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Adoption of Resolution Approving the City of Alameda Debt Management Policy. (Finance 2410)
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To: Honorable Mayor and Members of the City Council
From: Jill Keimach, City Manager
Re: Adoption of Resolution Approving the City of Alameda Debt Management Policy
BACKGROUND
In September 2016, the Governor Brown signed Senate Bill 1029 (California Debt and Investment Advisory Commission: Accountability Reports) into law. The intent of this bill was to facilitate improved financial transparency and accessibility to information about public debt.
SB 1029 requires that 30 days prior to the issuance of any debt, issuers must adopt a local policy that addresses the following items:
• Purpose for which debt proceeds may be used;
• Types of debt that may be issued;
• The relation of the debt to the issuer’s capital improvement program;
• Policy objectives related to the issuer’s planning goals and objectives; and
• 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.
In addition, all state and local government agencies that issue debt after January 1, 2017, must submit an annual report to the California Debt and Investment Advisory Commission (CDIAC) that includes:
• Debt authorized during the reporting period;
• Debt outstanding during the reporting period; and
• Use of proceeds for debt during the reporting period.
DISCUSSION
The City staff and financing team have been working to refund $9,745,000 of Community Improvement Commission 2011 Tax Allocation Housing Bonds, Subordinate Series A (Taxable) and $995,000 of Community Improvement Commission 2011 Tax Allocation Housing Bonds, Subordinate Series B (Tax-Exempt). Before staff, in coordination with the financing team, can proceed with the refinancing, the City must adopt a debt policy that is consistent with the requirements of SB 1029.
The main objectives of the Debt Policy 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 cost, to maintain the highest possible credit rating, to provide complete financial disclosure and reporting and to maintain financial flexibility for the City.
In addition, the Government Finance Officers Association recommends that it is a best practice for government agency to adopt a debt management policy.
FINANCIAL IMPACT
There is no impact from approval of the Debt Policy. This policy establishes a set of parameters by which debt obligations will be undertaken by the City.
MUNICIPAL CODE
This action is in conformance with the Alameda Municipal Code.
ENVIRONMENTAL REVIEW
This activity is not a project and is exempt from the California Environmental Quality Act (CEQA) pursuant to section 15378 (b)(4) of the CEQA Guidelines. It does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.
RECOMMENDATION
Adopt a Resolution approving the City of Alameda Debt Management Policy.
Respectfully submitted,
Elena Adair, Finance Director
Exhibit:
1. Debt Management Policy