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HomeMy WebLinkAboutAdministration MINUTES 09-03-24Page 2 of 21 LCENTRAL SAN BOARD OF DIRECTORS: REGULAR MEETING OF THE MARIAHNLAURITZEN President CENTRAL CONTRA COSTA MICHAEL R. MCGILL SANITARY DISTRICT President ProTem ADMINISTRATION COMMITTEE BARBARAD. PILEC T TAD J ILECKI FLORENCE T WEDINGTON M I N U T E S PHONE: (925) 228-9500 FAX.- (925) 372-0192 Tuesday, September 3, 2024 1N1N1N.Centralsan.org 8:30 a.m. Cnmmittee Chair Mike McGill Member Barbara Hockett Guest: Justin Resullo, PFM Asset Management (left after Item 3.a.) Staff. - Katie Young, Secretary of the District Greg Norby, Deputy GM — Engineering & Operations Philip Leiber, Deputy GM - Administration Benjamin Johnson, Internal Auditor/Diversity, Equity, and Inclusion Officer Charles Mallory, Information Technology Manager Danea Gemmell, Planning & Development Services Division Manager Edgar Lopez, Capital Projects Division Manager (arrived during Item 3.a., left after Item 3.a.) Kevin Mizuno, Finance Manager Teji O'Malley, Human Resources and Organizational Development Manager Damasio Zepeda, Senior Engineer (left after Item 3.a.) Kim Stahl, Development Services Supervisor (left after Item 3.a.) Zachary Lee, Associate Engineer Morgan Lowry, Accounting Technician II (left during Item 3.a., returned during Item 4.a., left after Item 4.a.) Cindy Granzella, Human Resources Analyst Joy Smith, Administrative Services Assistant Karen DeLong, Administrative Services Assistant Stacey Durocher, Administrative Services Assistant (left after Item 3.c.) September 19, 2024 Regular Board Meeting Agenda Packet - Page 88 of 107 Page 3 of 21 Administration Committee Minutes September 3, 2024 Page 2 Call Meetina to Order Chair McGill called the meeting to order at 8:30 a.m. 2. Public Comments V.t'Ti- 3. Items for Committee Recommendation to Board a. Receive 2024 Permitting Resource Management Review and Biannual Findings Reporting Mr. Johnson reviewed the presentation included in the agenda materials... Regarding Chair McGill's question about tickets, Ms. Gemmell responded that they are service requests. Oracle tickets have declined from double to single digits but remain a challenge. She also explained that Ms. Stahl and her team are working diligently with Oracle to improve the problems with the system. Mr. Johnson stated that the Permit Counter requests are varied and can range from easy to complicated and may include other agencies. Requests are received from many different areas and need to be handled in a timely manner. Since rolling out Oracle, the cash management system has been streamlined, and was manual since the Oracle Enterprise Resource Planning (ERP) went live in 2020. In terms of work output, the team is expending a lot of effort and output with limited resources. In response to Chair McGill's inquiry regarding which sister agencies were included in benchmarking Central San's results, Ms. Gemmell stated that Dublin San Ramon Services District (DSRSD), Union Sanitary District, and Delta Diablo were included. Mr. Johnson opined that for a team of five the workload can be challenging, and a discussion on resource allocation may be needed in the future. The department's online presence will be enhanced to receive permits electronically once the Oracle implementation allows. Mr. Johnson responded to Chair McGill's request for clarification on what was meant by resource allocation stating that it could include additional staff, closing the permit counter at certain hours for time to process plans, or other creative ways to support the staff. Member Hockett inquired about the challenges in the department and innovative approaches that have been added. She praised the report as September 19, 2024 Regular Board Meeting Agenda Packet - Page 89 of 107 Page 4 of 21 Administration Committee Minutes September 3, 2024 Page 3 detailed and broad but said Mr. Johnson seemed hesitant to ask for critical infrastructure. Mr. Leiber opined that question of adequate resources is complicated. It is easier to assess with a steady state. Implementing systems make it difficult to identify whether this is a temporary increase or if the workload is generally trending higher. Mr. Norby added that benchmarking, overtime data, and evaluations generally indicate a strong case for additional resources. There is also strong and consistent messaging for Central San to maintain a high and thoughtful bar regarding staffing costs. Oracle implementation is a complicated factor, making it difficult to separate the volume of work versus staff time taken up by challenges with implementation. One of the Oracle objectives is a fully functional