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Agenda Item 30.

City Council Meeting

Meeting Date:	06/18/2019
FROM:	Bill Gallardo

Subject:

Update to City's Local Debt Policy

RECOMMENDATION

Adopt the Resolution updating the City's Local Debt Policy.

BACKGROUND/DISCUSSION

The City of Brea has included in its annual operating budget a section for Fiscal Policy Statements which includes both short-term and long-term debt obligations. These debt policies are applicable to the City of Brea incurring obligations solely within its control such as the issuance of bonds or entering into capital lease agreements. Additionally, the City of Brea also has long standing debt management practices, such as bond payment coverage, sufficiency of reserves, records retention, continuing disclosure compliance, etc. In addition, City staff continually monitor bonds for opportunities to refund (refinance) existing bonds to lower future bond payments.

On June 6, 2017, the City Council adopted the City's Local Debt Policy. The Local Debt Policy incorporated the City's current fiscal policies and practices to comply with Government Code Section 8855 (i), which became effective January 1, 2017. The City's Local Debt Policy did not change any of the City's existing policies and practices and preserves the flexibility for the City in managing its debt. The adoption of City's Local Debt Policy was required prior to the City issuing any new debt obligations on or after January 1, 2017. It is also noted that the City's Local Debt Policy does not pertain to pension and any employee benefit obligations.

The proposed updating of the City's Local Debt Policy is to incorporate compliance procedures in connection with the City's undertaking of continuing disclosure obligations pursuant to Rule 15c2-12 (Municipal Securities Disclosure Rule) promulgated by the U. S. Securities and Exchange Commission under the Securities Exchange Act of 1934, including amendments to the Municipal Securities Disclosure Rule which became effective on February 27, 2019.

COMMISSION/COMMITTEE RECOMMENDATION

The Finance Committee reviewed this staff report at its regular meeting held on June 11, 2019, and recommended the resolution be forwarded to Council for approval.

FISCAL IMPACT/SUMMARY

There is no fiscal impact with the adoption of updating of City's Local Debt Policy.

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Lee Squire, Financial Services Manager
Concurrence: Cindy Russell, Administrative Services Director

Attachments
Resolution