2007/01/17 Council Agenda Packet

3.5. When appropriate, the City will finance capital projects with self-supporting revenue bonds to most closely match those paying for a project with those who benefit. 3.6. Bonds will be sold on a competitive basis unless factors relating to the sale or current market conditions indicate that it is in the best interest of the City to conduct a negotiated sale. 3.7. Credit enhancements shall be considered with a cost/benefit analysis for each long- term bond issue. 3.8. Bond proceeds will be invested according to Arbitrage and Tax Certifications and City Investment Policy. 3.9. The City shall maintain compliance with arbitrage rebate requirements in accordance with the Internal Revenue Service (IRS) Code and City Ordinance#1358-87. 3.10. Reserve accounts shall be maintained as required by bond ordinances and where deemed advisable. Reserves shall be structured such that they do not violate IRS regulations. 3.11. The City may use the services of qualified internal staff and outside advisors to assist in the analysis, evaluation, and decision process, including bond counsel and financial advisors. 3.12. The City shall monitor its outstanding debt to determine if the marketplace will afford the opportunity to reduce debt service costs though refunding, either advance or current. In order to consider the possible advance refunding of an issue, a present value (PV) savings of three percent(3%) over the life of the respective issue, at a minimum, must be attained. 4. Payment Agreements 4.1. The City may enter into a payment agreement in connection with, or incidental to, the issuance, incurring, or carrying of specific obligations, for the purpose of managing or reducing exposure to fluctuations or levels of interest rates if the following conditions are met: • The City Council finds by resolution that the payment agreement, if fully performed by all parties, will reduce the amount or duration of its exposure to changes in interest rates, or result in a lower the cost of borrowing with respect to the related obligations. • The City obtains, on or prior to the date of execution of the payment agreement, a certification from a financial advisor that the terms and conditions of the payment agreement and any ancillary agreements, including without limitation, the interest rate or rates and any other amounts payable thereunder, are commercially reasonable in light of then existing market conditions; and the finding and termination contained in the resolution is reasonable. • Prior to selecting the other party to a payment agreement, the City shall solicit and give due consideration to proposals from at least two entities that meet the criteria set forth in RCW 39.96.040. 2O