public facing electronic interface allowing for a higher level of self service in the permitting process. The expectation is that when that level of functionality is achieved, it will have qualitative impact on staff time. There are upcoming milestones for Oracle Permitting and Licensing (OPAL) functionality through the end of this calendar year, which should help inform these considerations. Member Hockett inquired if there was a difference made by turning lights down at 4:00 p.m. Ms. Gemmell expounded that having a "quiet hour," with no permits issued after 3:30 p.m., allows staff to answer phone calls and follow up on messages, and has made a significant, positive difference. In response to Member Hockett's inquiry regarding utilizing retiree positions, or other approaches to provide additional resources, Ms. O'Malley shared that the Executive Team evaluates vacancies district wide throughout all divisions and considers all options. Chair McGill opined that this is also a unique time with ten years' worth of construction, a housing shortage, and economic pressure. He agreed that the District does not want to unnecessarily add staff, but suggested there might be floating staff positions. Ms. Gemmell responded to Chair McGill's query regarding utilizing an Oracle user group, that there is not a group for Permitting, as it is too early, with too few other users, and the department is still sorting out functionality. Ms. Stahl stated that there are only four groups using Oracle at this time, and while Central San's implementation is unique, the District does interface with other agencies and counterparts, who seem to be experiencing the same issues. Ms. Gemmell added that Oracle is not yet a referenceable product. Permitting does not want to go live with the September 19, 2024 Regular Board Meeting Agenda Packet - Page 90 of 107 Page 5 of 21 Administration Committee Minutes September 3, 2024 Page 4 customer portal until problems are fixed. Oracle is working to fix the problems, but outcome and timeline are uncertain. Laserfiche and other internal products are also under consideration as ways to help develop an online presence. Mr. Johnson continued reviewing the Biannual Findings Report included in the agenda materials. Chair McGill explained that Central San sets rates from a forward projecting, public facing budget, which impacts grants and loans. With regard to the contract management effort, he asked if Legal Counsel is involved in an overview or standardization of all contracts. Mr. Leiber responded that the template creation involves Procurement, Capital Projects and review with the Legal department, to produce the best possible outcome. It is a large effort with multiple templates, but good progress is being made in these areas. Mr. Lopez added that enhanced reporting software systems are taking time, but by October there should be usable templates. The large design professional agreement contract has been drafted with Legal and is currently being used for the first time. Chair McGill mentioned past concerns with making timely payments to vendors. Mr. Lopez reiterated the importance of timeliness and stated this is an area for continuous improvement. Ms. Young stated there were no public comments. COMMITTEE ACTION: Receive the report and recommended Board receipt. b*. Conduct biennial review of Board Policy BP 029 — Debt Management and Continuing Disclosure Mr. Leiber provided an overview of the memorandum included in the agenda materials. Mr. Leiber reviewed the proposed changes with the Committee and added a change regarding an exception to the 60 percent debt funding limit over ten years to allow for extraordinary circumstances, which may include Nutrients. Other changes included adding definitions, and other cleanup type changes. Chair McGill requested that Staff confirm titles for consistency throughout the document. Ms. Young stated there were no public comments. COMMITTEE ACTION: Provided suggestions to staff and recommended Board approval. September 19, 2024 Regular Board Meeting Agenda Packet - Page 91 of 107 Page 6 of 21 Administration Committee Minutes September 3, 2024 Page 5 C. Conduct biennial review of Board Policy BP 041 — Pension Funding Mr. Mizuno provided an overview of the memorandum included in the agenda materials. Staff reviewed the policy with the actuarial group Foster & Foster, found no issues, and recommend only minor changes. Ms. Young stated there were no public comments. COMMITTEE ACTION: Recommended Board approval. d. Conduct biennial review of Board Policy BP 042 — Other Post -Employment Benefits (OPEB) funding Mr. Mizuno provided an overview of the memorandum included in the agenda materials. The recommended changes from Foster & Foster were to update the discount rate, the inflationary rate, and the healthcare rate. In response to an inquiry from Chair McGill as to why the rate ranges were stated in descending order instead of the more typical ascending, Mr. Mizuno stated the policy would be changed to ascending. Ms. Young stated there were no public comments. COMMITTEE ACTION: Recommended Board approval. 