HomeMy WebLinkAbout05 - CC-5 - City Council Resolution Adopting Debt - 9/5/2017CITY COUNCIL AGENDA REPORT
MEETING DATE: September 5, 2017 ITEM NUMBER: CC -5
SUBJECT: CITY COUNCIL RESOLUTION ADOPTING A DEBT MANAGEMENT POLICY
IN COMPLIANCE WITH GOVERNMENT CODE SECTION 8855 (i), AS
AMENDED AND EFFECTIVE JANUARY 1, 2017
DATE: August 15, 2017
FROM: THOMAS R. HATCH, CITY MANAGER
THOMAS P. DUARTE, CITY ATTORNEY
STEPHEN DUNIVENT, INTERIM FINANCE DIRECTOR/TREASURER
PRESENTATION BY: STEPHEN DUNIVENT, INTERIM FINANCE
DIRECTOR/TREASURER
FOR FURTHER INFORMATION CONTACT: Stephen Dunivent at (714) 754-5243
RECOMMENDATION:
The City Council adopt Resolution No. 17- adopting a Debt Management Policy as required
by and in compliance with Government Code Section 8855(1), as amended and effective January
1, 2017.
BACKGROUND:
In 1981 the California Legislature established the California Debt Advisory Commission as the
State's clearinghouse for public debt issuance information and required it to assist state and
local agencies with the monitoring, issuance and management of public debt. In 1996 the
Legislature changed the name to the California Debt and Investment Advisory Commission
(CDIAC) and expanded its mission to cover public investment and to provide information,
education and technical assistance on debt issuance and public fund investments to local
agencies and public finance professionals.
In September 2016 the Legislature enacted Senate Bill 1029 which became effective January
1, 2017, which further amended the CDIAC requirements. In particular, Government Code
Section 8855(i) was amended to require that all governmental entities establish a
Debt Management Policy ("Debt Policy") if any form of debt is being contemplated or
anticipated to be issued by the entity. Attachment No. 3 contains the text of the new
legislation.
DISCUSSION:
Government Code Section 8855(i), as amended by SB 1029, requires:
• CDIAC to track and report on all state and local outstanding debt until fully repaid or
redeemed.
• The report of proposed debt include a certification by the issuer that it has adopted
local debt policies, which include specified provisions concerning the use of debt and
that the contemplated debt issuance is consistent with those local debt policies.
• A state or local public agency to submit an annual report for any issue of debt.
The City's Finance staff, financial advisor Fieldman, Rolapp & Associates, Inc., and special
counsel Stradling Yocca Carlson & Rauth have prepared the City's proposed Debt Policy
(Attachment No. 2) for City Council consideration and approval as required by CDIAC, which
meets all of the requirements of SB 1029, yet preserves flexibility for the City in managing its
debt.
As presented in the proposed Debt Policy, the primary objectives of the City's debt and
financing -related activities are to:
a) Maintain the City's sound financial position;
b) Ensure the City has the flexibility to respond to possible changes in future service
obligations, revenues, and operating expenses;
c) Ensure that all debt is structured in order to protect both current and future taxpayers,
ratepayers and constituents of the City;
d) Minimize debt service commitments through efficient planning and cash management;
e) Protect the City's credit worthiness and achieve the highest practical credit ratings,
when applicable; and
f) Ensure the City is in compliance with all relevant State and Federal securities laws and
other applicable laws and regulations.
Establishing this new Debt Policy is timely and a necessary part of the City undertaking the
proceedings to refund the 2007 Certificates of Participation and to issue the 2017 lease
revenue bonds, which are important components of the financing plan for construction and
completion of the Lions Park public improvement projects. Thus, it is now timely and
necessary for the City Council to consider and adopt a debt management policy that meets
the requirements of Government Code section 8855(i), as amended by SB 1029. The Debt
Policy presented with this agenda report meets these State Law requirements, while, as
noted, also preserves flexibility for the City in the management of its debt.
14
FINANCE AND PENSION ADVISORY COMMITTEE (FiPAC) REVIEW:
The FiPAC was provided a draft of the Debt Management Policy on July 12, 2017. City Staff
received and responded to the comments and suggestions of the FiPAC. The suggestions
are listed below, which includes the incorporation of some suggestions and reasons for not
incorporating others. The staff recommendations were discussed with the FiPAC on August
9, 2017.
Page/Section
Finance and Pension Advisory
Committee Edits
City Staff Recommendations
Page 1
FiPAC suggests the deletion of
City Staff does not recommend
making any edits to this Section
Section 2
"... including the City's seven-year
Capital Improvement Program".
as this statement is critical to the
rating agency and the City's
overall ability to receive a higher
credit rating.
Page 1
FiPAC suggests the addition of
City Staff recommends a partial
Section 3, A
"...and maintain at least a credit
accommodation, which has been
rating of at least A1...".
edited to read, "The City will strive
to maintain at least a credit rating of
"A" on the S&P credit scale. "
Page 2
FiPAC suggests the deletion of
City Staff recommends
Section 4, A, ii, 1
11 ... orwill be considered and...".
Page 4
FiPAC suggests the addition of
City Staff recommends
Section 6, A, ii
"public services", to the list of
examples
Page 5
FiPAC suggests the addition of
City Staff recommends
Section 6, H, ii
"However, the other form or forms
of debt must comply with this Debt
Policy" to the end of Paragraph 2.
Page 6
FiPAC suggests the replacement
City Staff does not recommend
any edits to this Section as the
Section 8, A, iii
of language from "reduce" to
"prudently manage" unfunded
City Staff believe that the
pension liabilities.
proposed is weaker language than
as it presently exist.
Page 7
FiPAC suggests the replacement
City Staff does not recommend
any edits to this Section as the
Section 10
of the last sentence to A super
Paragraph 2
majority vote by the City Council
City Staff believe that a "majority"
must be obtained to waive one or
is required and sufficient.
more provisions of this Debt
Management Policy. "
3
ALTERNATIVE CONSIDERED:
The City Council could choose not to adopt the attached Resolution establishing the City's
Debt Policy and direct staff to revise the draft policy. However, in order to issue debt, a
governmental entity must establish a debt management policy as mandated by State law and
the proposed Debt Policy meets these legal requirements and allows the proceedings toward
issuance of the Lions Park bonds to continue on schedule.
FISCAL IMPACT:
None at this time. This policy provides a general framework for all future City debt issuances.
