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� � � � ' �� Memo To: Mayor and City Council Neal Beets, City Manager From: Chris Miller, Finance Direc �' Date: October 18,2004 Re: Discussion on the City's Conduit Debt Financing Policy Date: 10/18/04 Item: 8. Conduit Debt Financing Policies & Procedures Introduction Under Federal and Sta�e Statutes, municipalities are authorized to lend their bond issuance authority to non-profit �roups that provide education, housing, and long-term care facilities that are deemed in the best interest of the City. The City can also lend its bond issuance authority towards for-profit businesses for the purposes of preventing economic deterioration, or to spur industrial development. The bonds are considered conduit debt, and do not constitute a financial obligation in any part by the City. The City has participated in approximately twenty-five (25) financings of this type over the past thirty years. Determining whether to participate is guided by both legal and policy guidelines. Legally, the City faces a number of restrictions on the types and amounts of conduit financing that it can participate in within any one fiscal year. The City relies on its Bond Counsel to ensure that it complies with all federal and state statutes before issuing any conduit debt. Once a determination is made that the proposed financing is legally permissible, City Staff with assistance from Bond Counsel makes a determination of the following: 1) Does, or will, the applicant provide a service to Roseville residents 2) Will the financing promote greater and/or equal access to services in Roseville While these guidelines are somewhat general in nature, they do nonetheless provide a framework for evaluating whether to participate in conduit financing. The guidelines noted above, are consistent with the City's Collaboration and Cooperation Policy. An excerpt of the Policy reads: ... The Cfty Council encourages the searching out of opportunities to join with other governments, schools, and private organizations both for profit and non profit, to provide needed services to the community. A copy of the full text of the Policy is included as AttachmentA. It is believed that the Council last reviewed this Policy in 1998.