4. Other Items a. Receive semi-annual update on participation in Talksics Toastmasters Club Mr. Lee provided an overview of the information provided in the agenda packet. He thanked the Board and Mr. Bailey for providing lunch for the meetings. Toastmasters meetings will be added to the calendar going forward. Twenty people expressed interest in joining the club at the recent employee picnic. COMMITTEE ACTION: Received the update. b. Retiree Billing Audit Findings Ms. O'Malley provided an overview of the information included in the agenda materials. The District will reach out to the twelve retirees involved to create a customized payment plan that limits any financial burden. September 19, 2024 Regular Board Meeting Agenda Packet - Page 92 of 107 Page 7 of 21 Administration Committee Minutes September 3, 2024 Page 6 Chair McGill requested a progress update when the retirees have been contacted. COMMITTEE ACTION: Received the update. C. Receive update on Employee Benefits for Calendar Year 2025 Ms. O'Malley provided an overview of the information included in the agenda materials. The Open Enrollment period for 2025 begins on September 16 and ends on October 11, 2024. There have been significant increases and the cost for 2025 will be over budget by approximately $700,000. Retirees will be notified if their payments will increase. In response to Chair McGill's question whether average increases were weighted, Ms. O'Malley replied that for California Public Employees' Retirement System (Ca1PERS) it is overall average, but for the Central San, it is weighted. To an inquiry from Chair McGill regarding whether CalPERS has accountability with their providers to determine if rate increases are justified, Ms. O'Malley explained that CalPERS reviews plan designs and costing methods before entering negotiations with providers and presentation to members. Chair McGill opined that when the District's plans were self-administered, the rates were influenced by individual risk factors. Ms. O'Malley confirmed that with CalPERS age is a contributing factor, but in general, individual risk factors do not have an impact on rates. COMMITTEE ACTION: Received the update. 5. Announcements None. 6. Suaaestions for Future Aaenda Items a. Receive list of upcoming agenda items and provide suggestions for any other future agenda items Mr. Mizuno advised that at the next Administration Committee meeting staff will include the investment policy, and guests will be joining from the District's investment advisor, PFM Asset Management (PFMAM). September 19, 2024 Regular Board Meeting Agenda Packet - Page 93 of 107 Page 8 of 21 Administration Committee Minutes September 3, 2024 Page 7 Chair McGill reported that he is available only until 10:30 a.m. for future meetings. COMMITTEE ACTION: Received the list and provided input to staff. 7. Future Scheduled Meetings Tuesday, October 1, 2024 at 8:30 a.m. Tuesday, November 5, 2024 at 8:30 a.m. Tuesday, December 3, 2024 at 8:30 a.m. 8. Adjournment — at 9:53 a.m. * Attachments September 19, 2024 Regular Board Meeting Agenda Packet - Page 94 of 107 Page 9 of 21 3.b. (Handout) Number: BP 029 Related Admin. Procedure AP 029 Authority: Board of Directors Effective: September 7, 2017 Revised: November 18, 2021 Reviewed: November `' ��February 20, 2024 Initiating Dept./Div.: Administration/Finance BOARD POLICY DEBT MANAGEMENT AND CONTINUING DISCLOSURE PURPOSE The Government Finance Officers Association (GFOA) recommends' as a best management practice that state and local governments adopt comprehensive written debt management policies to improve the quality of decisions, articulate policy goals, provide guidelines for the structure of debt issuance, and demonstrate a commitment to long-term capital financial planning. Additionally, California SB 1029 requires public agency issuers of debt to adopt comprehensive written debt management policies pursuant to the GFOA recommendation, and to provide reports on any issuance prior to and after the debt sale, and on an ongoing basis, to the California Debt and Investment Advisory Commission (CDIAC).2 The purpose of this Debt Management and Continuing Disclosure Policy (Debt Policy) is to organize and formalize debt