Laserfiche WebLink
6.3.B. - Page 1 <br /> REPORT <br /> To the Honorable Mayor and City Council <br /> From the City Manager <br /> May 23, 2016 <br /> SUBJECT <br /> Debt Disclosure Policies and Procedures <br /> RECOMMENDATION <br /> Adopt, by resolution, Debt Disclosure Policies and Procedures <br /> BACKGROUND <br /> The City of Redwood City is a municipal bond issuer, and as such, is subject to certain <br /> legal and contractual requirements relating to the disclosure of information to investors <br /> at the time of initial issuance of bonds and on a continuing basis thereafter. The <br /> Securities and Exchange Commission (SEC) has stressed the importance of municipal <br /> issuers adopting written disclosure policies and procedures to ensure the accurate and <br /> timely communication of material information to municipal market investors. <br /> ANALYSIS <br /> SEC Rule 15c2-12 generally prohibits any underwriter from purchasing or selling <br /> municipal securities unless the issuer has committed to providing continuing disclosure <br /> regarding the security and issuer, including information about its financial condition and <br /> operating data. Rule 15c2-12 also generally requires that any final official statement <br /> prepared in connection with a primary offering of municipal securities contain a <br /> description of any instances in the previous five years in which the issuer failed to <br /> comply, in all material respects, with any previous commitment to provide such <br /> continuing disclosure. <br /> The SEC has filed a number of enforcement actions against underwriters under anti- <br /> fraud provisions contained in the Securities Act of 1933 to the extent they failed to <br /> exercise adequate due diligence in determining whether issuers have complied with <br /> such obligations and against issuers for falsely stating to bond investors that they had <br /> been properly providing annual financial information and notices required as part of prior <br /> bond offerings. <br /> Recently, the SEC has required municipal issuers that settle enforcement actions to <br /> adopt written disclosure policies and procedures and to provide appropriate training on <br /> disclosure obligations to elected officials and City staff that participate in the bond <br /> issuance process. Although there is no statutory requirement to implement written <br />