Resolution No. 5014 - Laserfiche WebLink

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Exhibit 1 Excerpt from City Debt Policies CONDUIT FINANCINGS 1. Conduit financings are financings that the City provides for the benefit of non - governmental entities to allow those non - governmental entities to obtain low cost, tax - exempt financing. Conduit financings are not secured by any revenues or assets of the City except revenues and assets provided by the non- governmental entities that benefit from the conduit financings. 2. The United States Internal Revenue Code substantially limits the ability of the City to provide conduit financing; conduit financings are only available for small manufacturing facilities, facilities used by qualified 501(c)(3) organizations, certain kinds of low income housing projects, and other projects that can be financed with "qualified bonds" as defined in the Internal Revenue Code. 3. Recognizing that the City is able to issue debt for broad purposes, it may be appropriate to enter into a conduit financing on behalf of another party when the City Council determines that the proposed project will provide a general benefit to City residents and/or the City economy. 4.: Conduit financing will be considered only when a project is consistent with the city's overall service and policy obj ectives. 5. The City should not incur any moral or financial obligation under a conduit borrowing. 6. The City will only consider conduit financings that will.insulate the City from any credit risk. 7. Any financing issued through the City must qualify for an investment grade rating by one of the . nationally recognized statistical rating agencies or provide alternative credit enhancement from a third party satisfactory to the City or a corporate guaranty if the corporation carries an investment grade rating. 8. All expenses related to conduit financing will be borne by the third -party applicant for whom the debt is being issued. g. The City will establish review procedures of the requesting party for projects, including adherence to public contracting requirements, development of a financial feasibility study of the' project, and submission of annual financial statements to ensure the ability to repay the debt.