issuance and management related policies and procedures for the Central Contra Costa Sanitary District. This Debt Policy is applicable to both the District and the Central Contra Costa Sanitary District Facilities Financing Authority, both hereinafter referred to as "the District". This Debt Policy is intended to comply with Government Code Section 8855(i). General Manager maintained procedures amplify and provide additional guidance to staff related to the Debt Policy. The debt policies and procedures of the District are subject to and limited by applicable provisions of State and Federal law. This policy applies to all forms of debt as listed in Article X, TYPES OF DEBT. 11 1 In their publication "Best Practice Debt Management Policy" 2 https://leg info. legislature.ca.gov/faces/bi11NavClient.xhtml?bill_id=201520160SB1029 September 19, 2024 Regular Board Meeting Agenda Packet - Page 95 of 107 Page 10 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 2 of 13 II. POLICY OBJECTIVES The primary objectives of the District's debt and financing related activities are the following: • Maintain cost-effective access to the capital markets through prudent fiscal management policies and practices; • Specify parameters related to the prudent use of debt in the context of The District's rates and financial planning; o Ensure debt proceeds are expenditures for permissible uses as defined in this policy, and in accordance with bond covenants and other applicable requirements; • Minimize debt service commitments through effective planning and cash management; • Ensure the District is compliant with all applicable federal and state securities laws; • Protect the District's creditworthiness and achieve the highest practical credit ratings; and • Maintain the District's sound financial position. III. SCOPE AND DELEGATION OF AUTHORITY This Debt Policy will govern the issuance and management of all debt funded through the capital markets, including the selection and management of related financial and advisory services and products, and the investment of bond proceeds. Overall policy direction of this Debt Policy will be provided by the District's Board of Directors (Board). Responsibility for implementation of the Debt Policy and day-to-day responsibility for structuring, implementing, and managing the District's debt and finance program will lie with the General Manager or their designee (DireGteF of FinanGe andDeputy General Manager- Administration). The Board's adoption of the District's Annual Budget and Capital Improvement Program (CIP), or review of the financial plan, does not constitute authorization for debt issuance for any capital projects. This Debt Policy requires that the Board specifically authorize each debt financing. While adherence to this Debt Policy is required in applicable circumstances, the Board recognizes that changes in the capital markets, District programs, and other unforeseen circumstances may from time to time produce situations that are not covered by the Debt Policy and will require modifications or exceptions to achieve policy goals. In these cases, management flexibility is appropriate, provided specific authorization from the Board is obtained. September 19, 2024 Regular Board Meeting Agenda Packet - Page 96 of 107 Page 11 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 3 of 13 IV. ROLES AND RESPONSIBILITIES • General Manager and/or Deputy General Manager Provides oversight of debt program and recommendations on debt to the Board. • Executive Director of the Central Contra Costa Sanitary District Facilities Financing Authority — Provides oversight of debt program and recommendations on debt to the Board. • Dorontor of Cinanno andDeputy General Manager- Administration and Finance Manager— Has primary responsibility for debt issuance recommendations, financing transaction execution, oversight of bond proceeds expenditures, and ongoing debt management. • Board of Directors — Sets debt policy and authorizes individual transactions. V. ETHICS AND CONFLICTS OF INTEREST Staff and Board involved in the debt management program will not engage in any personal business activities that could conflict with proper and lawful execution of securing capital financing and are to comply with the District's Conflict of Interest Code. VI. INTEGRATION WITH OTHER FINANCIAL POLICIES AND DOCUMENTS The District is committed to long-term capital and financial planning, maintaining appropriate reserve levels and employing prudent practices in governance, management and budget administration. Policies related to these topics are adopted separately but affect this Debt Policy in the context of the overall