LEGAL REVIEW:
The City Attorney and special counsel have reviewed this agenda report and the Resolution
and concur with the recommended action.
CONCLUSION:
The City Manager and legal counsel recommend the City Council adopt the attached Resolution
No. 17- establishing the City's Debt Management Policy.
Thomas R. Hatch
City Manager
Stephen Dunivent
Interim Finance Director
Attachments:
Thomas P. Duarte
City Attorney
1. Resolution No 17-
2. Proposed Debt Policy - Redlined
3. Proposed Debt Policy - Final
4. Senate Bill No. 1029 Amending Section
Code
of the Government
In
Attachment 1
RESOLUTION NO. 17-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA ADOPTING THE CITY OF COSTA MESA DEBT MANAGEMENT
POLICY
WHEREAS, the City of Costa Mesa ("City") is a California municipal corporation
and general law City; and
WHEREAS, California Senate Bill 1029 ("SB 1029") was enacted in September
2016 and became effective as of January 1, 2017; and
WHEREAS, SB 1029 requires state and local agencies to adopt comprehensive
debt management policies before any new debt can be issued on or after January 2,
2017; and
WHEREAS, the City Council desires to comply with SB 1029 and to adopt the
proposed Debt Management Policy for the City of Costa Mesa; and
WHEREAS, the City Council has reviewed and considered the Debt Policy and by
this Resolution desire to adopt the Debt Policy as presented.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Costa
Mesa resolves:
Section 1. The City of Costa Mesa Debt Management Policy is hereby adopted and
established as the City's Debt Policy.
Section 2. This City Council Resolution shall take effect immediately upon its passage.
Section 3. The City Clerk of the City of Costa Mesa shall certify as to the adoption of
the City Council Resolution.
PASSED, APPROVED, AND ADOPTED this 5" day of September, 2017.
Katrina Foley, Mayor
ATTEST:
Brenda Green, City Clerk
APPROVED AS TO FORM:
Thomas P. Duarte, City Attorney
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss
CITY OF COSTA MESA
I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY CERTIFY that
the foregoing Resolution No. 17- was duly passed and adopted by the City Council
of the City of Costa Mesa at a regular meeting held 5' of September, 2017 by the
following roll call vote, to wit:
AYES:
COUNCIL MEMBERS
NOES:
COUNCIL MEMBERS
ABSENT:
COUNCIL MEMBERS
IN WITNESS WHEREOF, I have hereby set my hand and affixed the Seal of the City of
Costa mesa this 6' day of September, 2017
Brenda Green, City Clerk
(SEAL)
Costa Mesa
Debt Management Policy
1. Introduction
Attachment 2
On September 5, 2017 the City Council of the City of Costa Mesa ("City Council") reviewed
and considered this Debt Management Policy ("Debt Policy") of the City of Costa Mesa
("City") and this Debt Policy was approved by action of the City Council on September 5,
2017. This Debt Policy provides guidelines for debt issuance, management and post -
issuance related policies and procedures for the City. This Debt Policy may be amended by
the City Council as it deems appropriate from time -to -time in the prudent management of the
debt and financing needs of the City.
2. Purpose
The purpose of this Debt Policy is to establish guidelines and parameters for the effective
governance, management and administration of debt and other financing obligations issued
by the City and its related entities (such as, but not exclusive to, the Costa Mesa Public
Financing Authority, the Costa Mesa Housing Authority, the Costa Mesa Financing Authority,
and the City -formed Community Facilities Districts). This Debt Policy is intended to improve
and direct decision making, assist with the structure of debt issuance, identify policy goals,
and demonstrate a commitment to long-term planning, including the City's Five -Year
Financial Plan and the (Seven -Year Capital Improvement Program. Adherence to a debt
policy helps to ensure the City's debt is issued and managed prudently in order to maintain a
sound financial position and credit worthiness. When used in this Debt Policy, "debt" refers
to all indebtedness and financing obligations of the City and its related entities (together
referred to as "City").
3. Debt Policy Objective
Commented [MMl]: RPAC suggested deletion of this language.
Any edit to this Section is considered critical to the credit rating
agency and the City's overall ability to receive a higher credit rating.
No edits were made. This Section remains as it is.
This Debt Policy is intended to comply with the requirements of Senate Bill 1029 (SB 1029), Formatted: Justified, Space After: 12 pt, Line spacing:
codified as part of California Government Code Section 8855(i), effective on January 1, 2017 single
and shall govern all debt undertaken by the City. The primary objectives of the City's debt
and financing related activities are to:
A. Maintain the City's sound financial position. The City will strive to maintain at least a
credit rating of °A" on the S&P Credit Rating Scale; Commented [UK2]: FiPAC suggested that language be inserted
to designate the credit rating of "Al", which is a Moody's credit
B. _Ensure the City has the flexibility to respond to possible changes in future service "A"
rating, not ratiS&Png. The City did add language but changed it to S&P's
"A" credit rating.
obligations, revenues, and operating expenses;
Y Deleted:
C. Ensure that all debt is structured in order to protect both current and future taxpayers, Deleted: <#>The City will strive to maintain at least a
credit rating of "A" on the S&P Credit Rating Scale; ¶
ratepayers and constituents of the City;
D. Minimize debt service commitments through efficient planning and cash management;
Costa Mesa
E. Protect the City's credit worthiness and achieve the highest practical credit ratings,
when applicable; and
F. Ensure the City is in compliance with all relevant State and Federal securities laws
and other applicable laws and regulations.
4. Acceptable Uses of Debt Proceeds
The City will consider the use of debt financing primarily for assets and capital projects only
if the term of debt shall not exceed the asset(s) or project's useful life or will otherwise comply
with Federal tax law requirements. An exception to this long-term driven focus is the issuance
of short-term instruments, such as tax and revenue anticipation notes, which are to be used
for reasonable cash management purposes, as described below. Bonded debt should not be
issued to finance normal operating expenses. General Fund debt will not be issued to support
ongoing operational costs unless such debt issuance achieves net operating cost savings
and such savings are verified by independent analysis.
