55D - RESO DEBT MGMT POLICY - Laserfiche WebLink

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Debt Management Policy Page 3 d) land -secured financings, such as special tax revenue bonds and/or limited obligation assessment bonds; e) tax increment financings to the extent permitted under state law; f) private placement and/or private loan financing g) conduit financings, whereby the City secures financing on behalf of a third party h) financings for affordable housing (TEFRA) and qualified 501 (c) (3) organizations (access to tax- exempt financing); and i) any other or new type of debt that is allowed under new state or federal law. Debt may be publicly issued or privately placed and may be issued on either a long-term basis ("Long- term Debt") or short-term basis ("Short-term Debt") consistent with the provisions of this Policy. Long-term debt, defined as a final maturity date greater than five years from the issuance date, may be used to finance the acquisition or improvement of land, facilities, or equipment that cannot be financed from current revenues and is appropriate to spread the costs over more than one fiscal year, and will be reflected in the Adopted Citywide Budget as well as the Seven -Year Capital Improvement Plan ("CIP"), if applicable. Long-term debt may also be used to fund capitalized interest (for no longer than a three-year period), costs of issuance, required reserves, and any other financing -related costs which is legally permitted. Under no circumstance shall long-term debt be allowed to fund annual reoccurring operating costs or routine maintenance expenses. Shan -term debt, defined as a final maturity date less than five years from the issuance date, through financing vehicles will be considered as an interim source of funding for the acquisition of equipment, funding for a capital improvement in anticipation of long-term borrowing, or any other purpose in which issuing long-term debt is not a viable option, provided that there is sufficient reason to pursue a short- term debt issuance. Short-term debt may also be issued for capitalized interests and other financing - related costs. The final maturity of the debt issued to finance the project shall be consistent with the useful life of the project, unless it is determined that extraordinary circumstances exist. In addition, short-term debt may be considered if available cash is insufficient to meet short-term operating needs. Debt Restrictions The Santa Ana Issuers will keep outstanding debt within the limits of applicable federal and state law. Specifically and in accordance with section 602 of the City Charter, the Issuers'total general obligation bond indebtedness shall not exceed 10 percent of the "total assessed value of real property within the City_'. As such, the City will keep outstanding general obligation debt within the specified limits. The Successor Agency, in particular, will issue debt to refund its outstanding debt consistent with applicable law. More specifically, in the event that the City issues: a. a general obligation bond: the debt service payments, in the aggregate, shall not exceed 10% of General Fund revenues; b. a lease revenue bond or certificates of participation: the debt service payments shall be limited by a debt service coverage ratio (e.g., annual net pledged revenue to annual debt 55D-15