(a) This Policy shall govern the authorization of Certificates of Participation ("COPs") that may be caused to be executed and delivered by the City in connection with the financing of capital projects payable and secured by the City's General Fund. This Policy also governs the issuance of commercial paper from time to time by the Controller's Office of Public Finance. This Policy supplements the Controller's Office of Public Finance's Debt Policy of the City and County of San Francisco ("Debt Policy"), which document is on file for informational purposes with the Clerk of the Board.
(b) Certificates of Participation.
(1) The City may cause the execution and delivery of COPs for, without limitation, (i) the acquisition or improvement of existing facilities and/or construction of new facilities that result in immediate or future savings in payments currently made or to be made by the City's General Fund, (ii) to leverage grant and other monies to reduce operating costs of the City, (iii) for the construction, improvement or acquisition of facilities to address legal mandates or (iv) the construction, improvement or acquisition of facilities for critical public health and safety needs. Notwithstanding anything contained in this ordinance, COPs may not be authorized to finance annual operating costs of the City.
(2) The Controller and Director of Public Finance shall identify specific revenue sources within the General Fund (e.g., transient occupancy taxes, tobacco settlement receipts, etc.) as internal repayment sources for COPs, to ensure that prudent repayment schedules are placed on the General Fund.
(3) The Board of Supervisors may authorize the issuance of COPs and other lease financing debt as funding sources for capital projects provided the annual debt service cost of such outstanding indebtedness does not exceed 3.25 percent of discretionary revenue, as determined by the Controller and the Director of Public Finance. For the purposes of this subsection, "discretionary revenue" shall be determined by the Controller in a manner consistent with the calculation of aggregate City and County discretionary revenue under Charter Sections 8A.105 and 16.109, and this calculation shall be included in the staff report requesting approval of any COPs financing.
(4) For purposes of subsection (3), the 3.25 percent of discretionary revenue limitation excludes lease-financed projects that result in decreases in costs supported by discretionary General Fund revenues, calculated on a net present value basis by the Controller and Director of Public Finance, and any portion of lease-financing obligations payable from (i) non-General Fund revenue sources, (ii) grants, or (iii) state and/or federal reimbursement.
(c) Commercial Paper Program.
(1) The Director of Public Finance may issue tax-exempt and taxable commercial paper notes to provide interim funds to finance the acquisition, construction, and rehabilitation of capital improvements and capital equipment. Commercial paper notes shall not be issued for any project unless that project and financing plan therefor shall have received prior approval from the Board of Supervisors and the Mayor.
(2) The Director of Public Finance shall provide a written report to the Board of Supervisors twelve months following the initial issuance of commercial paper notes and annually thereafter until no commercial paper note remain outstanding describing (i) the notes issued since commencement of the Commercial Paper Program and since the date of the last report; (ii) summarizing the current status of projects financed with commercial paper; and (iii) identifying the long term plan of finance with respect to any general obligation bonds, COPs or other long term obligation to refund such commercial paper notes.
(d) Exceptions from the Policy.
(1) The Board of Supervisors, by a resolution adopted by a two-thirds' vote, may temporarily suspend the provisions of this Section
10.62 for the current or upcoming budget year, and may suspend its provisions for individual transactions. The Board of Supervisors may suspend these provisions following a natural disaster that has caused the Mayor or the Governor to declare an emergency, or for any other purpose.
(2) The failure of the City to comply with any provision of this Policy shall not affect the authorization or the validity or enforceability of any COPs or other long term obligation that are otherwise issued in accordance with law.
(3) The Policy shall only apply to indebtedness secured by the City's General Fund and does not apply to other departments or enterprises of the City, including the Airport Commission, the Mayor's Office of Housing, the Municipal Transportation Authority, the Port Commission, or the Public Utilities Commission.
(Added by Ord. , File No. 111000, App. 11/15/2011, Eff. 12/15/2011, Oper. 7/1/2012)