A. Long -Term Debt.
i. Long-term debt may be issued to finance the construction, acquisition, and
rehabilitation of capital improvements and facilities, equipment, and land to be
owned and/or operated by the City. Long-term debt financings are appropriate
when any of the following conditions exist:
(1) When the project to be financed is necessary to provide basic municipal
services;
(2) When the project to be financed will provide benefit to the City's constituents
over a duration of more than one year;
(3) When the total debt financing would not impose an unreasonable burden on
the City and its taxpayers and/or ratepayers, as applicable; or
(4) When the debt is used to refinance outstanding debt in order to produce debt
service savings or to benefit from debt restructuring.
The City may use long-term debt financings subject to each of the following
conditions:
(1) The project to be financed has been or will be considered and approved by the commented [14144]: FiPAC suggested the deletion of this
City Council; language. The City has deleted this language.
(2) The weighted average maturity of the debt (or the portion of the debt allocated
to the project) will not exceed the average useful life of the project to be
financed by more than 20%;
Costa Mesa
(3) The City estimates that sufficient revenues will be available to service the debt
through its maturity; and
(4) The City determines that the issuance of the debt will comply with the
applicable requirements of State and Federal law.
B. Short -Term Debt.
L Short-term debt may be issued to provide financing for the City's operational cash
flows in order to maintain a steady and even cash flow balance. Short-term debt
may also be used to finance the City's short-lived capital projects, such as
undertaking lease -purchase financing for equipment.
C. Financings on Behalf of Other Entities
i. The City may also issue debt on behalf of other governmental agencies or private
third parties in order to further the public purposes of the City. In such cases, the
City shall take reasonable steps to confirm the financial feasibility of the project to
be financed, the financial solvency of any borrower, and that the issuance of such
debt is consistent with the policies set forth herein.
5. Standards for Use of Debt Financing
The City recognizes that there are numerous types of financing structures and funding
sources available, each with specific benefits, costs, and risks. The City will consider debt
issuance only in those cases where public policy, equity and economic efficiency favor debt
financing over cash funding. Prior to the issuance of debt or other financing obligations, the
City will carefully consider the overall long-term affordability of the proposed debt issuance
by conducting an objective analysis of the City's ability to support additional debt service
payments. The City will consider its long-term revenue and expenditure trends, the impact on
operational flexibility and the overall debt burden on the taxpayers/ratepayers. The evaluation
process shall include a review of generally accepted measures of affordability and will strive
to achieve and/or maintain debt levels consistent with its current operating and capital needs.
6. Types of Debt
In order to maximize the financial options available to benefit the public, it is the City's policy
to allow the consideration of issuing all generally accepted types of debt, including, but not
exclusive to the following:
A. General Obligation (GO) Bonds
L GO Bonds are suitable for use in the construction or acquisition of improvements
to real property that benefit the public at large. The California Government Code,
Division 4, Chapter 4, Article 1 commencing with section 43600 authorizes cities
to finance certain municipal improvements through GO bonds when a city
Costa Mesa
determines the public interest and necessity demands the acquisition, construction
or completion of such municipal improvements, including property or structures
necessary or convenient to carry out the objects, purposes, and powers of a city.
ii. Examples of projects include but are not limited to libraries, parks, public services, Commented [141145]: HPAC suggested "public services' be
and public safety facilities. All GO bonds shall be authorized by the requisite inserted here. The City has inserted this language.
number of voters in order to pass.
B. Revenue Bonds/Certificates of Participation (COPs):
i. Revenue Bonds and COPs are limited -liability obligations tied to a specific
enterprise or special fund revenue stream where the projects financed clearly
benefit or relate to the enterprise or are otherwise permissible uses of the special
revenue. Generally, no voter approval is required to issue this type of obligation
but in some cases, the City must comply with proposition 218 regarding rate
adjustments.
C. Joint Powers Authority (JPA) Lease Revenue Bonds:
i. As an alternative to COPs, the City may obtain financing through the issuance of
debt by a joint exercise of powers agency with such debt payable from amounts
paid by the City under a lease, installment sale agreement, or contract of
indebtedness.
D. Loans:
i. The City is authorized to enter into loans, installment payment obligations, or other
similar funding structures secured by a prudent source or sources of repayment.
E. Special Assessment/Special Tax Debt:
i. The City will consider requests from developers for the use of debt financing
secured by property -based assessments or special taxes in order to provide for
necessary infrastructure for new development under guidelines adopted by City
Council, which may include minimum value -to -lien ratios and maximum tax
burdens. Examples of this type of debt are Assessment Districts (ADs) and
Community Facilities Districts (CFDs), also known as Mello -Roos Districts. In
order to protect bondholders as well as the City's credit rating, the City will also
comply with all State guidelines regarding the issuance of special tax or special
assessment debt.
F. Tax Allocation Bonds:
i. Tax Allocation Bonds are special obligations that are secured by the allocation of
tax increment revenues that are generated by increased property taxes in the
designated (now former) redevelopment project areas. Tax Allocation Bonds are
Costa Mesa
not debt of the City. California Health and Safety Code, Division 24, Parts 1.8 and
1.85 limit the authority to issuance of tax allocation bonds only as to refunding of
bonds properly and timely issued prior to January 1, 2011; such laws are referred
to as the "Dissolution Law" and govern successor agencies to now dissolved
redevelopment agencies.
G. Short -Term Debt
Short-term borrowing, such as commercial paper, Tax and Revenue Anticipation
Notes (TRANS), and lines of credit, will be considered as an interim source of
funding in anticipation of long-term borrowing and may be issued to generate
funding for cash flow needs. The final maturity of the debt issued to finance the
project shall be consistent with the useful life of the project.
ii. Short-term debt may also be used to finance short-lived capital projects such as
lease -purchase financing for equipment.
H. Refundina Bonds:
i. The City shall refinance debt pursuant to the authorization that is provided under
California law, including but not limited to Articles 10 and 11 of Chapter 3 of Part 1
of Division 2 of Title 5 of the California Government Code, as market opportunities
arise. Refundings may be undertaken in order:
(1) To take advantage of lower interest rates and achieve debt service costs
savings;
(2) To eliminate restrictive or burdensome bond covenants; or
(3) To restructure debt to lengthen the duration of repayment, relieve debt service
spikes, reduce volatility in interest rates or free up reserve funds.
Generally, the City shall strive to achieve a minimum of 3% net present value
savings. The net present value assessment shall factor in all costs, including
issuance, escrow, and foregone interest earnings of any contributed funds on
hand. Refundings which produce a net present value savings of less than 3% will
be considered on a case-by-case basis. Upon the advice of the Finance Director
and with the assistance of a financial advisor and bond counsel, the City will
consider undertaking refundings for other than economic purposes based upon a
finding that such a restructuring is in the City's overall best financial interest.
