Debt Issuance and Management Policy
The City of Hayward has developed a comprehensive debt management policy that is intended to comply with Government Code Section 8855(i). The following parameters are to be considered before debt issuance:
The purposes for which debt may be issued shall be approved by City Council.
Legal debt limitations or limitations established by policy, including limitations on the pledge of the issuer's general credit, shall be calculated.
The City is bound by a provision in state law limiting indebtedness for California cities to 15% of the assessed value of all real and personal property of the city. This statutory limitation applies to bonded indebtedness of the City payable from the proceeds of taxes levied on property.
Types of debt permitted to be issued are:
short-term and long-term debt
general obligation and revenue debt
capital and variable rate debt
lease-backed debt, such as certificates of participation special obligation debt such as assessment district debt pension obligation bonds
conduit issues
State Revolving Loan Funds and Pools
inter-fund borrowing
taxable and non-taxable debt
land-secured debt payable from Mello-Roos special taxes or special assessments Prior to the issuance of any debt, the funding source for the debt service is identified and designated. The level of debt to which the City obligates itself is managed within available resources and represents a minimal cost to general taxpayers.
Except in extreme conditions as defined by Council, the issuance of new debt should not in and by itself jeopardize or lower the City’s bond ratings.
To the extent possible, the City plans the issuance of new debt to occur when resources are made available by the retirement of an existing obligation. By managing the timing of new debt, current City operations are not affected.
Authorized methods of sale shall be considered on a case by case basis, including competitive sale, negotiated sale, and private placement.
Method of selecting outside finance professionals shall be consistent with the City’s procurement practices.
Compliance with federal tax law provisions, such as arbitrage requirements.
In order to be an effective management tool, the parameters of the debt issuance and management must be compatible with the City’s goals pertaining to the capital improvement program and budget, the long-term financial plans, and the operating budget. Debt parameters should strike an appropriate balance between establishing limits on the debt program and providing sufficient flexibility to respond to unforeseen circumstances and new opportunities. Finally, the Director of Finance should consider debt parameters on a given issuance, and the debt program should be continuously monitored to ensure that it is in compliance with these parameters.
It is the policy of the City to ensure that proceeds of debt are spent only on lawful and intended uses. 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 Director of Finance. In those cases where it is not reasonably possible for the proceeds of debt to be held by a third-party trustee, Director of Finance shall retain records of all expenditures of proceeds through the final payment date for the debt.
Any approval of debt by the City Council that is not consistent with this Debt Policy shall constitute a waiver of this Debt Policy.
Debt Disclosure Policy
The City of Hayward intends to comply with all applicable federal and state securities laws. The following policy is establishing disclosure requirements for new debt issuance and continuing disclosure for ongoing debts.
Disclosure Requirements for New Debt Issuance
The Director of Finance will act as the City’s Disclosure Coordinator and shall review any Official Statement prepared in connection with any debt issuance by the City to ensure there are no misstatements or omissions of material information in any sections that contain descriptions of information prepared by the City.
In connection with this review of the Official Statement, the Disclosure Coordinator shall consult with third parties, including outside professionals assisting the City, and all members of City staff, to the extent that the Disclosure Coordinator concludes they should be consulted so that the Official Statement will include all “material” information (as defined for purposes of federal securities law).
As part of the review process, the Disclosure Coordinator shall submit all Official Statements for approval to the City Manager, and then to the City Council through a formal staff report that emphasizes the responsibilities of staff and elected officials under federal securities laws.
The approval of an Official Statement by the City Council shall not be approved as a consent item. The City Council shall undertake such review following consultation with the Disclosure Coordinator, to fulfill the City Council’s responsibilities under applicable federal and state securities laws. In this regard, the Disclosure Coordinator shall consult with the City’s disclosure counsel to the extent the Disclosure Coordinator considers appropriate.
Continuing Disclosure Requirements for Ongoing Debts
Under the continuing disclosure undertakings that the City has entered into in connection with its debt offerings, the City is required each year to file annual reports with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) system. Such annual reports are required to include updated financial and operating information, the City’s audited financial statements and file notices of certain events in EMMA.
The Disclosure Coordinator is responsible for establishing a system by which:
the City will make the annual filings required by its continuing disclosure undertakings on a complete and timely basis, and the City will file notices of enumerated events on a timely basis.
When the City makes statements or releases information relating to its finances to the public that are reasonably expected to reach investors and the trading markets, the City is obligated to ensure that such statements and information are complete, true, and accurate in all material respects. The City shall include a disclaimer on the City website: No information on the City’s website is intended to be the basis of or should be relied upon in making an investment decision. The information on this website is not posted for the purpose of reaching the investing public, including bondholders, rating analysts, investment advisors, or any other members of the investment community. Because each security issued by the City or its related entities may involve different sources of payment and security, you should refer for additional information to the official statement and continuing disclosure filings for the particular security, which can be found on the Municipal Security Rulemaking Board’s Electronic Municipal Market Access website: https://emma.msrb.org.
The Disclosure Coordinator shall ensure that the members of the City staff involved in the initial or continuing disclosure process and the City Council are properly trained to understand and perform their responsibilities. This training and understanding shall include Disclosure Procedures, the City’s disclosure obligations under applicable federal and state securities laws and the disclosure responsibilities and potential liabilities of members of the City’s staff and members of the City Council.
Financial policies
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