FINANCIAL POLICIES
Types of Debt Financing
General Obligation Bonds When issuing debt, the City shall strive to use special assessment, revenue, or other self-supporting bonds in lieu of general obligation bonds. General obligation bonds will only be considered when no other funding or financing options are available. All general obligation bonds shall be authorized by the requisite number of voters in order to pass. Short-term Financing The City Council may authorize the issuance of municipal notes, the use of lines of credit, or capital lease arrangements as interim financing mechanisms in anticipation of future revenues at the recommendation of the Finance Commission. This interim financing will only be used when no existing City funding is available to satisfy interim financing needs. Examples of municipal notes include Tax Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes, or Grant Anticipation Notes. Revenue Bonds The City Council may authorize the issuance of revenue bonds as a means of financing capital facilities that will generate sufficient revenues to fully sustain all relevant operational and capital costs. The following criteria will be used to evaluate revenue-backed financing: I. Revenues available for debt service are deemed to be sufficient and reliable so that the bonds can be marketed with investment grade credit ratings. Revenue projections shall be prepared for the entire term of the contemplated bond. II. Market conditions present favorable interest rates and demand for the financing. III. The useful life of the project or asset to be financed is at least equal to the term of the Bonds to be issued. These types of obligations are often structured as Lease Revenue Bonds or Certificates of Participation (COPs). If so structured, debt service shall not exceed the fair rental value of the leased asset for the term of the lease. Land Secured Bonds Land-secured bonds may be issued under the provisions of the Mello Roos Community Facilities Districts Act of 1982 (Commencing with Section 53311 of the Government Code), the Improvement Act of 1911, the Municipal Improvement Act of 1913 for special assessment districts and the Improvement Bond Act of 1915 Act for the issuance of bonds. These bonds become an obligation of the special district and are not an obligation of the City or any of its component units. Conduit Financing The City may sponsor conduit financing for the activities that have a general public purpose and are consistent with the City's stated policy objectives. The City will consider all requests for conduit financing based on the articulated public purpose of the proposed financing, and the applicant ’s ability to achieve such purpose.
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FY 2023-25 Adopted Budget
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