2018-009 - City of Santa Santa Ana Debt Management Policy

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jmf 1/29/18 ®EBT LIMITS Types of Financing Options and Use of Debt Proceeds Once it has been determined that Issuing debt is a viable and beneficial caption, 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 Policy (as approved by the majority 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; d) land -secured financings, such as special tax revenue bonds and/or limited obligation assessment bonds, e) tax increment financings to the extent permitted understate 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 1) any other or new type of debt that is allowed under 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 greaterthan 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, Short-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, orany 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. Resolution No. 2018-009 Page 5 of 9