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~~~~/ l <br />To the Honorable Mayor and City Council <br />From the City Manager <br />To the Redevelopment Agency Board of Directors <br />From fhe Executive Director <br />To the Honorable Chairman of the Board of Directors- <br />Of the Public Financing Authority <br />From the Executive`Director and City Manager <br />March 26, 2007 <br />Subject <br />Proposed Debt Management Policy <br />Recommendation <br />It is recommended that the City Council, the Redevelopment Agency Board of Directors, <br />and the Public Financing Authority Board of Directors approve the proposed debt policy. <br />Background <br />Although not legally required, a number of public agencies have formally adopted debt <br />policies that establish policy guidelines for incurring debt. These policies are often broadly <br />worded documents that reflect the governing body's values concerning debt and debt <br />management. <br />Redwood City has never had a debt policy as up until about five years ago the City <br />organization (City of Redwood City, Redwood City Redevelopment Agency, and Redwood <br />City Public Financing Authority) was not very active in issuing debt as it retied upon cash <br />financing for most major capital projects. With the downtown revitalization and the recycled <br />water project the City has issued more debt and accordingly has more debt outstanding. <br />During the past several reviews with rating agencies staff was asked if the City Council has <br />approved a debt policy. Staff's response has been that the City does not have such a <br />policy. <br />Given the amount of debt currently outstanding and plans for issuing future debt staff is <br />recommending that the City Council adopt a debt policy. <br />Attached to this report is a proposed policy that the Finance Department has prepared in <br />consultation with Bill Euphrat, the City's Financial Advisor. This policy has been prepared <br />after reviewing policies adopted by several other cities and incorporating Redwood City's <br />needs and practices. The overa[I purpose of this policy is no# to unduly restrict future <br />financing options buff to primarily memorialize the practices that have emerged over the <br />past several years and demonstrate to the investment community that the City has given <br />sufficient thought to the more salient issues connected with debt financing. <br />This matter was presented to the Finance Committee at their meeting on March 12, 2007. <br />6.1 B <br />age 1 <br />S:1Council Staff Reports\Other\Debt Policy3-26-07,doc <br />