In September 2016, the Governor signed Senate Bill (SB) 1029 (California Debt and Investment Advisory Commission:  Accountability Reports) into law. Senate Bill 1029 requires issuers of public debt to adopt a Debt Management Policy to provide guidance in the issuance and management of their debt. Effective January 1, 2017, Government Code section 8855(i) requires any issuer of public debt to provide the California Debt and Investment Advisory Commission (CDIAC), no later than 30 days prior to the sale of any debt issue, a report of the proposed issuance which includes notification to CDIAC that the issuing agency has adopted debt policies concerning the use of debt and that the proposed debt is consistent with those policies.  

The intent of this bill was to facilitate improved financial transparency and accessibility to information about public debt.  SB 1029 requires that debt management policies reflect local, state, and federal laws and regulations.  It was recommended that public agency debt management policies incorporate recommendations set forth by the Government Finance Officers Association (GFOA). The attached Debt Management Policy is being brought forward to City Council to comply with state law as it relates to debt issuance requirements set forth by SB 1029. The Debt Management Policy will apply to the City, the Successor Agency to the Garden Grove Agency for Community Development, the Garden Grove Sanitary District, the Garden Grove Housing Authority, the Garden Grove Public Financing Authority, or any other public agency or non-profit public benefit corporation affiliated with the City.

To comply with the new law, it is recommended that the Sanitary District adopt a comprehensive debt management policy.  The proposed Debt Management Policy is consistent with Government Code section 8855(i) requirements and is also consistent with GFOA’s recommendations and reflects objectives that establish parameters for the issuance and administration of Sanitary District debt.

SB 1029 sets out key objectives that should be incorporated in a Debt Management Policy. The objectives are to:

·         Minimize debt service and issuance costs

·         Maintain access to cost-effective borrowing

·         Achieve and maintain highest reasonable credit rating

·         Full and timely repayment of debt

·         Maintain full and complete financial disclosure and reporting

·         Ensure compliance with state and federal laws and regulations

By adopting the Resolution to approve this Debt Management Policy the Sanitary District will comply with the key objectives of SB 1029.

None.

It is recommended that the Sanitary District:

• Adopt the Resolution approving the Debt Management Policy as required by Senate Bill 1029.

It is recommended that the City Council:

• Adopt the Resolution approving the Debt Management Policy as required by Senate Bill 1029.

By:  Alex Trinidad, Sr. Accountant