The City may from time to time find that other forms of debt would be beneficial to
further its public purposes and may approve such debt without an amendment of
this Debt Policy. However, the other form or forms of debt must comply with this
Debt Management Policy. Commented [14146]: RPAC suggested language for Insertion.
The City has inserted this language.
Costa Mesa
Debt shall be issued as fixed rate debt unless the City makes a specific determination as to- - Formatted: Justified, Line spacing: single
why a variable rate issue would be beneficial to the City in that circumstance.
7. Relationship to Capital Improvement Program and Operating Budget
The City intends to issue debt for the purposes stated in this Debt Policy and the decision to
incur new indebtedness should be integrated with the City Council -adopted annual Operating
Budget and Capital Improvement Program Budget. Prior to issuance of debt, a reliable
revenue source shall be identified to secure repayment of the debt and the annual debt
service payments shall be included in the Operating Budget.
The City shall integrate its debt issuances with the goals of its Capital Improvement Program
by timing the issuance of debt to ensure that projects are available when needed in
furtherance of the City's public purposes.
8. Policy Goals Related to Planning Goals and Objectives
A. This Debt Policy has been adopted to assist with the City's goal of financial
sustainability and financial prudence. In following this Debt Policy, the City shall
pursue the following policy goals:
i. The City is committed to financial planning, maintaining appropriate reserves levels
and employing prudent practices in governance, management and budget
administration. The City intends to issue debt for the purposes stated in this Debt
Policy and to implement policy decisions incorporated in the City's annual
Operating Budget;
ii. It is a policy goal of the City to protect taxpayers, ratepayers and constituents by
utilizing conservative financing methods and techniques so as to obtain the highest
practical credit ratings, if applicable, and the lowest practical borrowing costs;
iii. It is a policy goal of the City to reduce) the unfunded liabilities for employee pension
and other post -employment benefits (OPEB);
iv. The City will comply with applicable State and Federal law as it pertains to the
maximum term of debt and the procedures for levying and imposing any related
taxes, assessments, rates and charges; and
v. When refinancing debt, it shall be the policy goal of the City to achieve, whenever
possible and subject to any overriding non-financial policy, minimum aggregate net
present value debt service savings of at least 3% of the refunded principal amount.
Commented [14147]: FiPAC suggested the removal of "reduce"
and replace with "prudently manage'. The City believes that the
suggestion weakens the statement. No edits were made. This
Section remains as it is.
Costa Mesa
9. Internal Control Procedures
When issuing debt, in addition to complying with the terms of this Debt Policy, the City shall
comply with any other applicable policies regarding initial bond disclosure, continuing
disclosure, post -issuance compliance, and investment of bond proceeds.
The City will periodically review the requirements of and will remain in compliance with the
following:
i. Federal securities law, including any continuing disclosure undertakings under SEC
Rule 15c2-12;
ii. Any federal tax compliance requirements including without limitation arbitrage and
rebate compliance, related to any prior bond issues;
iii. The City's investment policies as they relate to the investment of bond proceeds; and
iv. Government Code section 8855(k) and the annual reporting requirements therein.
The City shall be vigilant in using bond proceeds in accordance with the stated purpose at
the time that such debt was issued. The City Manager, Finance Director or designee will
monitor the expenditure of bond proceeds to ensure they are used only for the purpose and
authority for which the bonds were issued. Whenever reasonably possible, proceeds of debt
will be held by a third -party trustee and the City will submit written requisitions for such
proceeds. The City will submit a requisition only after obtaining the signature of the City
Manager and the Finance Director.
10. Amendment and Waivers of Debt Policy
This Debt Policy will be reviewed and updated periodically as needed. Any amendments to
this Debt Policy are subject to specific City Council approval.
While adherence to this Debt Policy is required in all applicable circumstances, on rare
occasions there might be circumstances when strict adherence to a provision of this Debt
Policy is not possible or not in the best interest of the City. If the City staff has determined
that a waiver of one or more provisions of this Debt Policy should be considered by the City
Council, it will prepare an analysis for the City Council describing the rationale for the waiver
and the impact of the waiver on the proposed debt issuance and on taxpayers, if applicable.
Upon a (majority vote of the City Council, one or more provisions of this Debt Policy may be
waived for a debt financing.
The failure of a debt financing to comply with one or more provisions of this Debt Policy shall
in no way affect the validity of any debt issued by the City in accordance with applicable laws.
11. SB 1029 Compliance
Commented [14148]: FiPAC suggested that "unanimous"
replace "majority'. The City believes that majority is sufficient and
all that is required. No edits made. This Section remains as it is.
Costa Mesa
SB 1029, signed by Governor Brown on September 12, 2016, and enacted as Chapter 307,
Statutes of 2016, requires issuers to adopt debt policies addressing each of the five items
below:
A. The purposes for which the debt proceeds may be used.
i. Section 4 (Acceptable Uses of Debt Proceeds) addresses the purposes for which
debt proceeds may be used.
B. The types of debt that may be issued.
L Section 6 (Types of Debt) provides information regarding the types of debt that
may be issued.
C. The relationship of the debt to, and integration with, the issuer's capital improvement
program or budget, if applicable.
i. Section 7 (Relationship to Capital Improvement Program and Operating Budget)
provides information regarding the relationship between the City's debt and Capital
Improvement Program and annual Operating Budget.
D. Policy goals related to the issuer's planning goals and objectives.
L Section 3 (Debt Policy Objective) and Section 8 (Policy Goals Related to Planning
Goals and Objectives) address some of the City's policy goals and how this Debt
Policy has implemented them.
E. The internal control procedures that the issuer has implemented, or will implement, to
ensure that the proceeds of the proposed debt issuance will be directed to the intended
use.
L Section 9 (Internal Control Procedures) provides information regarding the City's
internal control procedures designed to ensure that the proceeds of its debt issues
are spent as intended.
This Debt Policy, as written, complies with and meets the requirements of SB 1029.
