TITLE
Recommendation to receive and approve staff recommendation to decline to voluntarily self-report any of the City’s bond issuing transactions to the Securities and Exchange Commission, in response to the Municipalities Continuing Disclosure Cooperation Initiative. (Citywide)
DISCUSSION
When the City issues bonds, it agrees to report significant events, file audited financial information and disclose other information that could be important to bondholders on an ongoing basis (Continuing Disclosure). A bond issuer (City) typically states in the required bond offering document that it has complied with its Continuing Disclosure obligations in all material respects for the last five years. City staff works closely with its financial and legal advisors to help ensure that this disclosure is accurate in all material respects.
On March 10, 2014, the Securities and Exchange Commission (SEC) issued its Municipal Continuing Disclosure Cooperation (MCDC) Initiative that offered favorable settlement terms to bond issuers and bond underwriters if they voluntarily self-report material misstatements made in bond offering documents concerning an issuer’s prior compliance with its Continuing Disclosure requirements.
Under the MCDC Initiative, the SEC is offering leniency to any issuer that self-identifies that it failed to disclose any material non-compliance with its Continuing Disclosure requirements. Although staff has worked diligently over the years to prevent a material misstatement, the rules of interpretations change and definitions of “material” may become unclear; no operation is ever perfect and some mistakes may occur.
In addition to its annual due diligence, City staff performed additional reviews of the City’s Continuing Disclosure agreements, covering a ten-year period, to determine if the City made any material misstatements concerning compliance with the City’s Continuing Disclosure requirements. No material misstatements were found. The City ...
Click here for full text