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C. 98
To: Board of Supervisors
From: David Twa, County Administrator
Date: December  11, 2012
The Seal of Contra Costa County, CA
Contra
Costa
County
Subject: Resolution No. 2012/333 Revising County Debt Management Policy, which Replaces Resolution 2006/333
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On:   12/11/2012
APPROVED AS RECOMMENDED OTHER
Clerks Notes:

VOTE OF SUPERVISORS

AYE:
John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor
Contact: Lisa Driscoll, County Finance Director (925) 335-1023
cc: Robert Campbell, Auditor-Controller     Russell Watts, Treasurer-Tax Collector     Catherine Kutsuris, Director/Department of Conservation and Development    
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED:     December  11, 2012
David Twa,
 
BY: , Deputy

 

RECOMMENDATION(S):

ADOPT Resolution No. 2012/333 revising the County's Debt Management Policy to include appendices for Post-Issuance Tax Compliance Procedures for Tax-Exempt and Build America Bonds (included administratively on October 7, 2010), Annual Disclosure Management, Community Facilities Districts, Multifamily Mortgage Revenue Bond Program, and the Successor Agency to the former Contra Costa County Redevelopment Agency.

FISCAL IMPACT:

No specific fiscal impact.

BACKGROUND:

On December 7, 2006 the Finance Committee reviewed and discussed a report regarding establishing a County Debt Management Policy. The Committee directed staff to report to the full Board on December 19, 2006 the recommendation to adopt a formal County Debt Management Policy. A formal policy was adopted on December 19, 2006 (Resolution 2006/773).  
BACKGROUND: (CONT'D)
      
    During the 2006 calendar year, the Board of Supervisors worked exceptionally hard to address the County’s financial issues. The Board of Supervisors set very ambitious and necessary goals for lowering cost growth, balancing the budget, and increasing reserves. These solutions were aimed at addressing both short and long term needs and improving the County’s future ability to maintain public services. There are four major financial areas the County Administrator’s office identified which benefited from formal policies:   
    • Budget Policy (established November 2006)
    • General Fund Reserve Policy (established December 2005)
    • Facilities Maintenance (included in Budget Policy)
    • Debt Management Policy (December 2006)
      
    Debt affordability standards help the County to evaluate when, why, and how much debt should be issued. In addition to debt affordability standards, the County also adopted a formal Debt Management Policy. The Debt Management Policy:   
    • Establishes parameters for issuing and managing debt
    • Provides guidance to decision makers so as not to exceed the debt affordability standards
    • Directs staff on objectives to be achieved both pre- and post-issuance
    • Promotes objectivity in decision-making and limits the role of political influence
    • Facilitates the process by considering and making important policy decisions in advance of an actual financing
    Periodically, policies should be revised to keep current with best practices or changes in laws. In October of 2010, the Debt Affordability Advisory Committee administratively added two additional appendix to the Debt Management Policy (Appendices 2 and 3). The purpose of the Post-Issuance Tax Compliance Procedures for Tax-Exempt and Build America Bonds appendix (Appendix 2) was to establish policies and procedures in connection with tax-exempt bonds and "Build America Bonds" issued by the County of Contra Costa and the County of Contra Costa Public Financing Authority so as to ensure that the County complies with all applicable post-issuance requirements of federal income tax law needed to preserve the tax-exempt or Build America bonds status of bonds. In recognition of the importance of the County meeting its disclosure obligations pursuant to S.E.C. Rule 15c(2)-12, the Committee directed the Finance Director to annually update the Disclosure Requirements Listing that appears in Appendix 3 as well as cause timely filing by the Dissemination Agent of the requisite Annual Reports required under the respective Continuing Disclosure Certificates. The Finance Director shall also work closely with Disclosure Counsel and the Dissemination Agent to make sure all required Events Notices are timely filed.  
      
    The following updates are now recommended:
    1. Section I of the Policy should be amended to require the Debt Affordability Advisory Committee’s review of the debt performance of the Community Facilities Districts (Appendix 4), Multifamily Mortgage Revenue Bond Program (Appendix 5), and the Successor Agency to the former Contra Costa County Redevelopment Agency (Appendix 6) to assure that prudent debt management practices extend to these important debt issuers.
    2. Section IV.B of the Policy should be updated to require the County to issue Requests for Qualifications (RFQs) for financial advisor, bond counsel, disclosure counsel and tax counsel every three years. RFPs were last issued in 2010, so this task will next be scheduled to be completed in 2014. The Committee believes a consistent approach would be beneficial and therefore should be included in the Policy.
    The updated policy is attached as Resolution 2012/333.  

    CONSEQUENCE OF NEGATIVE ACTION:

    Policy will be out of date and will not include important disclosure updates or policies for Community Facilities Districts, the Multifamily Mortgage Revenue, Bond Program, or the Successor Agency to the County Redevelopment Agency.
    CHILDREN'S IMPACT STATEMENT:

    None.

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