Debt Management Policy
Adopted on 2017
Costa Mesa
Debt Management Policy
1. Introduction
Attachment 3
On September 5, 2017 the City Council of the City of Costa Mesa ("City Council") reviewed
and considered this Debt Management Policy ("Debt Policy") of the City of Costa Mesa
("City") and this Debt Policy was approved by action of the City Council on September 5,
2017. This Debt Policy provides guidelines for debt issuance, management and post -
issuance related policies and procedures for the City. This Debt Policy may be amended by
the City Council as it deems appropriate from time -to -time in the prudent management of the
debt and financing needs of the City.
2. Purpose
The purpose of this Debt Policy is to establish guidelines and parameters for the effective
governance, management and administration of debt and other financing obligations issued
by the City and its related entities (such as, but not exclusive to, the Costa Mesa Public
Financing Authority, the Costa Mesa Housing Authority, the Costa Mesa Financing Authority,
and the City -formed Community Facilities Districts). This Debt Policy is intended to improve
and direct decision making, assist with the structure of debt issuance, identify policy goals,
and demonstrate a commitment to long-term planning, including the City's Five -Year
Financial Plan and the Seven -Year Capital Improvement Program. Adherence to a debt
policy helps to ensure the City's debt is issued and managed prudently in order to maintain a
sound financial position and credit worthiness. When used in this Debt Policy, "debt" refers
to all indebtedness and financing obligations of the City and its related entities (together
referred to as "City").
3. Debt Policy Objective
This Debt Policy is intended to comply with the requirements of Senate Bill 1029 (SB 1029),
codified as part of California Government Code Section 8855(i), effective on January 1, 2017
and shall govern all debt undertaken by the City. The primary objectives of the City's debt
and financing related activities are to:
A. Maintain the City's sound financial position. The City will strive to maintain at least a
credit rating of "A" on the S&P Credit Rating Scale;
B. Ensure the City has the flexibility to respond to possible changes in future service
obligations, revenues, and operating expenses;
C. Ensure that all debt is structured in order to protect both current and future taxpayers,
ratepayers and constituents of the City;
D. Minimize debt service commitments through efficient planning and cash management;
Costa Mesa
E. Protect the City's credit worthiness and achieve the highest practical credit ratings,
when applicable; and
F. Ensure the City is in compliance with all relevant State and Federal securities laws
and other applicable laws and regulations.
4. Acceptable Uses of Debt Proceeds
The City will consider the use of debt financing primarily for assets and capital projects only
if the term of debt shall not exceed the asset(s) or project's useful life or will otherwise comply
with Federal tax law requirements. An exception to this long-term driven focus is the issuance
of short-term instruments, such as tax and revenue anticipation notes, which are to be used
for reasonable cash management purposes, as described below. Bonded debt should not be
issued to finance normal operating expenses. General Fund debt will not be issued to support
ongoing operational costs unless such debt issuance achieves net operating cost savings
and such savings are verified by independent analysis.
A. Lona -Term Debt.
i. Long-term debt may be issued to finance the construction, acquisition, and
rehabilitation of capital improvements and facilities, equipment, and land to be
owned and/or operated by the City. Long-term debt financings are appropriate
when any of the following conditions exist:
(1) When the project to be financed is necessary to provide basic municipal
services;
(2) When the project to be financed will provide benefit to the City's constituents
over a duration of more than one year;
(3) When the total debt financing would not impose an unreasonable burden on
the City and its taxpayers and/or ratepayers, as applicable; or
(4) When the debt is used to refinance outstanding debt in order to produce debt
service savings or to benefit from debt restructuring.
ii. The City may use long-term debt financings subject to each of the following
conditions:
(1) The project to be financed has been approved by the City Council;
(2) The weighted average maturity of the debt (or the portion of the debt allocated
to the project) will not exceed the average useful life of the project to be
financed by more than 20%;
2
Costa Mesa
(3) The City estimates that sufficient revenues will be available to service the debt
through its maturity; and
(4) The City determines that the issuance of the debt will comply with the
applicable requirements of State and Federal law.
B. Short -Term Debt.
Short-term debt may be issued to provide financing for the City's operational cash
flows in order to maintain a steady and even cash flow balance. Short-term debt
may also be used to finance the City's short-lived capital projects, such as
undertaking lease -purchase financing for equipment.
C. Financinas on Behalf of Other Entities.
i. The City may also issue debt on behalf of other governmental agencies or private
third parties in order to further the public purposes of the City. In such cases, the
City shall take reasonable steps to confirm the financial feasibility of the project to
be financed, the financial solvency of any borrower, and that the issuance of such
debt is consistent with the policies set forth herein.
5. Standards for Use of Debt Financing
The City recognizes that there are numerous types of financing structures and funding
sources available, each with specific benefits, costs, and risks. The City will consider debt
issuance only in those cases where public policy, equity and economic efficiency favor debt
financing over cash funding. Prior to the issuance of debt or other financing obligations, the
City will carefully consider the overall long-term affordability of the proposed debt issuance
by conducting an objective analysis of the City's ability to support additional debt service
payments. The City will consider its long-term revenue and expenditure trends, the impact on
operational flexibility and the overall debt burden on the taxpayers/ratepayers. The evaluation
process shall include a review of generally accepted measures of affordability and will strive
to achieve and/or maintain debt levels consistent with its current operating and capital needs.
6. Types of Debt
In order to maximize the financial options available to benefit the public, it is the City's policy
to allow the consideration of issuing all generally accepted types of debt, including, but not
exclusive to the following:
Costa Mesa
A. General Obligation (GO) Bonds:
GO Bonds are suitable for use in the construction or acquisition of improvements
to real property that benefit the public at large. The California Government Code,
Division 4, Chapter 4, Article 1 commencing with section 43600 authorizes cities
to finance certain municipal improvements through GO bonds when a city
determines the public interest and necessity demands the acquisition, construction
or completion of such municipal improvements, including property or structures
necessary or convenient to carry out the objects, purposes, and powers of a city.
Examples of projects include but are not limited to libraries, parks, public services,
and public safety facilities. All GO bonds shall be authorized by the requisite
number of voters in order to pass.
B. Revenue Bonds/Certificates of Participation (COPs):
Revenue Bonds and COPs are limited -liability obligations tied to a specific
enterprise or special fund revenue stream where the projects financed clearly
benefit or relate to the enterprise or are otherwise permissible uses of the special
revenue. Generally, no voter approval is required to issue this type of obligation
but in some cases, the City must comply with proposition 218 regarding rate
adjustments.