long-term financial plan. The Board shall be presented with the results of the long-term financial plan in contemplation of any proposed rate adjustment where the capital budget, financial policies, proposed debt issuances and resulting debt service are presented as elements contributing to the calculation of overall projected customer rates. VII. DEFINITIONS The following are definitions of key terms used throughout and necessary to understanding this policy: • Bond Covenant — Essential agreement clauses between the bond issuer and investors. Thev are a set of leaallv bindina rules that ensure debt securities adhere to the anticipated terms and conditions of repayment with investors/lenders. September 19, 2024 Regular Board Meeting Agenda Packet - Page 97 of 107 Page 12 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 4 of 13 • Bond indenture — A contract between the issuer and bond trustee that describes information related specifically to the issuance or usage of bonds. It specifies the important features of a bond, such as maturity date, timing of interest payments, method of interest calculation. callabilitv. debt covenants. etc. • Continuing disclosure — Disclosures intended to assist investors in determining the suitability of a bond, as well as potential risks associated with the credit of the state or local government. Such disclosures are generally filed at least annually on the Electronic Municipal Market Access (EMMA) portal maintained by the Municipal Securities Rulemaking Board (MSRB). • Coupon rate — The annual interest rate paid on a bond, paid from issue date through maturitV. • Financial advisor— Also referred to as a "municipal advisor", a consultant with a fiduciary to a debt issuer, which provides advice with respect to the structure, timing, terms or other similar matters concerning a bond issuance. • Issuance discount— The amount by which the market price of a bond is lower than its principal due at maturity. Bonds are sold at a discount when the market interest rate exceeds the coupon rate of the bonds. • Issuance premium - The amount by which the market price of a bond is higher than its principal due at maturity. Bonds are sold at a premium when the market interest rate falls short of the coupon rate of the bonds. • Official statement — A document used by an underwriter to sell bonds to potential buvers which describes the essential terms of the bonds. It is the counterpart of the prospectus in the corporate finance industry. • Par value (of bonds) — Also referred to as "face amount" or "face value," it is the amount of money that bond issuers agree to pay the investor of bonds at maturity. It is fixed at the time of issuance, and unlike market value, does not change. • Underwriter— A firm or group of firms that purchase bonds directly from a bond issuer and resells them to investors. Underwriters are intermediaries between issuers and investors. Unlike municipal advisors, they do not serve as a fiduciary to the debt issuer. • Trustee (bond) — A financial institution that is granted trust powers, such as a commercial bank or trust company. This entity, in turn, has a fiduciary duty to the bond issuer to enforce the terms of a bond indenture. A trustee ensures that September 19, 2024 Regular Board Meeting Agenda Packet - Page 98 of 107 Page 13 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 5 of 13 bond interest payments and principal repayments are made as scheduled and protects the interests of bondholders if the issuer defaults. VWVIII. STANDARDS FOR USE OF DEBT FINANCING In financial planning, the District will evaluate the use of various alternatives including current year funding of capital projects through rates, various forms of debt financing, use of reserves, and inter -fund borrowing. The District will utilize the most advantageous financing alternative balancing the goals of long-term cost minimization, risk exposure, and compliance with generally accepted ratemaking principles. The District's debt management program will consider debt issuance where public policy, equity (including intergenerational equity), general ratemaking principles, economic efficiency and compliance with long-term financial planning parameters favor financing over cash funding. A. Use and Timing of Debt The District shall integrate its debt issuances with the goals of its Capital Improvement Program by timing the issuance of debt to ensure that projects are available when needed in furtherance of the District's public purposes (as articulated in, inter alia, the District's mission, vision, and goals) and are consistent with the rate and financial planning parameters specified in the District's long-term financial plans. The Board shall be presented with a long-term financial plan in each instance Sewer Service Charge rates are to be adjusted. 