To: Board of Supervisors
From: Monica Nino, County Administrator
Report Title: ADOPT Resolution updating and reaffirming the County Debt Management Policy, as recommended by the County Administrator.
Recommendation: Recommendation of the County Administrator
RECOMMENDATIONS:
ADOPT Resolution updating and reaffirming the County Debt Management Policy.
FISCAL IMPACT:
No fiscal impact.
BACKGROUND:
On December 7, 2006, the Finance Committee reviewed and discussed a report regarding establishing a County Debt Management Policy. The Committee directed staff to report to the full Board on December 19, 2006 the recommendation to adopt a formal County Debt Management Policy. A formal policy was adopted on December 19, 2006 (Resolution No. 2006/773).
Since that time, the Board of Supervisors has worked exceptionally hard to address the County’s financial issues and has set very ambitious and necessary goals for lowering cost growth, balancing the budget, and increasing reserves. These solutions have been aimed at addressing both short- and long-term needs and improving the County’s future ability to maintain public services. The four financial policy areas that have contributed significantly to the Board's goals are the following:
• Budget Policy (established November 2006)
• General Fund Reserve Policy (established December 2005)
• Facilities Maintenance (included in Budget Policy)
• Debt Management Policy (established December 2006)
The Debt Management Policy establishes debt affordability standards that help the County to evaluate when, why, and how much debt should be issued. In addition, the Debt Management Policy:
• Establishes parameters for issuing and managing debt;
• Provides guidance to decision makers so as not to exceed the debt affordability standards;
• Directs staff on objectives to be achieved both pre- and post-issuance;
• Promotes objectivity in decision-making and limits the role of political influence;
• Describes responsibilities for Continuing Disclosure and Post-Issuance Tax compliance policies and procedures; and
• Facilitates the process by considering and making important policy decisions in advance of an actual financing.
Periodically, financial policies should be revised to keep current with best practices or changes in law. The Debt Affordability Advisory Committee (DAAC) reviews the existing Debt Management Policy on an annual basis and makes recommendations for revisions to the Board of Supervisors for consideration. The DAAC met on July 8, 2026 and reviewed proposed amendments to the Debt Management Policy and is recommending updates. Specifically, there are four updates to the policy for the Board's consideration at today's meeting:
• Section IV(F). “Other Obligations Classified as Debt/Other Post-Employment Benefits (OPEB).” Updates the section to current terminology and generally accepted accounting principles (GAAP), as established by the Governmental Accounting Standards Board (GASB). This update incorporates the current County accounting practices related to recording lease obligations in compliance with GASB 87 and subscription-based information technology arrangements (SBITAs) in compliance with GASB 96.
F. Other Obligations Classified as Debt/Other Post-Employment Benefits (OPEB)/Compensated Absences. OPEBs and compensated absences are earned by County employees based on time in service. The County records these benefits as earned in accordance with generally accepted accounting principles as established by the Governmental Accounting Standards Board (GASB). Other obligations include leases, recorded in compliance with GASB 87 and Subscription-based information technology arrangements (SBITAs), recorded in compliance with GASB 96. The liability for the obligation is recorded on the Fund level financial statements. The expense is recorded during the conversion to the Government Wide financial statements in accordance with GASB standards. For Enterprise funds the expense and liability are accrued in the respective funds. The County’s net OPEB obligation is posted to the County’s government wide Statement of Net Position.
• Appendix 3 (Exhibit A). “County and Authority Outstanding Debt.” Updates the exhibit to reflect current and active debt obligations by removing Lease Revenue Bonds 2017 Series B, Lease Revenue Bonds 2015 Series A and B, and Tax Allocation Refunding Bonds Series 2017B. These debt service series have been redeemed and paid in full.
• Appendix 3 (Exhibit B). “Required Information for Annual Reports of County and Authority.” Updates the exhibit to reflect current and active debt reporting obligations by removing Lease Revenue Bonds 2017 Series B, Lease Revenue Bonds 2015 Series A and B, and Tax Allocation Refunding Bonds Series 2017B. These debt service series have been redeemed and paid in full.
• Appendix 5 (III). “County Compensation.” Updates the section to adjust issuance fees to adequately cover county costs and align with similar agencies. These fees relate to Multifamily Mortgage Revenue Bonds managed by the Department of Conservation and Development. This program consists of three fees: application fee, issuance fees, and annual fees. There is no change to the application fee or annual fee rate. The issuance fee rate changed from 0.125% to 0.25% and increased the maximum fee from $75,000 to $90,000. The annual fee maximum increased from $25,000 to $50,000.
III. COUNTY COMPENSATION
The County’s fees are comprised of (1) a non-refundable application fee due prior to drafting a Reimbursement Resolution, (2) an issuance fee due upon bond closing, and (3) an annual fee due in advance to cover costs of monitoring compliance with State and federal law requirements as contained in a Regulatory Agreement for each bond issue. The annual fees may be negotiated, however the standard fee is 1/8 of 1 percent (or 0.125 percent) of the principal amount of bonds outstanding. Annual fees are charged for the full term of the Regulatory Agreement, generally 55 years. At the County’s discretion, annual fees above a $5,000 minimum may be subordinated to payment of debt service. The County fees are summarized in the table below:
Issuer Fee Schedule
|
Application (1) |
Issuance Fee |
Annual Fee (2) |
|
$2,500 |
Rate (3) |
0.25% |
Rate (3) |
0.125% |
|
|
Minimum |
$5,000 |
Minimum |
$5,000 |
|
|
Maximum |
$90,000 |
Maximum |
$50,000 |
|
|
(1) Payable upon request of a Reimbursement Resolution. Amount is applied to Issuance Fee at closing. DCD may waive this requirement in its sole discretion. |
|
|
(2) Amounts above the minimum may be subordinated to bond debt service, at the County’s option. |
|
|
(3) Percentage applied to the outstanding bond issuance amount. |
CONSEQUENCE OF NEGATIVE ACTION:
The policy will not be formally updated and reaffirmed by the Board of Supervisors and the current policy adopted on September 12, 2023 (Resolution No. 23-543) will remain in effect.
THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
and for Special Districts, Agencies and Authorities Governed by the Board
body
IN THE MATTER OF REAFFIRMING AND AUTHORIZING UPDATES TO THE COUNTY DEBT MANAGEMENT POLICY
WHEREAS, the Debt Affordability Advisory Committee (DAAC) met on July 8, 2026 to consider updates to the County’s Debt Management Policy, currently adopted as Resolution No. 23-543, for consideration by the Board of Supervisors; and
WHEREAS, the Contra Costa County Board of Supervisors, acting in its capacity as the Governing Board of the County of Contra Costa and for Special Districts, Agencies and Authorities governed by the Board wishes to reaffirm and authorize updates to its Debt Management Policy.
NOW, THEREFORE, BE IT RESOLVED that the Contra Costa County Board of Supervisors, acting in its capacity as the Governing Board of the County of Contra Costa and for Special Districts, Agencies and Authorities governed by the Board, takes the following actions:
1. Reaffirms its commitment to prudent debt management practices; and
2. Adopts this Resolution, including the County Debt Management Policy as attached; and
3. This resolution supersedes and replaces Resolution No. 23-543 in full.
end