HomeMy WebLinkAboutORDINANCE NO 15 01 233STATE OF GEORGIA ORDINANCE NO. 15-01-233
COUNTY OF FULTON
AN ORDINANCE TO AMEND ARTICLE VI, FINANCIAL MANAGEMENT PROGRAM,
DIVISION 7 -DEBT MANAGEMENT POLICY OF THE CITY OF MILTON CODE OF
ORDINANCES
BE IT ORDAINED by the City Council of the City of Milton, GA while in a regularly called council
meeting on January 21,2015 at 6:00 p.m. as follows:
SECTION 1. That the amendment of Article VI, Financial Management Program, Division 7
Debt Management Policy of the City of Milton Ordinances is hereby adopted and approved; and
is attached hereto as iffully set forth herein, and;
SECTION 2. All ordinances, parts of ordinances, or regulations in conflict herewith are
repealed.
SECTION 3. That this Ordinance shall become effective upon its adoption.
ORDAINED this the 21st day ofJanuary, 2015.
Attest:
Sudie AM Gordon, City Clerk
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STATE OF GEORGIA ORDINANCE NO. 15-01-233
COUNTY OF FULTON
Sec. 2-503. -Purpose; findings.
(a) Goals. The goal of this division is to:
(1) Maintain a sound fiscal position, thereby only utilizing long-term tax-exempt
debt (the "debt") to provide resources to finance needed capital improvements,
while accumulating adequate resources to repay the debt; and
(2) Maintain and improve the city's credit rating through strong financial
administration.
(3) To comply with all applicable federal and state laws, rules and regulations
related to the issuance of debt.
(b) Acknowledgments.
(1) The city acknowledges that failure to meet the demands of growth may inhibit
its continued economic viability, but also realizes that excess outstanding debt
may have detrimental effects on the ability of the city to meet its continuing
operational needs. Issuing debt commits the city's revenues several years into
the future, and may limit its flexibility to respond to changing service priorities,
revenue inflows, or cost structures. Adherence to this division helps ensure that
the city issues and manages its debt prudently in order to maintain a sound
financial position and protect its credit rating.
(2) Credit ratings are the rating agencies' assessment of the city's ability and
willingness to repay debt on a timely basis. Credit ratings are an important
indicator in the credit markets and can influence interest rates a borrower must
pay. Each of the rating agencies believes that debt management is a positive
factor in evaluating issuers and assigning credit ratings. Therefore,
implementing debt management practices will be viewed positively by the
rating agencies and could influence the city's credit rating and ultimately lower
borrowing costs.
(c) Scope. This division applies to all debt issued by or for the benefit of the city and its
related entities.
(d) Responsibility. The City Treasurer shall be administratively responsible for this
division. The City Treasurer shall be responsible for reviewing the requirements and
responsibilities of the city under this division with bond counsel on or before the
closing date of any debt issued by the city.
(Ord. No. 06-11-05. 11-21-20(6)
Sec. 2-504. -Conditions for issuing debt.
(a) Long-term. Debt financing for capital improvements and equipment will be generally
used when at least one of the following conditions exist:
(1) When one-time, noncontinuous projects (i.e., those not requiring annual
appropriations) are desired ;
(2) When the city determines that future users will receive a benefit from the capital
improvement that the debt financed;
(3) When the project is necessary to provide basic services to the city residents;
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STATE OF GEORGIA ORDINANCE NO. 15-01-233
COUNTY OF FULTON
(4) When the total debt, including debt issued by overlapping governments (i.e., the
county), does not constitute an unreasonable burden to the taxpayers; and
(5) Exhaustion of the use ofall other possible revenue sources provides no alternative
funding for capital projects.
(b) Short-term. The city will limit its short-term borrowing to cover cash flow shortages
through the issuance of tax anticipation notes.
(Ord. No. 06-11-05.11-21-20(6)
Sec. 2-505. -Sound financing procedures.
When the city utilizes debt financing, the following will occur to ensure that the debt is
soundly financed:
(1) Analysis of the financial impact, both short-term and long-term, of issuing the
debt;
(2) Conservatively projecting the revenue sources that the city will use to repay the
debt;
(3) Ensuring that the term of any long-term debt the city incurs shall not exceed the
expected useful life of the asset the debt financed; and
(4) Maintaining a debt service coverage ratio (i.e., for revenue secured debt) that
ensures that the revenues pledged for the repayment of the outstanding debt will
be adequate to make the required debt service payments.
(Ord. No. 06-lJ-05. ll-21-20(6)
Sec. 2-506. -Debt retirement requirements.
(a) Generally, borrowings by the city should be of a duration that does not exceed the
economic life of the capital improvement that it finances and, where feasible, should be
shorter than the projected economic life.
(b) To the extent possible, the city should design the repayment of debt so as to recapture
rapidly its credit capacity for future use.
(Ord. No. 06-Il-05, ll-21-20(6)
Sec. 2-507. -Full disclosure required.
(a) The city shall follow a policy of full disclosure in financial reporting and with the
preparation of a bond prospectus.
(b) The city shall record and comply with any continuing disclosure undertaking entered into
with respect to debt. The City Treasurer shall catalogue and determine any continuing
disclosure undertaking previously entered into by the city to ensure that its continuing
disclosure obligations will be updated and satisfied going forward.
(c) The City Treasurer will implement appropriate procedures to ensure that annually
recurring disclosure obligations are timely fulfilled.
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STATE OF GEORGIA ORDINANCE NO. 15-01-233
COUNTY OF FULTON
(d) Upon the occurrence of an event requiring the filing of an event notice under any
continuing disclosure obligation, the City Treasurer will ensure such event notice is filed
within ten business days of the occurrence of such event.
