55D - RESO DEBT MGMT POLICY - Laserfiche WebLink

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Debt Management Policy Page 2 a) All debt must: L Be in alignment with the City's Strategic Plan goals & objectives as well as the City's Capital Improvement Plan; H. Promote an economic or public benefit; iii. Provide for economic vitality; iv. Lessen the burden of the City during economic uncertainties; V. Not cause undue burden on the City's General Fund; vi. Extend the useful life of existing assets. b) Any prospective debt issuance must have an identified revenue source for repayment, which may include the general fund, enterprise funds, special revenue funds and/or community development funds; c) A feasibility analysis will also be performed on the fund that has been identified as the source of repayment that includes determining: i. Operating Position (Gain/Loss: Operating revenues less Operating Expenditures); fl. Existing Fund Balance(unassigned/unrestricted) capacity for current and future years; iii. Debt Service Coverage; and iv. Future economic outlook (multi-year forecast or pro forma). d) Evaluating any other material factors, including but not limited to: L Risk of 144tigation or potential litigation: it. Potential negative revenue and expenditure variances; and iii. Compliance to pertinent legislation. Generally, there will be a recommendation to issue debt when: 1) the aforementioned assessment has been completed, 2) if current operational resources are insufficient to finance the project, and 3) when debt financing is the optimal structure given the City's long-term financial outlook. When appropriate, Finance will evaluate the long-term impact of all outstanding and planned debt issuance on the City's finances_ and Will -•-••'a- - •---mmenda•'-- te the City MaAageF. Such evaluation recognizes that the City has limited capacity for debt service in its budget and that each newly issued financing will obligate the City to a series of payments until the debt is repaid. Subsequent to the evaluation. Finance will provide a recommendation for the City Manager's consideration. The City Manager will make the determination to proceed with the issuance of debt, subiect to City Council and, if necessary, voter approval. DEBT LIMITS Types of Financing Options and Use of Debt Proceeds Once it has been determined that issuing debt is a viable and beneficial option, the Santa Ana Issuers can issue the following types of debt under this Policy subject to state and federal law, the City's Charter, City's Municipal Code and City Council Policyies(as approved by the maiority of the City Council as may be applicable: a) general obligation bonds (authorized by the affirmative votes of two-thirds (2/3) of the voters); b) lease revenue bonds or notes; c) certificates of participation; 55D-14 _.... -._. "_ . -.-- —t