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Consent-General Government # 13.
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| Board of Supervisors |
Financial Services |
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| Subject |
| Approve the revised Policy on Borrowing, Debts and Obligations. (No general fund impact) (Newens) |
| Recommended Action |
| Approve the revised Policy on Borrowings, Debts and Obligations to conform with new laws and regulations. |
| Strategic Plan Goal(s) |
| Operational Excellence |
| Reason for Recommended Action/Background |
In March 2013, the Board of Supervisors overhauled the county debt policy to support the financial sustainability goal. Since then there has been increased legislative activity intended to shore up accountability in the public sector in response to highly publicized bankruptcy and public debt scandal cases. As a result, several new laws and regulations have been instituted, and necessitate an update of our debt policy. Changes have been prescribed and recommended from the U.S. Securities and Exchange Commission (SEC), California law (Senate Bill 1029), the California Debt and Investment Advisory Commission, the rating agencies (such as Standard and Poor's) and the Government Finance Officers Association.
New State law (SB 1029) resulted in the most changes. The new law, Government Code section 8855(i), requires that all local agency debt policy state:
- Purpose for debt and use of proceeds
- Type of debts that may be issued
- Relationship of debt and integration with the issuer's capital improvement program or budget
- Policy goals related to the issuer's planning goals.
- Internal control procedures to ensure proceeds of the debt will be directed to intended uses.
Staff has culled all the prescribed and recommended changes and has proposed revisions to the current policy to ensure that it reflect these recent statutory changes as well as best practices. These changes are highlighted in the red-lined version of the revised policy in Att. A - Revised policy (redlined). A clean version is in Att. B - Revised policy (clean). |
| Collaborations (including Board advisory groups and external partner agencies) |
| Staff has worked with financial consultants (KNN Consulting) to develop these revisions. The County Debt Committee has reviewed and approved the revisions to the Debt Policy in its meeting of May 12, 2017. |
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