C. Joint Powers Authority (JPA) Lease Revenue Bonds:
i. As an alternative to COPs, the City may obtain financing through the issuance of
debt by a joint exercise of powers agency with such debt payable from amounts
paid by the City under a lease, installment sale agreement, or contract of
indebtedness.
D. Loans:
i. The City is authorized to enter into loans, installment payment obligations, or other
similar funding structures secured by a prudent source or sources of repayment.
E. Special Assessment/Special Tax Debt:
The City will consider requests from developers for the use of debt financing
secured by property -based assessments or special taxes in order to provide for
necessary infrastructure for new development under guidelines adopted by City
Council, which may include minimum value -to -lien ratios and maximum tax
burdens. Examples of this type of debt are Assessment Districts (ADs) and
Community Facilities Districts (CFDs), also known as Mello -Roos Districts. In
order to protect bondholders as well as the City's credit rating, the City will also
comply with all State guidelines regarding the issuance of special tax or special
assessment debt.
4
Costa Mesa
F. Tax Allocation Bonds:
Tax Allocation Bonds are special obligations that are secured by the allocation of
tax increment revenues that are generated by increased property taxes in the
designated (now former) redevelopment project areas. Tax Allocation Bonds are
not debt of the City. California Health and Safety Code, Division 24, Parts 1.8 and
1.85 limit the authority to issuance of tax allocation bonds only as to refunding of
bonds properly and timely issued prior to January 1, 2011; such laws are referred
to as the "Dissolution Law" and govern successor agencies to now dissolved
redevelopment agencies.
G. Short -Term Debt:
Short-term borrowing, such as commercial paper, Tax and Revenue Anticipation
Notes (TRANS), and lines of credit, will be considered as an interim source of
funding in anticipation of long-term borrowing and may be issued to generate
funding for cash flow needs. The final maturity of the debt issued to finance the
project shall be consistent with the useful life of the project.
ii. Short-term debt may also be used to finance short-lived capital projects such as
lease -purchase financing for equipment.
H. Refunding Bonds:
i. The City shall refinance debt pursuant to the authorization that is provided under
California law, including but not limited to Articles 10 and 11 of Chapter 3 of Part 1
of Division 2 of Title 5 of the California Government Code, as market opportunities
arise. Refundings may be undertaken in order:
(1) To take advantage of lower interest rates and achieve debt service costs
savings;
(2) To eliminate restrictive or burdensome bond covenants; or
(3) To restructure debt to lengthen the duration of repayment, relieve debt service
spikes, reduce volatility in interest rates or free up reserve funds.
Generally, the City shall strive to achieve a minimum of 3% net present value
savings. The net present value assessment shall factor in all costs, including
issuance, escrow, and foregone interest earnings of any contributed funds on
hand. Refundings which produce a net present value savings of less than 3% will
be considered on a case-by-case basis. Upon the advice of the Finance Director
and with the assistance of a financial advisor and bond counsel, the City will
consider undertaking refundings for other than economic purposes based upon a
finding that such a restructuring is in the City's overall best financial interest.
Costa Mesa
The City may from time to time find that other forms of debt would be beneficial to
further its public purposes and may approve such debt without an amendment of
this Debt Policy. However, the other form or forms of debt must comply with this
Debt Management Policy.
Debt shall be issued as fixed rate debt unless the City makes a specific determination as to
why a variable rate issue would be beneficial to the City in that circumstance.
7. Relationship to Capital Improvement Program and Operating Budget
The City intends to issue debt for the purposes stated in this Debt Policy and the decision to
incur new indebtedness should be integrated with the City Council -adopted annual Operating
Budget and Capital Improvement Program Budget. Prior to issuance of debt, a reliable
revenue source shall be identified to secure repayment of the debt and the annual debt
service payments shall be included in the Operating Budget.
The City shall integrate its debt issuances with the goals of its Capital Improvement Program
by timing the issuance of debt to ensure that projects are available when needed in
furtherance of the City's public purposes.
8. Policy Goals Related to Planning Goals and Objectives
A. This Debt Policy has been adopted to assist with the City's goal of financial
sustainability and financial prudence. In following this Debt Policy, the City shall
pursue the following policy goals:
i. The City is committed to financial planning, maintaining appropriate reserves levels
and employing prudent practices in governance, management and budget
administration. The City intends to issue debt for the purposes stated in this Debt
Policy and to implement policy decisions incorporated in the City's annual
Operating Budget;
ii. It is a policy goal of the City to protect taxpayers, ratepayers and constituents by
utilizing conservative financing methods and techniques so as to obtain the highest
practical credit ratings, if applicable, and the lowest practical borrowing costs;
iii. It is a policy goal of the City to reduce the unfunded liabilities for employee pension
and other post -employment benefits (OPEB);
iv. The City will comply with applicable State and Federal law as it pertains to the
maximum term of debt and the procedures for levying and imposing any related
taxes, assessments, rates and charges; and
v. When refinancing debt, it shall be the policy goal of the City to achieve, whenever
possible and subject to any overriding non-financial policy, minimum aggregate net
present value debt service savings of at least 3% of the refunded principal amount.
0
Costa Mesa
Internal Control Procedures
When issuing debt, in addition to complying with the terms of this Debt Policy, the City shall
comply with any other applicable policies regarding initial bond disclosure, continuing
disclosure, post -issuance compliance, and investment of bond proceeds.
The City will periodically review the requirements of and will remain in compliance with the
following:
vi. Federal securities law, including any continuing disclosure undertakings under SEC
Rule 15c2-12;
vii. Any federal tax compliance requirements including without limitation arbitrage and
rebate compliance, related to any prior bond issues;
viii. The City's investment policies as they relate to the investment of bond proceeds; and
ix. Government Code section 8855(k) and the annual reporting requirements therein.
The City shall be vigilant in using bond proceeds in accordance with the stated purpose at
the time that such debt was issued. The City Manager, Finance Director or designee will
monitor the expenditure of bond proceeds to ensure they are used only for the purpose and
authority for which the bonds were issued. Whenever reasonably possible, proceeds of debt
will be held by a third -party trustee and the City will submit written requisitions for such
proceeds. The City will submit a requisition only after obtaining the signature of the City
Manager and the Finance Director.
9. Amendment and Waivers of Debt Policy
This Debt Policy will be reviewed and updated periodically as needed. Any amendments to
this Debt Policy are subject to specific City Council approval.
