FINANCIAL POLICIES
FP - 5
IX. DEBT MANAGEMENT
The City will not issue long-term debt to finance current operations. Debt financing should only be used for long- term capital improvement projects or purchases of capital assets, such as water rights, that have a useful life exceeding the term of the financing. In addition, identified revenue sources shall be identified to allow for the principal, interest, and other related payments (debt service) of the long-term debt. The City will seek to maintain a high credit rating through sound financial practices as a basis for minimizing borrowing costs.
The City will monitor all forms of debt. Annually, the status of all long-term debt will be reported to the City Council in the annual budget.
The City will diligently monitor its compliance with bond covenants and continuing disclosures.
X. UNFUNDED LIABILITY
The City maintains three Section 115 Trusts to address the unfunded liability for the CalPERS – Miscellaneous Plan or the City of Hesperia, CalPERS – Safety Plan for the Hesperia Fire Protection District (HFPD), and the other postemployment benefits (OPEB) of the City. The Section 115 Trust plans allow the City to safely and securely set aside funds, separate and apart from the state retirement system, in a tax-exempt irrevocable trust to reduce pension and other postemployment liabilities and stabilize these costs. In addition to potential investment earnings, annual funding of the plans allows the City to maximize the benefits of the trust plans. The following policies indicate the annual funding provisions:
The City will annually contribute a minimum of five percent (5%) of the annual CalPERS required employer unfunded liability payment into the 115 Trust for the City miscellaneous and safety plan. The City will review the annual CalPERS actuarial valuation report and include into the budget the 5% calculation as transfer to the 115 pension plans.
The City will annually review the OPEB billing from CalPERS and contribute a minimum 15% to the 115 Trust of OPEB. The City will use the current year OPEB billing to be included in the next year budget. For example, the FY 2022-23 billing will be used for the FY 2023-24 Budget.
FINANCIAL POLICIES
FP - 6
JOINT RESOLUTION NO. 20243-2134
RESOLUTION HHA NO. 20243-035
RESOLUTION HFPD NO. 20243-024
RESOLUTION HWD NO. 20243-049
A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, THE BOARD OF DIRECTORS OF THE HESPERIA HOUSING
AUTHORITY, THE BOARD OF DIRECTORS OF THE HESPERIA FIRE
PROTECTION DISTRICT, AND THE BOARD OF DIRECTORS OF THE HESPERIA
WATER DISTRICT ADOPTING FINANCIAL POLICIES
WHEREAS, the City of Hesperia wishes to establish a comprehensive set of financial policies that will serve as a guideline for operational and strategic decision making related to financial matters; and
WHEREAS, financial policies are intended to establish guidelines for the City’s overall planning and management; and
WHEREAS, such policies will allow the City to maintain and enhance a sound fiscal condition; and
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, THE BOARD OF DIRECTORS OF THE HESPERIA HOUSING AUTHORITY, THE
BOARD OF DIRECTORS OF THE HESPERIA FIRE PROTECTION DISTRICT, AND THE BOARD OF DIRECTORS OF THE HESPERIA WATER DISTRICTS AS FOLLOWS:
Section 1. The recitals are true and correct and adopted as findings.
Section 2. That the City Council approves the Financial Policies (Exhibit A).
Section 3. If any section, sub-section, sentence, clause, or word in the Resolution is held to be invalid by decision of any court of competent jurisdiction or action of State legislation, such decision or legislation shall not affect the validity of the remaining portions of this Resolution.
Section 4. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
ADOPTED AND APPROVED this 20th 18th day of June 20232024.
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Brigit BenningtonLarry Bird, Mayor/Chair
ATTEST:
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Erin Baum, Assistant City Clerk/Secretary