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  ITEM 40.       
Meeting Date: 10/13/2020  
Submitted For: Lisette Camacho
Department: Budget and Finance  

Subject
RESOLUTION NO. R20-137     
 
A RESOLUTION OF THE COUNCIL OF THE CITY OF GLENDALE, MARICOPA COUNTY, ARIZONA, AMENDING THE DEBT MANAGEMENT POLICY FOR THE CITY OF GLENDALE.
Presented by: Lisette Camacho, Director, Budget and Finance 
Purpose and Recommended Action
This is a request for City Council to waive reading beyond the title and adopt a resolution revising the city's debt management policy. 
Background
The City's Financial Policies are adopted each year as part of the Annual Budget and include the City’s Capital Asset and Debt Management Policy. The current Council policy has been to maintain a "flat" levy which increases only by the value of new properties added each year.  Staff worked with its financial advisors from RBC Capital Markets and City's Bond Counsel from Greenberg Traurig to develop language for Council to consider adding specific flat levy policy language to the City's Debt Management Policy. 
Analysis
At the October 13, 2020 workshop, Council gave consensus to revise the City's Debt Management Policy on General Obligation bonds as follows:

Current Policy:
All projects funded with general obligation bonds will be undertaken only with voter approval as required through a bond election.

a. General Obligation debt is supported by secondary property tax revenues. The secondary property tax revenues assessed are based upon the ability to finance the City’s debt service obligations and the rate is dependent upon the revenue requirements and the assessed valuation of taxable property. At a minimum, the general obligation debt service fund balance will be at least 10% of the next fiscal year's property tax supported debt service. 

Proposed Policy:
All projects funded with general obligation bonds will be undertaken only with voter approval as required through a bond election.

a. General Obligation (G.O.) debt issued for non-enterprise funded purposes is supported by secondary property tax revenues. The secondary property tax revenues levied and assessed are based upon the amount of annual debt service payments required for the City’s non-enterprise supported G.O. bonds, and the property tax rate is determined based on the revenue requirements and the assessed valuation of taxable property. The City’s levy also includes an amount necessary to maintain a general obligation debt service fund balance of approximately, but not more than, 10% of the next fiscal year’s property tax supported debt service to cover property tax delinquencies and other potential shortfalls.
 
The City Council will not authorize the issuance of new G.O. bonds if the levy amount required to pay the debt service on existing G.O. bonds plus the new G.O. bonds exceeds the amount of the current year’s tax levy plus an amount of up to 2% per year for new growth (i.e. new property added to the tax rolls). This policy shall not prohibit the City from levying sufficient ad valorem taxes with respect to its outstanding G.O. bonds to the extent required by Arizona Revised Statutes, Section 35-458.
 
Previous Related Council Action
On October 13, 2020, Staff presented to Council information on the City's Debt Management Policy related to General Obligation bonds. 

On November 15, 2015, City Council Adopted Resolution 5038, a financial policy on cash and budget appropriation transfer. 
Community Benefit/Public Involvement
The community benefit of the City’s financial policies demonstrates sound financial decisions are made through a transparent and public process. 
Attachments
R20-137


    

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