While adherence to this Debt Policy is required in all applicable circumstances, on rare
occasions there might be circumstances when strict adherence to a provision of this Debt
Policy is not possible or not in the best interest of the City. If the City staff has determined
that a waiver of one or more provisions of this Debt Policy should be considered by the City
Council, it will prepare an analysis for the City Council describing the rationale for the waiver
and the impact of the waiver on the proposed debt issuance and on taxpayers, if applicable.
Upon a majority vote of the City Council, one or more provisions of this Debt Policy may be
waived for a debt financing.
The failure of a debt financing to comply with one or more provisions of this Debt Policy shall
in no way affect the validity of any debt issued by the City in accordance with applicable laws.
7
Costa Mesa
10. SB 1029 Compliance
SB 1029, signed by Governor Brown on September 12, 2016, and enacted as Chapter 307,
Statutes of 2016, requires issuers to adopt debt policies addressing each of the five items
below:
A. The purposes for which the debt proceeds may be used.
i. Section 4 (Acceptable Uses of Debt Proceeds) addresses the purposes for which
debt proceeds may be used.
B. The types of debt that may be issued.
Section 6 (Types of Debt) provides information regarding the types of debt that
may be issued.
C. The relationship of the debt to, and integration with, the issuer's capital improvement
program or budget, if applicable.
Section 7 (Relationship to Capital Improvement Program and Operating Budget)
provides information regarding the relationship between the City's debt and Capital
Improvement Program and annual Operating Budget.
D. Policy goals related to the issuer's planning goals and objectives.
Section 3 (Debt Policy Objective) and Section 8 (Policy Goals Related to Planning
Goals and Objectives) address some of the City's policy goals and how this Debt
Policy has implemented them.
E. The internal control procedures that the issuer has implemented, or will implement, to
ensure that the proceeds of the proposed debt issuance will be directed to the intended
use.
i. Section 9 (Internal Control Procedures) provides information regarding the City's
internal control procedures designed to ensure that the proceeds of its debt issues
are spent as intended.
This Debt Policy, as written, complies with and meets the requirements of SB 1029.
Debt Management Policy
Adopted on
0
2017
Senate Bill No. 1029
CHAPTER 307
Attachment 4
An act to amend Section 8855 of the Government Code, relating to state
government.
[Approved by Governor September 12, 2016. Filed with
Secretary of State September 12, 2016.]
LEGISLATIVE COUNSEL'S DIGEST
SB 1029, Hertzberg. California Debt and Investment Advisory
Commission: accountability reports.
Existing law establishes the California Debt and Investment Advisory
Commission to, among other things, maintain contact with state and
municipal bond issuers, underwriters, investors, and credit rating agencies
to improve the market for state and local government debt issues and to
assist state and local governments to prepare, market, and sell their debt
issues. Existing law requires the commission to collect, maintain, and provide
comprehensive information on all state and all local debt authorization and
issuance and to serve as a statistical clearinghouse for all state and local
debt issuance.
This bill would additionally require the commission to track and report
on all state and local outstanding debt until fully repaid or redeemed.
Existing law requires the issuer of debt of state or local government to
submit reports to the commission, within specified timeframes, of the
proposed issuance of debt and of final sale, as provided.
This bill would require that the report of proposed debt include a
certification by the issuer that it has adopted local debt policies, which
include specified provisions concerning the use of debt and that the
contemplated debt issuance is consistent with those local debt policies.
This bill would also require a state or local public agency to submit an
annual report for any issue of debt for which it has submitted a report of
final sale on or after January 21, 2017. The bill would require the annual
report to cover a reporting period of July 1 to June 30, inclusive, and to
include specified information about debt issued and outstanding and the use
of proceeds from debt during the reporting period. The bill would require
that the report be submitted within 7 months after the end of the reporting
period by any method approved by the commission. The bill would require
the commission to consult with appropriate state and local debt issuers and
organizations representing debt issuers prior to approving any annual method
of reporting pursuant to these provisions, as provided.
This bill would make various findings and declarations regarding its
provisions.
92
Ch. 307 —2
The people of the State of California do enact as follows:
SECTION 1. The Legislature hereby finds and declares all of the
following:
(a) California's 4,200 units of local government have issued $1.5 trillion
in debt since 1984. The California Debt and Investment Advisory
Commission (CDIAC) was created in 1982 to provide information,
education, and technical assistance on debt issuance and investments to
local public agencies and other public finance professionals. Over the past
three decades, CDIAC has emerged as a national thought leader in public
finance.
(b) Nationally, there is approximately $3.7 trillion of state and local
government debt outstanding. Of all outstanding state and local government
debt, approximately 75 percent is held by households and mutual funds
owned predominantly by households. State governments, local governments,
and their stakeholders benefit from better data about public debt.
Transparency on public debt promotes better government and market
integrity. It is in the interest of the people that state and local agencies utilize
technological opportunities to provide transparency to the public.
(c) State and local agencies should adopt comprehensive written debt
management policies pursuant to the recommendation of the Government
Finance Officers Association, a professional organization of over 18,000
public officials united to enhance and promote the professional management
of governmental financial resources. These policies should reflect local,
state, and federal laws and regulations.
(d) It is the intent of the Legislature that all debt issuance of state and of
local governments be published in a single, transparent online database that
allows the citizens of California to analyze, interpret, and understand how
debt authorized by the public is utilized to finance facilities and services at
the state and local level.
SEC. 2. Section 8855 of the Government Code is amended to read:
8855. (a) There is created the California Debt and Investment Advisory
Commission, consisting of nine members, selected as follows:
(1) The Treasurer, or his or her designee.
(2) The Governor or the Director of Finance.
(3) The Controller, or his or her designee.
(4) Two local government finance officers appointed by the Treasurer,
one each from among persons employed by a county and by a city or a city
and county of this state, experienced in the issuance and sale of municipal
bonds and nominated by associations affiliated with these agencies.
(5) Two Members of the Assembly appointed by the Speaker of the
Assembly.
(6) Two Members of the Senate appointed by the Senate Committee on
Rules.
(b) (1) The term of office of an appointed member is four years, but
appointed members serve at the pleasure of the appointing power. In case
92
Ch. 307
of a vacancy for any cause, the appointing power shall make an appointment
to become effective immediately for the unexpired term.
(2) Any legislators appointed to the commission shall meet with and
participate in the activities of the commission to the extent that the
participation is not incompatible with their respective positions as Members
of the Legislature. For purposes of this chapter, the Members of the
Legislature shall constitute a joint interim legislative committee on the
subject of this chapter.
