. Prior to issuance of debt, a reliable revenue source shall be identified to secure repayment of the debt and the annual debt service payments shall be included in the Operating Budget. The City shall integrate its debt issuances with the goals of its Capital Improvement program by ' tinting the issuance of debt to ensure that projects are available when needed in furtherance of the City's public purposes. SECTION 7 - POLICY GOALS RELATED TO PLANNING GOALS AND OBJECTIVES The City is committed to long -temr financial planning, maintaining appropriate reserve levels and employing prudent practices in governance, management and budget administration. The City intends to issue debt for the purposes stated in this Policy and to implement policy decisions incorporated in the City's annual Operating Budget. It is a policy goal of the City to protect taxpayers, ratepayers (if applicable) and constituents by 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 City's Continuing Disclosure Policy, and post - issuance compliance and investment of bond ' proceeds such as the City's Post - Issuance Compliance Policy. The City 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 annual reporting requirements therein. The City shall be vigilant in using bond proceeds in accordance with the stated purpose at the time such debt was issued. The Director of Finance /City Treasurer or designee shall keep a record of the original intended use for which the debt has been issued, and indicate whether the proceeds spent during the applicable one -year reporting period for such annual report comport with the intended use (at the time of original issuance or as modified pursuant to the following sentence). If a change in intended use has been authorized subsequent to the original issuance of the debt, Director of Finance /City Treasurer or designee shall indicate in the record when the change in use was , authorized and whether the City Council, City Manager, or another City official has authorized the change in intended use. Once discovered, the Director of Finance /City Treasurer or designee shall report apparent deviations from the intended use in debt proceeds to the City Manager for further discussion, and the City Manager shall determine appropriateness of such deviation in consultation with legal counsel (which may be bond counsel, if applicable, or the City Attorney), and at such appropriate times, make reports to the City Council. If the debt has been issued to finance a capital project and the project timeline or scope of project has changed in a way that all or a portion of the debt proceeds cannot be expended on the original project, the Director of Finance /City Treasurer shall consult with the City Manager and legal counsel (which may be bond counsel, if applicable, or the City Attorney) as to available alternatives for the expenditure of the remaining debt proceeds (including prepayment of the debt). Proceeds of debt will be held either by: (a) a third -party trustee or fiscal agent, who will disburse such proceeds to or upon the order of the City upon the submission of one or more requisitions by the City Treasurer (or her or his written designee), or (b) by the City, to be held and accounted for in a separate fund or account, the expenditure of which will be carefully documented by the City. SECTION 9 - AMENDMENT AND WAIVER OF DEBT POLICY This Policy will be reviewed and amended from time to time as appropriate subject to City Council ' approval. There will be circumstances from tune to tune when strict adherence to one or more provisions of this Policy is not possible or not in the best interest of the City. If the City staff has determined that a waiver of one or more provisions of this Policy 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 City 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 September 12, 2016, and enacted as Chapter 307, Statutes of 2016, requires issuers to adopt debt policies addressing each of the five items below: 4�' o• u:. (i) Section 3 (Acceptable Uses of Debt Proceeds) addresses the purposes for which debt ' proceeds may be used. B. The types of debt that mad be issued (i) Section 4 (Types of Debt) and Section 5 (Structure and Term of Debt Issues) provide information regarding the types of debt that may be issued. C. The relationship of the debt to and integration with the issuer's capital improvement orogmm or budget if applicable. (i) Section G (Relationship to Capital Improvement program and Operating Budget) provides information regarding the relationship between the City's debt and Capital Improvement Program and annual Operating Budget. D. Policy goals related to the issuer's planning goals and objectives. (i) Section 2 (Policy Objectives) and 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 Policy has been adopted to assist the ' City with its goal of maintaining fiscal sustainability and financial prudence. E. The internal control procedures that the issuer has implemented. or will implement. to ensure the proceeds of the 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. I� 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 Roberts, — so