1. The long-term financial plans will specify an expected debt issuance amount over a decade or more long-term planning horizon. a. The District shall target rate or tax revenue funding of, at a minimum, the value of the collection system replacement program (specifically, pipeline replacement) component of the CIP. b. Not more than 60% of the overall CIP shall be financed with debt. absent extraordinary circumstances that would result in unreasonably high rate increases and intergenerational inequities due to the need to fund manor regulatorily mandated projects, and a finding by the Board of these conditions. . 2. All projects in the CIP are eligible to use debt financing, so long as the minimum rate or tax revenues are generated as described in A.1 of this section. This policy does not contemplate the use of debt financing to fund ongoing operating & maintenance expenditures; exceptions beyond a de-minimis amount would require approval of the Board. With respect to debt repayment and amortization, the debt repayment period should be structured so that the weighted average maturity of the debt does not exceed 100% of the expected average useful life of the project being financed. September 19, 2024 Regular Board Meeting Agenda Packet - Page 99 of 107 Page 14 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 6 of 13 B. Credit Quality All District debt management activities for new debt issuances will be conducted in a manner conducive to receiving the highest credit ratings possible consistent with the District's debt management objectives. As debt service coverage is a key ratings consideration, the District shall target a debt service coverage level of at least 2.Ox or greater for financial planning and ratemaking purposes. C. Ongoing Debt Administration and Internal Controls The District will maintain all debt -related records according to the District's Retention Policy. The District will maintain internal controls to ensure compliance with the Debt Policy (including use of bond proceeds for purposes specified in the applicable Bond Official Statements and in compliance with this debt policy), all debt covenants and any applicable requirements of Federal and State law, including but not limited to the following: initial bond disclosure, continuing disclosure, tax -exemption, post -issuance compliance, investment of bond proceeds (including, for example, any continuing disclosure obligations under Securities and Exchange Commission (SEC) Rule 15c2-12, and tax covenants, and related federal tax compliance requirements such as arbitrage restrictions and rebate requirements), and annual transparency reporting to CDIAC. These internal controls are further specified in the related Debt Management and Continuing Disclosure (AP 029). D. Rebate Policy and System The District will develop a system of reporting interest earnings that relates to and complies with Internal Revenue Code requirements relating to rebate, yield limits and arbitrage. The District will accurately account for all interest earnings in debt -related funds to ensure that the District is compliant with all debt covenants and with state and federal laws. The District will invest funds in accordance with the investment parameters set forth in each respective bond indenture, and as permitted by the District's Statement of Investment Policy (BP 005). SIX. FINANCING CRITERIA When District staff determines the use of debt is appropriate, staff shall provide a report to the Board that: describes the intended use of the financing proceeds (funding for new projects or to refund existing bonds); September 19, 2024 Regular Board Meeting Agenda Packet - Page 100 of 107 Page 15 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 7 of 13 • recommends a specific debt type to include duration, type, interest rate characteristics, call features, credit enhancement or financial derivatives to be used in the transaction; • presents the impact of the bonds on the District's forecasted rates based on the anticipated maturity schedule. For refunding transactions, a comprehensive report on the debt to be redeemed, the replacement debt, and the anticipated benefits of the transaction shall be provided. TERMS AND CONDITIONS OF DEBT The District will establish all terms and conditions relating to the issuance of debt, and will control, manage, and invest all debt proceeds. The District staff will specify to the Board proposed debt terms, coupon structure, debt service structure, redemption features, any