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6.H. - Page 1 of 28 <br />/<�ik <br />Redwood <br />CitylCallifornia <br />Faunded 1867 <br />A,&/ <br />DATE: May 20, 2019 <br />SUBJECT <br />STAFF REPORT <br />To the Honorable Mayor and City Council <br />Debt Disclosure Policies and Procedures Update <br />RECOMMENDATION <br />From the City Manager <br />Adopt a resolution approving the updated Debt Disclosure Policies and Procedures. <br />STRATEGIC INITIATIVE <br />Government Operations <br />BACKGROUND <br />The City of Redwood City is a municipal bond issuer, and as such, is subject to certain legal and contractual <br />requirements relating to the disclosure of information to investors at the time of initial issuance of bonds <br />and on a continuing basis thereafter. The Securities and Exchange Commission (SEC) has stressed the <br />importance of municipal issuers adopting written disclosure policies and procedures to ensure the <br />accurate and timely communication of material information to municipal market investors. <br />Although there is no statutory requirement to implement written disclosure policies and procedures, the <br />City's bond counsel and disclosure counsel both recommended the City do so as a best practice. As such, <br />the City Council adopted a disclosure policy in May of 2016. <br />In 2018, the SEC adopted amendments to the continuing disclosure provisions to address concerns that <br />investors in publicly offered debt do not have adequate or timely information about privately placed <br />obligations. The Amendments also added a definition of "financial obligation" to the Rule; a "financial <br />obligation" is a privately placed obligation, such as a bank loan or a direct placement of securities. The <br />City is obligated to report any new material financial obligation (or any event that reflects financial <br />difficulties of a financial obligation) through the same process as other reportable events for new debt <br />issued after February 27, 2019. Two legal firms have reviewed and recommended changes to the <br />attached, updated Policy to meet this new requirement: Mandell Municipal Counseling, and Straddling <br />Yocca Carlson and Rauth, both well-qualified and highly regarded firms familiar with the SEC regulations <br />and the City's processes. <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />297 <br />