Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
FEBRUARY 14, 2018
Subject
SUBJECT: DEBT MANAGEMENT
Action
ACTION: APPROVE ADOPTION OF DEBT POLICY
Heading
RECOMMENDATION
Title
ADOPT the Debt Policy (Attachment A).
Issue
ISSUE
The Debt Policy requires that it be reviewed annually and presented to the Board for approval if changes are needed. State law requires California issuers submit a report of proposed debt issuance to the California Debt and Investment Advisory Commission (CDIAC) no later than 30 days prior to the sale of any debt issue. Effective 2017, California legislation requires the report of proposed debt issuance include a certification by the issuer that it has adopted a debt policy.
Discussion
DISCUSSION
The purpose of the Debt Policy is to establish guidelines for the issuance and management of our debt. The proposed changes to the Debt Policy reflect changes in debt issuance and disclosure standards and practices, as well as the inclusion of internal controls to track and report the use of debt proceeds as required by the passage of SB 1029. The revised policy also incorporates the governance of future Measure M debt obligations in addition to Metro's existing sales tax debt. Other changes include edits to reflect appropriate titles and edits made to clarify language and improve readability. A redlined version of the Debt Policy showing comprehensive changes from the last board approved Debt Policy is included as Attachment A.
POLICY IMPLICATIONS
The Debt Policy governs the management of our overall debt program. The policy sets the guidelines to be used when considering the use of debt, as well as in the on-going management of existing obligations. Guidance is provided specifying appropriate uses, selection of acceptable debt and lease products and debt issuance limits. The processes for selection of professional services and financial products are also specified.
As of January 1, 2018, we had $4.0 billion of bonds outstan...
Click here for full text