FINANCIAL POLICIES
All conduit financing must insulate the City completely from any credit risk, and financial or legal exposure. The City may, at its sole discretion, require additional protections including but not limited to asset appraisals, financial audits, and additional security to ensure that the Ci ty’s interests will be appropriately protected.
The City may charge a fee for sponsoring conduit financing activities based on the specifics of the financing in order to recover staff time and overhead.
The City may elect to participate in other conduit type financings that are administered by another local, regional, or statewide government agency or financing authority, and if it is determined to be in the best interest of the City with no liability or risk. Refunding Bonds Periodic reviews of all outstanding debt will be undertaken by the City’s finance team to determine refunding (refinancing) opportunities. The purpose of refinancing may be to:
I.
Achieve or monetize debt service savings.
II.
Update or revise covenants on an outstanding debt issue. Restructure debt service associated with an issue.
III.
IV. Change debt characteristics such as call provisions or payment dates.
Generally, the City will strive to achieve a minimum of five percent net present value savings of the refunded debt, net of cost of issuance. A higher minimum threshold for savings may be considered in the case of advance refunding.
Compliance
Pre-issuance Compliance Senate Bill No. 1029 requires issuers of debt of state or local government to submit reports to the California Debt and Investment Advisory Commission (CDIAC), within specific timeframes, of the proposed issuance of debt. The Report of Proposed Debt shall include a certification that the City has adopted a debt policy, which includes specified provision concerning the use of debt, and that the proposed debt issuance is consistent with the policy. The Report of Proposed Debt shall be filed with CDIAC in a timely fashion. In addition, the City shall periodically update this policy to ensure provisions concerning the use of debt continue to meet the City’s needs. Investment of Proceeds The City shall comply with all applicable Federal, State and contractual restrictions regarding the investment of bond proceeds. This includes compliance with restrictions on the types of investment securities allowed, restrictions on the allowable yield of invested funds, as well as restriction on the time period over which the proceeds may be invested.
FY 2023-25 Adopted Budget
471
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