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Adoption of Resolution Relating to the Securities and Exchange Commission Municipalities Continuing Disclosure Cooperation Initiative. (Finance 2410)
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To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Adoption of Resolution Relating to the Securities and Exchange Commission Municipalities Continuing Disclosure Cooperation Initiative.
BACKGROUND
Approximately 20 years ago, the Securities and Exchange Commission adopted Rule 15c2-12 (the "Rule") which requires municipalities issuing bonds to proactively inform the marketplace of their annual financial results. As bonds were issued, cities regularly included in the bond documents a Continuing Disclosure Agreement. By this agreement, cities were required to provide the market place with city-related financial results, forecasts and other operating data. During the first 13 years, there were a variety of agencies and websites competing to become the "one stop" shop for public agencies to file the documents required by the Continuing Disclosure Agreements.
The economic uncertainties of the recent past led the Municipal Securities Rulemaking Board to establish a website (Electronic Municipal Market Access, EMMA) to host the required filings under all public agency Continuing Disclosure Agreements. The Securities and Exchange Commission then announced a Municipalities Continuing Disclosure Cooperation Initiative (MCDC) in order to secure compliance among all municipal bond issuers. The MCDC Initiative allows issuers to self-report by December 1, 2014 any instances where compliance had been reported but in fact full compliance did not occur.
DISCUSSION
In an effort to comply with the MCDC initiative, a complete review of all debt issued by the City of Alameda, the former Community Improvement Commission, Alameda Public Finance Authority and Alameda Municipal Power (as well as Alameda Power & Telecom) was conducted. A comparison of each bond issue's Continuing Disclosure requirements with actual documents filed was conducted. As a result of this review, it was determined that with nine of the existing twenty two issues there were late filings of annual financial reports and/or insufficient reporting of required operating data. A list of those bond issues where such instances occurred is attached as Exhibit A to the resolution.
In the interest of meeting the deadline for this MCDC Initiative, the report was timely filed with the Securities and Exchange Commission. Without this filing, individual employees could have been subject to securities fraud under the regulatory authority of the Securities and Exchange Commission. Adoption of this resolution will ratify the staff's action in filing the self-report under the MCDC Initiative.
FINANCIAL IMPACT
There is no financial impact to the General Fund as a result of adopting this resolution.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
By resolution, the City Council has adopted a policy and process for the implementation of continuing disclosure.
ENVIRONMENTAL REVIEW
This action (financial activity) is not subject to CEQA review.
RECOMMENDATION
Adopt Resolution Relating to the Securities and Exchange Commission Municipalities Continuing Disclosure Cooperation Initiative
Respectfully submitted,
Juelle-Ann Boyer, Interim Finance Director