(Ord. No. 06-11-05. 11-21-20(6)
Sec. 2-508. -Compliance with local, state and federal regulations required.
(a) When issuing debt, the city shall comply with all legal and regulatory commission
requirements, including the continuing disclosure requirements. This compliance includes
adherence to local, state and federal legislation and bond covenants.
(b) The city manager's office is responsible for maintaining a system of recordkeeping and
reporting for the purpose of complying with the record-keeping and arbitrage rebate
compliance requirements of the federal tax code, as set forth more fully in Sections 2
513,2-516 and 2-517 hereof.
(c) General financial reporting and certification requirements embodied in bond covenants
shall be monitored to ensure that all covenants are complied with.
(d) The city will comply with amended SEC Rule 15c2-12 (the "Rule") by providing
secondary market disclosure for all long-term debt obligations which are subject to the
Rule. As required, the city will submit annual financial information to all nationally
recognized municipal securities repositories.
(Ord. No. 06-11-05. /1-21-20(6)
Sec. 2-509. -Maintaining credit ratings.
The city manager's office is responsible for maintaining relationships with the rating
agencies that assign ratings to the city's various debt obligations. This effort includes providing
periodic updates on the city's general financial condition along with coordinating meetings and
presentations in conjunction with a new debt issuance.
(Ord. No. 06-11-05, 11-21-20(6)
Sec. 2-510. -Other policies.
(a) All bond issue requests shall be coordinated by the city manager's office. Requests for
new bonds must be identified during the capital improvement program (CIP) process.
Opportunities for refunding outstanding bonds shall be communicated by the city
treasurer's office.
(b) Annual budget appropriations shall include debt service payments (i.e., interest and
principal) and reserve requirements for all debt currently outstanding
(c) Long-term borrowing shall be incorporated into the city's capital improvement plan.
(Ord. No. 06-11-05. /1-21-2(06)
Sec. 2-511. -Dissemination and training.
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STATE OF GEORGIA ORDINANCE NO. 15-01-233
COUNTY OF FULTON
(a) A copy of this division shall be disseminated to all relevant personnel in the city and to
the auditor.
(b) The City Treasurer shall provide appropriate training to all personnel directly involved in
the administration of tax-exempt debt to ensure they comply with the provisions of this
division. The City Treasurer shall consult, as appropriate, with qualified attorneys with
respect to the content of such training.
Sec. 2-512. -Review.
(a) This division shall be reviewed annually and, upon adoption of any amendments,
redistributed to all relevant personnel in the city and to the auditor.
(b) The City Treasurer shall annually conduct a due diligence review of all debt currently
outstanding to ensure proper compliance with each of the provisions of this division. If
the City Treasurer discovers non-compliance with any provisions of this division, steps
necessary to correct the non-compliance will be taken within ten business days of the
conclusion of the annual due diligence review. Records of all corrective action taken shall
be retained in accordance with this division.
Sec. 2-513. -Record keeping.
All records relating to the debt needed to comply with Section 6001 of the Internal Revenue
Code of 1986, as amended shall be maintained. These records shall be kept in paper or electronic
form and shall include, among other things,
(1) Basic records relating to the transaction (including the bond documents, the opinion
of bond counsel, etc.),
(2) Documents evidencing the expenditure of the proceeds of the debt,
(3) Documentation evidencing the use of debt-financed property by public and private
entities (e.g., copies of management contracts, leases and research agreements) and
(4) Documentation pertaining to any investment of debt proceeds (including the purchase
and sale of securities, SLG SUbscriptions, yield calculations for each class of
investments, actual investment income received from the investment of the proceeds
of the debt, guaranteed investment contracts and rebate calculations.
Such records must be maintained as long as the debt is outstanding, plus three years after the
final payment or redemption date of the respective debt.
Sec. 2-514. -Use of proceeds.
A list of all property financed with the proceeds of the debt shall be created and maintained. The
use of such property shall be monitored to ensure that such use does not constitute "private
business use" within the meaning of Section 6001 of the Internal Revenue Code of 1986, as
amended. Without limiting the foregoing, each contract, including, but not limited to,
management contracts and leases, relating to such property shall be reviewed by legal counsel
prior to the execution of such contract. The list of property shall be reviewed at least annually to
ensure that none of the property has been sold.
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STATE OF GEORGIA ORDINANCE NO. 15-01-233
COUNTY OF FULTON
Sec. 2-515. -Remedial action.
In the event that property financed with the proceeds of the debt is used in a manner that
constitutes "private business use" or the property is sold, the remediation provisions of Treasury
Regulation § 1.141-12 shall be carried out in consultation with bond counsel.
Sec. 2-516. -Yield restriction.
If bond counsel advises that a fund or account needs to be yield restricted (Le., not invested at a
yield in excess of the debt), the monies on deposit in such fund or account shall be invested in
United States Treasury Obligations -State and Local Government Series, appropriate "yield
reduction payments" shall be made if permitted by Section 6001 ofthe Internal Revenue Code of
1986, as amended, or the City Treasurer shall establish other procedures to ensure that such fund
or account is yield restricted.
Sec. 2-517. -Rebate.
At the time the debt is issued, the City Treasurer shall determine if he or she reasonably expects
that one of the arbitrage rebate exceptions will be satisfied. If the arbitrage rebate exceptions
relates to the time period over which the proceeds of the debt are spent, the City Treasurer shall
verify that the appropriate expenditures have been made at each milestone. If one of the
milestones is not satisfied or the City Treasurer does not reasonably expect that one of the
arbitrage rebate exceptions will be satisfied, an outside arbitrage rebate consultant shall be
retained unless the City Treasurer has determined that positive arbitrage will not be earned.
Sees. 2-518 -2-529. Reserved.
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