(c) The Treasurer shall serve as chairperson of the commission and shall
preside at meetings of the commission.
(d) Appointed members of the commission shall not receive a salary, but
shall be entitled to a per diem allowance of fifty dollars ($50) for each day's
attendance at a meeting of the commission not to exceed three hundred
dollars ($300) in any month, and reimbursement for expenses incurred in
the performance of their duties under this chapter, including travel and other
necessary expenses.
(e) The commission may adopt bylaws for the regulation of its affairs
and the conduct of its business.
(f) The commission shall meet on the call of the chairperson, at the request
of a majority of the members, or at the request of the Governor. A majority
of all nonlegislative members of the commission constitutes a quorum for
the transaction of business.
(g) The office of the Treasurer shall furnish all administrative assistance
required by the commission.
(h) The commission shall do all of the following:
(1) Assist all state financing authorities and commissions in carrying out
their responsibilities as prescribed by law, including assistance with respect
to federal legislation pending in Congress.
(2) Upon request of any state or local government units, to assist them
in the planning, preparation, marketing, and sale of debt issues to reduce
cost and to assist in protecting the issuer's credit.
(3) Collect, maintain, and provide comprehensive information on all state
and all local debt authorization and issuance, track and report on all state
and local outstanding debt until fully repaid or redeemed, and serve as a
statistical clearinghouse for all state and local debt. This information shall
be available to the public.
(4) Maintain contact with state and municipal bond issuers, underwriters,
credit rating agencies, investors, and others to improve the market for state
and local government debt issues.
(5) Undertake or commission studies on methods to reduce the costs and
improve credit ratings of state and local issues.
(6) Recommend changes in state laws and local practices to improve the
sale and servicing of state and local debts.
(7) Establish a continuing education program for local officials having
direct or supervisory responsibility over municipal investments and debt
issuance. The commission shall undertake these and any other activities
92
Ch. 307 —4
necessary to disclose investment and debt issuance practices and strategies
that may be conducive for oversight purposes.
(8) Collect, maintain, and provide information on local agency
investments of public funds for local agency investment.
(9) Publish a monthly newsletter describing and evaluating the operations
of the commission during the preceding month.
(i) (1) The issuer of any proposed debt issue of state or local government
shall, no later than 30 days prior to the sale of any debt issue, submit a report
of the proposed issuance to the commission by any method approved by
the commission. This subdivision shall also apply to any nonprofit public
benefit corporation incorporated for the purpose of acquiring student loans.
The commission may require information to be submitted in the report of
proposed debt issuance that it considers appropriate. Failure to submit the
report shall not affect the validity of the sale. The report of proposed debt
issuance shall include a certification by the issuer that it has adopted local
debt policies concerning the use of debt and that the contemplated debt
issuance is consistent with those local debt policies. A local debt policy
shall include all of the following:
(A) The purposes for which the debt proceeds may be used.
(B) The types of debt that may be issued.
(C) The relationship of the debt to, and integration with, the issuer's
capital improvement program or budget, if applicable.
(D) Policy goals related to the issuer's planning goals and objectives.
(E) The internal control procedures that the issuer has implemented, or
will implement, to ensure that the proceeds of the proposed debt issuance
will be directed to the intended use.
(2) In the case of an issue of bonds the proceeds of which will be used
by a governmental entity other than the issuer, the issuer may rely upon a
certification by that other governmental entity that it has adopted the policies
described in subparagraphs (C), (D), and (E) of paragraph (1), and references
to the "issuer" in those subparagraphs shall be deemed to refer instead to
the other governmental entity.
0) The issuer of any debt issue of state or local government, not later
than 21 days after the sale of the debt, shall submit a report of final sale to
the commission by any method approved by the commission. A copy of the
final official statement for the issue shall accompany the report of final sale.
If there is no official statement, the issuer shall provide each of the following
documents, if they exist, along with the report of final sale:
(1) Other disclosure document.
(2) Indenture.
(3) Installment sales agreement.
(4) Loan agreement.
(5) Promissory note.
(6) Bond purchase contract.
(7) Resolution authorizing the issue.
(8) Bond specimen.
92
5— Ch. 307
The commission may require information to be submitted in the report
of final sale that it considers appropriate. The issuer may redact confidential
information contained in the documents if the redacted information is not
information that is otherwise required to be reported to the commission.
(k) (1) A public agency, whether state or local, shall submit an annual
report for any issue of debt for which it has submitted a report of final sale
pursuant to subdivision 0) on or after January 21, 2017. The annual report
shall cover a reporting period from July 1 to June 30, inclusive, and shall
be submitted no later than seven months after the end of the reporting period
by any method approved by the commission. Before approving any annual
method of reporting pursuant to this subdivision, the commission shall
consult with appropriate state and local debt issuers and organizations
representing debt issuers for purposes that shall include, but not be limited
to, making a proposed reporting method more efficient and less burdensome
for issuers. The annual report shall consist of the following information:
(A) Debt authorized during the reporting period, which shall include the
following:
(i) Debt authorized at the beginning of the reporting period.
(ii) Debt authorized and issued during the reporting period.
(iii) Debt authorized but not issued at the end of the reporting period.
(iv) Debt authority that has lapsed during the reporting period.
(B) Debt outstanding during the reporting period, which shall include
the following:
(i) Principal balance at the beginning of the reporting period.
(ii) Principal paid during the reporting period.
(iii) Principal outstanding at the end of the reporting period.
(C) The use of proceeds of issued debt during the reporting period, which
shall include the following:
(i) Debt proceeds available at the beginning of the reporting period.
(ii) Proceeds spent during the reporting period and the purposes for which
it was spent.
(iii) Debt proceeds remaining at the end of the reporting period.
(2) Compliance with this subdivision shall be required for each issue of
debt with outstanding debt, debt that has been authorized but not issued, or
both, during the reporting period.
(3) The commission may, if technology permits, develop an alternate
reporting method, provided that any alternate reporting method is in
furtherance of the purpose of collecting the data required by this subdivision.
Before approving any alternate annual method of reporting pursuant to this
subdivision, the commission shall consult with appropriate state and local
debt issuers and organizations representing debt issuers for purposes that
shall include, but not be limited to, making a proposed reporting method
more efficient and less burdensome for issuers.
U
92