03.20 Debt Issuance and Management Policy1. SUBJECT
Resolution No. 11072 — a resolution of the City Council of the City of Orange adopting a Debt
Issuance and Management Policy (the "Debt Policy ").
2. SUMMARY
Senate Bill 1029 ( "SB 1029 "), which became effective January 1, 2017, amended Government
Code Section 8855. Among other things, SB 1029 effectively requires a local government agency
to adopt a formal local debt policy before issuing bonds.
The City and its related entities (such as the Successor Agency to the Orange Redevelopment
Agency) have issued bonds from time to time. The City Council, acting as the Governing Board
of the Successor Agency, is considering separately a resolution authorizing the Successor
Agency's issuance of refunding bonds. The City and its related entities will likely issue additional
bonds in the future, when the City deems it prudent and appropriate to do so. Staff recommends
that the City Council approve the proposed Debt Policy, to formally establish guidelines for the
City's future bond issuances (and the administration of bond records, reporting obligations and
bond proceeds expenditures) and comply with the requirements of SB 1029.
3. RECOMMENDATION
Adopt Resolution No. 11072.
4. FISCAL IMPACT
None.
5. STRATEGIC PLAN GOAL(S)
2. Be a fiscally healthy community
a. Expend fiscal resources responsibly
6. GENERAL PLAN IMPLEMENTATION
Not applicable.
7. DISCUSSION and BACKGROUND
Background
Pursuant to Government Code Section 8855, a Report of Proposed Debt Issuance must be filed
with the California Debt and Investment Advisory Commission ( "CDIAC ") before the sale of any
bond issue. Usually, Bond Counsel makes these filings on behalf of the City.
SB 1029 was signed into law on September 12, 2016. Among other things, SB 1029 imposes a
new requirement that each Report of Proposed Debt Issuance must include the issuer's certification
that it has adopted a local debt policy and that the contemplated bond issue is consistent with such
adopted policy.
The City currently does not have a formal written debt policy pertaining to the issuance of bonds
and the maintenance of bond - related records.
Discussion
SB 1029 provides that the local debt policy must include the following:
1. The purpose for which the debt proceeds may be used;
2. The types of debt that may be issued;
The relationship of the debt to, and integration with, the issuer's capital
improvement program or budget, if applicable;
4. Policy goals related to the issuer's planning goals and objectives; and,
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.
The Debt Policy has been drafted in furtherance of the City's goals of fiscal sustainability and
financial prudence. It sets forth formal written guidelines for the City's bond issuances and the
administration of bond records, reporting obligations and bond proceeds expenditures. It contains
provisions that reflect the City's current practices and comply with the requirements of SB 1029.
ITEM 2 4/10/18
8. ATTACHMENTS
• Resolution No. 11072
• Exhibit A to Resolution -- Debt Issuance and Management Policy
ITEM 3 4/10/18
RESOLUTION NO. 11072
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ORANGE ADOPTING A DEBT ISSUANCE AND
MANAGEMENT POLICY
WHEREAS, California Government Code Section 8855(1) (the "Government Code ")
requires an issuer of public debt to provide to the California Debt and Investment Advisory
Commission no later than 30 days prior to the sale of any debt issue a Report of Proposed Debt
Issuance; and
WHEREAS, effective January 1, 2017, an issuer must certify on the Report of Proposed
Debt Issuance that it has adopted a local debt policy concerning the use of debt and that the
proposed debt issuance is consistent with such debt policy; and
WHEREAS, the issuer's local debt policy must include certain items specified in the
Government Code; and
WHEREAS, Staff has prepared a proposed form of Debt Management and Issuance Policy
(the "Policy ") which meets the criteria identified in the Government Code;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange as
follows:
1. The City Council hereby approves and adopts the Policy, in the form attached hereto as
Exhibit "A." The Policy shall be applicable to bonds or other financing obligations issued
by or on behalf of the City or its related entities (such as the Successor Agency to the
Orange Redevelopment Agency).
2. The City Manager, the Finance Director 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.
3. This Resolution shall take effect from and after the date of its passage and adoption.
Adopted this 10th day of April, 2018.
Teresa E. Smith
Mayor of the City of Orange
ATTEST:
Mary E. Murphy
City Clerk of the City of Orange
CITY COUNCIL MINUTES APRIL 10, 2018
3. CONSENT CALENDAR (Continued)
3.18 Purchase twenty (20) Scott X380 Thermal Imaging Cameras and accessories from
Allstar Fire Equipment, Inc. for $138,970.58. (C2500.H)
ACTION: Authorized the purchase of 20 Scott X380 Thermal Imaging Cameras and
accessories from Allstar Fire Equipment, Inc. for a total of $138,970.58.
3.19 Dissolution of the Countywide Public Financing Authority. Resolution No. 11070.
(OR1800.0.3.22)
A Resolution of the City Council of the City of Orange approving the dissolution of the
Countywide Public Financing Authority.
ACTION: Approved Resolution No. 11070.
3.20 Approval of a Debt Issuance and Management Policy. Resolution No. 11072.
(C2500.J)
A Resolution of the City Council of the City of Orange adopting a debt issuance and
management policy.
ACTION: Approved Resolution No. 11072.
3.21 Approval of the proposed List of Streets for the Road Maintenance and
Rehabilitation Account (RMRA) Funding Program, FY 2018 -19. Resolution No.
11073. (S4000.S.7)
A Resolution of the City Council of the City of Orange approving the proposed List of
Streets (Attachment "A ") for the Road Maintenance and Rehabilitation Account (RMRA)
Funding Program, FY 2018 -19 and adjust the City's budget to properly track the
expenditure of these funds.
ACTION: Approved Resolution No. 11073.
MOTION — Whitaker
SECOND — Alvarez
AYES — Alvarez, Whitaker, Smith, Murphy, Nichols
Councilmember Nichols recorded an abstention on Item 3.4. All other items on the
Consent Calendar were approved as recommended.
END OF CONSENT CALENDAR
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