Page 377 - CityofSouthlakeFY26AdoptedBudget

- The City will obtain a rating from at least two nationally-recognized bond-rating agencies on all issues
being sold on the public market. Required information will be presented to the rating agencies at least
annually in order to maintain ratings on outstanding debt.

- The City shall comply with the Internal Revenue Code Section 148-Arbitrage Regulations for all tax-
exempt debt issued. An annual estimate of arbitrage liabilities shall be obtained by the City and recorded
on the financial statements.

- A good faith deposit of 2.0% of the par amount of the bond sale shall be presented by the underwriter in Appendix
the form of a check or surety acceptable to the City and Bond Counsel prior to the approval of the bonds
by the Mayor and City Council.

- The City shall use a competitive bidding process in the sale of the debt unless the use of a negotiated
process is warranted due to market timing requirements (refunding), or a unique pledge or debt structure.
The City will award competitively-issued debt on a true interest cost (TIC) basis.

- The City welcomes ideas and proposals from investment bankers and will seek to give first consideration
to those firms that submit unique and innovative ideas that benefit the City. Unsolicited proposals should
be submitted to the City’s Finance Department.

- The selection of an underwriter or group of underwriters for a negotiated sale shall be based on the
following factors:

- Participation in the City’s competitive sales;

- Submission of unique or creative proposals;

- Qualifications of firm; and,

- Size and geographic distribution of their sales staff.

- All professional service providers selected in connection with the City’s debt issuance and management
program shall be chosen through a competitive process such as request for proposals (RFP’s) on an as
needed basis.

- An advance or current refunding of outstanding debt shall only be considered when present value savings
of at least 4.25% of the principal amount of the refunded bonds are produced, unless a debt restructuring
or bond covenant revisions are necessary. Savings from refunding will be distributed evenly over the life
of the refunded bonds.

- An analysis of the risks and potential rewards of a derivative product for debt management must be
prepared before the structure is selected. The City’s Bond Counsel must opine that the City is authorized
to enter into the necessary agreements under all existing statutes.

- The use of reimbursement resolutions shall be encouraged as a cash management tool for debt funded
projects. Reimbursement resolutions may be used for any project that has been approved in the City’s
Capital Budget. Reimbursement resolutions may be used for other projects if the projects are revenue
supported or funded within the departments’ operating budget.

- The City shall obtain a clear opinion from qualified legal counsel that the City is not liable for the payment
of principal and/or interest in the event of default by a conduit borrower. If no such opinion can be
obtained, the conduit borrower will be required to purchase insurance or a letter of credit in the City’s
name in the event of default. Examples of a conduit issuer are special authorities, tax increment finance

FY 2026 City of Southlake | Budget Book 377