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The bonded indebtedness of the City shall not be increased beyond fifteen per cent of the assessed value of all taxable real and personal property within the City. The indebtedness of any special local district or of the Los Angeles City School District shall not be included in computing the debt limit herein provided.
SECTION HISTORY
Based on Charter, Secs. 3(3) and 3(4).
Amended by: Ord. No. 173,306, Eff. 6-30-00, Oper. 7-1-00.
(a) The City’s Debt Management Policy shall provide policies for the issuance of bonds, notes, and other evidences of indebtedness (collectively, the “Bonds”). The City Administrative Officer (which is the Director of the Office of Administrative and Research Services pursuant to Section 114 of the City Charter) shall: (1) prepare and present recommendations for changes to the Debt Management Policy; (2) be the Debt Administrator for the City; and (3) oversee and be responsible for the issuance and management of Bonds secured by the City General Fund or other special purpose funds, but not including Bonds issued by the Departments of Airports, Harbor, Water and Power, the Housing Department, and the Industrial Development Authority through the Economic and Workforce Development Department (EWDD).
(b) Certain key provisions of the City’s Debt Management Policy are as follows:
DEBT MANAGEMENT POLICY
Objective
The following represent key objectives of the Debt Management Policy:
• To mitigate risk and support sound decision-making with regard to long-term financing commitments.
• To comply with federal and state laws and regulations, including disclosure and reporting requirements.
• To incorporate best practices into the City's issuance and management of its debt obligations.
• To ensure that the City's debt is consistent with the City's planning goals and objectives, and capital improvement program or budget, as applicable.
• To minimize the cost of debt.
• To maintain and improve the City's credit ratings on its debt.
• To establish selection criteria for retaining the best qualified financial consultants, attorneys, underwriters, and other financing participants through fair procurement processes.
Debt Affordability and Capacity
(i) The Debt Affordability Ceiling for debt service on non-voter approved debt shall be no more than 6 percent of General Revenues. The 6 percent ceiling may be exceeded only in the following situation: (1) if there is a guaranteed new revenue stream for the debt payments and the additional debt will not cause the ratio to exceed 7.5 percent; or (2) if there is not a guaranteed revenue stream but the 6 percent ceiling will only be exceeded for one year.
(ii) The Debt Affordability Ceiling for debt service on voter-approved and non-voter approved debt combined shall be no more than 15 percent.
Post-Issuance Tax Compliance
The City Administrative Officer is responsible for the development and implementation of procedures to ensure the compliance with applicable federal tax laws to maintain the tax-exempt status of its debt obligations. The City Administrative Officer will have primary responsibility to coordinate with the applicable City departments and monitor the use of tax-exempt bond proceeds.
Disclosure
(i) It is the policy of the City to fully comply with applicable state and federal securities law, and with the terms of its contractual agreements executed pursuant to Rule 15c2-12, adopted by the Securities and Exchange Commission, to provide financial and operating data periodically and timely notices of certain events or other reporting requirements.
(ii) The City Administrative Officer is responsible for the development and implementation of procedures to ensure compliance with the City’s Disclosure Policy. The procedures promulgated by the City Administrative Officer will establish a framework for compliance with, and adherence to, applicable state and federal securities laws relating to disclosure with respect to the City’s primary offering documents, continuing disclosure certificate and filings, required state reporting, audited financial statements, websites and social media, and any public statements, among other things, as determined by the City Administrative Officer.
SECTION HISTORY
Added by Ord. No. 173,306, Eff. 6-30-00, Oper. 7-1-00.
Amended by: In Entirety, Ord. No. 186,917, Eff. 3-22-21; Ord. No. 187,122, Eff. 8-8-21.
The provisions of the Debt Management Policy, the Policies and Procedures for Mello-Roos and Special Assessment Districts, and the Reserve Fund Policy are directory only and any failure to comply with their provisions or any departure from them shall not affect the validity of the sale of any bonds or the indebtedness or obligation of the City or the related Community Facilities Districts.
SECTION HISTORY
Added by Ord. No. 173,306, Eff. 6-30-00, Oper. 7-1-00.
Prior to the adoption of any ordinance or resolution authorizing the incurring of any indebtedness by the City or the placing of any debt authorization on the ballot, a debt impact statement shall be prepared by the Director of the Office of Administrative and Research Services, pursuant to Charter Section 325. The Director of the Office of Administrative and Research Services shall also prepare the financial impact statements for ballot measures as required by State law.
SECTION HISTORY
Added by Ord. No. 173,306, Eff. 6-30-00, Oper. 7-1-00.
The Controller shall monitor the level of debt incurred by the City and report periodically to the Mayor and Council on City debt, pursuant to Section 261(j) of the Charter.
SECTION HISTORY
Added by Ord. No. 173,306, Eff. 6-30-00, Oper. 7-1-00.
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