use of capitalized interest, and lien structure. X-.XI. TYPES OF DEBT The following types of debt are allowable under this Debt Policy, subject to applicable law, and the District's statutory authority to issue debt: • General obligation bonds • Commercial paper • Bond or grant anticipation notes • Lease revenue bonds, certificates of participation and lease -purchase transactions • Revenue Bonds (including new money issuances through a Joint Powers Authority), or refunding Revenue Bonds issued directly by Central San. • Other revenue bonds, including private placement obligations • Tax and revenue anticipation notes • Land -secured financings, such as special tax revenue bonds issued under the Mello -Roos Community Facilities Act of 1982, as amended, and limited obligation bonds issued under applicable assessment statutes • Refunding Obligations • State Revolving Fund Loans • Lines of Credit • Letters of Credit • The Board may from time to time find that other forms of debt would be beneficial to further its public purposes and may approve such debt without an amendment of this Debt Policy. The use of certain derivative products to hedge variable rate debt, such as interest rates swaps, may be considered to the extent the District has such debt outstanding or under consideration. The District shall exercise extreme caution in the use of derivative September 19, 2024 Regular Board Meeting Agenda Packet - Page 101 of 107 Page 16 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 8 of 13 instruments for hedging purposes, and may consider their utilization only when sufficient understanding of the products and sufficient expertise for their appropriate use has been developed. A comprehensive derivative policy shall be adopted by the District prior to any utilization of such instruments. X-LXII. CREDIT ENHANCEMENTS The District may consider the use of credit enhancement on a case -by -case basis, evaluating the economic benefit versus cost for each case. Only when a clearly demonstrable savings or other measurable advantages can be shown will enhancement be considered and authorized. XWXIII. REFINANCING OUTSTANDING DEBT The District will periodically evaluate outstanding bond issues for refunding opportunities and will bring to the attention of the Board those opportunities that are in the District's interest. Reports to the Board on potential refunding shall describe anticipated savings and the structure of refunding and refunded debt, and any refunding transaction executed will be followed with a report on actual savings. X44-.XIV. METHODS OF ISSUANCE District bonds may be sold on a competitive or negotiated basis (including private placement). A recommendation regarding the proposed use of either method shall be prepared by staff and provided to the Board prior to or concurrent with the proposed issuance. X4 V-. XV. MARKET RELATIONSHIPS A. Ratina Aaencies and Investors The General Manager and designees (Deputy General Manager FinanGe ani-I _Administration) will be responsible for maintaining the District's relationships with rating agencies, which will typically include two or more of the nationally recognized statistical rating agencies. B. Board Communication The General Manager will make available to the Board any ratings report or other relevant feedback provided from rating agencies and/or investors regarding the District's financial strengths and weaknesses and recommendations for addressing any weaknesses. C. Continuing Disclosure The District will remain in compliance with SEC Rule 15c2-12 addressing continuing disclosure obligations. The District will also comply with state September 19, 2024 Regular Board Meeting Agenda Packet - Page 102 of 107 Page 17 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 9 of 13 reporting requirements specified in SB 1029, which require initial and ongoing debt reporting requirements for California public agencies. D. Rebate Reporting The use and investment of bond proceeds shall be monitored to ensure compliance with arbitrage restrictions. E. Other Jurisdictions From time to time, the District may issue bonds to fund projects that provide a benefit to other public entities, (e.g. City of Concord). The District will conduct such analyses as deemed necessary to assure adequate cost recovery for such funding and to mitigate risks to the District (including consideration of the use of limited bonding capacity). The District may participate in a joint powers authority with one or more other eligible entities pursuant to Section 6500 of the California Government Code if deemed advantageous and appropriate and approved by the Board. XV.XVI. CONSULTANTS A. Selection