Item Coversheet

Agenda Item - 2.a.


City of Garden Grove


INTER-DEPARTMENT MEMORANDUM

To:Lisa L. Kim

From:Patricia Song
Dept.:General Manager 

Dept.: Finance 
Subject:

Adoption of a Resolution amending the Debt Management Policy. (Joint Action Item with the City Council)

Date:4/9/2024

OBJECTIVE

For the Board of the Garden Grove Sanitary District and the City Council to jointly consider the adoption of a resolution amending the City of Garden Grove Debt Management Policy.

BACKGROUND

The Board adopted the current Debt Management Policy (the Policy) pursuant to Resolution No. 3766-17 on January 24, 2017 to comply with state law (SB 1029 – Government Code Section 8855 (i)).  Regularly updated polices and procedures are important tools to ensure the use of the City’s resources to meet its commitments and maintain sound financial management practices.  Staff is now amending the Policy to add sections pertaining to the District's disclosure obligations when issuing new debt, and restructuring the Policy layout for easier reference.  

DISCUSSION

The Policy has been restructured into four sections.  Section One sets the objectives of the Policy, which are to maintain accountability for the fiscal health of the City, enhance transparency of the City’s financing program, attain the best possible credit rating for each debt issue to reduce borrowing costs, select the most cost effective method of debt offering, and preserve financial flexibility and meet capital funding requirements.

 

Section Two covers seven aspects of the policy standards, including the purpose of debt issuance, types of allowable debt, methods of debt offering, issuance costs and fees, debt refunding, debt limits and debt structure.

 

Much of the amendments were included in Section Three, Compliances.  Compliance requirements cover from the use and investment of debt proceeds, arbitrage rebate calculation, post-issuance compliance, and disclosure requirements.  The City must comply with the “anti-fraud rules” of federal securities laws and regulations that are enforced by the Security Exchange Commission (SEC). The proposed amendment ensures that the City continues to comply with all applicable disclosure obligations and requirements and the federal securities laws and is also consistent with best practices as recommended by the Government Finance Officers Association (GFOA) and the California Society of Municipal Finance Officers (CSMFO).

 

The last Section of the Policy provides provisions for City staff to utilize professional services when issuing or refinancing debts.

FINANCIAL IMPACT

The adoption of the resolution to amend the City’s Debt Management Policy does not have a financial impact.  The Policy standardizes the issuance and management of debt by the City and the District, and promotes accountability, transparency, and economic growth of the City.

RECOMMENDATION

It is recommended that the Sanitary District Board of Directors:

 

  • Adopt the attached resolution amending the Debt Management Policy.



ATTACHMENTS:
DescriptionUpload DateTypeFile Name
Attachment 1 - Resolution4/2/2024ResolutionAttachment_1_-_San_District_Resolution_Amending_Debt_Policy.pdf
Attachment 2 - Debt Management Policy4/2/2024ExhibitAttachment_2_-_Debt_Management_Policy_2024.pdf