of Financing Team Members The General Manager or designee will make recommendations for all financing team members, with the Board providing final approval. Financing team members may include a financial advisor, bond counsel, disclosure counsel (which may be the same firm as bond counsel), and underwriter. Selection of those financing team members shall be in accordance with Professional Service and Consultant provisions of the District's procurement policies, and consistent with Chapter 2.36 "Purchasing and Materials Policy" of the District Code. In the event of a competitive bond sale, the District's debt will be offered to the underwriter providing the most cost advantageous proposal to the District. B. Financial Advisor The District may utilize a financial advisor to assist in its debt issuance and debt administration processes as is deemed prudent and necessary by management and in compliance with MuniGipal SeGurities Rulemaking Board (MSRB4 regulations. C. Bond Counsel District debt will include a written opinion by legal counsel affirming that the District is authorized to issue the proposed debt and that the District has met all constitutional and statutory requirements necessary for issuance and a determination of the proposed debt's federal income tax status. The approving opinion and other documents relating to the September 19, 2024 Regular Board Meeting Agenda Packet - Page 103 of 107 Page 18 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 10 of 13 issuance of debt will be prepared by counsel with extensive experience in public finance and tax issues. D. Disclosure Counsel The District may utilize a separate firm to serve as disclosure counsel as it deems necessary. If cost effective, bond counsel may also serve as disclosure counsel. September 19, 2024 Regular Board Meeting Agenda Packet - Page 104 of 107 Page 19 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 11 of 13 E. Underwriter The District will have the right to select a senior manager for a proposed negotiated sale, as well as co -managers and selling group members, as appropriate. F. Conflict of Interest Disclosure by Financina Team Members All financing team members will be required to provide full and complete disclosure, relative to agreements with other financing team members and outside parties. The extent of disclosure may vary depending on the nature of the transaction. However, in general terms, no agreements will be permitted which could compromise the firm's ability to provide independent advice that is solely in the District's interests (to the extent the firm's role involves a duty to do so) or which could reasonably be perceived as a conflict of interest. September 19, 2024 Regular Board Meeting Agenda Packet - Page 105 of 107 Page 20 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 12 of 13 XV1-XV11. INITIAL AND CONTINUING DISCLOSURE COMPLIANCE A. Disclosure Coordinator and Overall Requirements for Initial and Continuing Disclosure The DireGtor of Finonno and Administration Deputy General Manager (or as designated, the Finance Manager) for the District shall be the disclosure coordinator of the District (Disclosure Coordinator). The Disclosure Coordinator shall perform the following functions: • Ensure that any Official Statement meets appropriate standards and is approved by the Board as required. • Ensure that initial and continuing disclosure obligations undertaken by the District related to each debt issuance are met, including State of California requirements, and MSRB requirements that the District commits to undertake in the Continuing Disclosure Certificate or Agreement over the life of the bonds to investors. o Initial Disclosure requirements include preparation of the Bond Official statement and reports on the issuance to the CDIAC. o Ongoing disclosure requirements include annual reports with the MSRB EleGtronln Municipal Market AGGess (EMMA) system and the CDIAC. XVII.XVIII. EXCEPTIONS In the event there are any deviations or exceptions from the Debt Policy when a certain bond issue is structured, those exceptions will be discussed in the staff reports when the bond proposal is agendized for Board consideration. September 19, 2024 Regular Board Meeting Agenda Packet - Page 106 of 107 Page 21 of 21 Number: BP 029 DEBT MANAGEMENT AND CONTINUING DISCLOSURE Page 13 of 13 XV!!LXIX. POLICY CONSIDERATION This policy shall be reviewed on a biennial basis. Any changes must be approved by the Board, as well as the individual(s) charged with maintaining internal controls. [Original retained by the Secretary of the District] September 19, 2024 Regular Board Meeting Agenda Packet - Page 107 of 107