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RESOLUTION NO. R-1415-23: A JOINT RESOLUTION OF THE COUNCIL OF THE CITY OF NORMAN, THE NORMAN UTILITIES AUTHORITY, THE NORMAN MUNICIPAL AUTHORITY, THE NORMAN TAX INCREMENT FINANCE AUTHORITY, AND THE NORMAN ECONOMIC DEVELOPMENT AUTHORITY, ADOPTING CONTINUING DISCLOSURE POLICIES AND PROCEDURES.
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BACKGROUND: The City of Norman and its beneficial trusts (Norman Utilities Authority, Norman Municipal Authority, Norman Tax Increment Finance Authority, and potentially the Norman Economic Development Authority) have been active participants in the municipal bond markets of the United States. A requirement for participation in bond issuances is providing up to date information on the financial status of the bond "Issuer" (the City or the Trust) to potential investors in the City's bonds. At the time of offering bonds for sale to the public bond market, the Issuer must enter into a "Continuing Disclosure Undertaking", which is one of the documents that the Council or the Trustees authorize. In the Continuing Disclosure Undertaking, the Issuer contracts or "covenants" to provide public information on a continual basis. The U.S. Securities Exchange Commission's (SEC) public sector affiliate, the Municipal Securities Rulemaking Board (MSRB), is responsible for receiving this ongoing information from all issuers of public debt, and makes it available to investors and regulators through their on-line Electronic Municipal Market Access system (NOTE: while the Norman Regional Hospital Authority has also been an active participant in the municipal bond markets, the Hospital Authority is a separate Issuer, or "Obligated Person", and the City of Norman has not contracted to provide continuing disclosure information for Hospital Authority debt). In general, information must be provided and updated in the following areas to comply with the Continuing Disclosure Undertaking:
Annual financial and operating information on the issuer, updated annually;
Audited financial statements, submitted annually;
Notice of the occurrence of any significant change in the financial status, or "Listed Event", including notice of any failure to report financial status changes.
DISCUSSION: The City of Norman and its related Trusts have complied with all of the requirements of the Continuing Disclosure Undertakings agreed to at the time of issuing its bonds to the bond market. There have been several documented cases of non-compliance by other issuers throughout the nation, however, which has caused the MSRB to increase its monitoring and enforcement efforts related to continuing financial information disclosure.
In response to these concerns, and in compliance with directions given to the private sector bond markets governed by the SEC in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the MSRB implemented its Municipalities Continuing Disclosure Cooperation Initiative (MCDC) in early 2014.
Under the MCDC, the MSRB is basically giving issuers a "grace period" to self-report any violations of the requirements of their Continuing Disclosure Undertaking contracts, before stringent enforcement actions will be taken. Through on-going consultation with our bond counsel and financial advisory teams and through direct advice given in discussions with MSRB representatives, it has been determined that the City of Norman and our Trusts have no events or violations to report. We are advised, however, that the policies and procedures that we have followed in submitting continuing disclosure information should be formalized by resolution of the governing bodies of the Issuer.
The attached Continuing Disclosure Policies and Procedures for the City of Norman and its Public Trusts and Authorities have been prepared in response to the MCDC Initiative. The Policies and Procedures document all of the Continuing Disclosure requirements in detail, including the "Listed Events" which would require reporting under SEC regulations. We will continue to make every effort to comply with all bond market regulations, as we continue to be active participants in the public bond markets. We will also seek to develop our own "home page" on the EMMA system, to make it easier for market participants to obtain information on the City of Norman and our beneficial Trust debt issues and financial status.
RECOMMENDATION: It is recommended that the Resolution be adopted and filed in the Central Files of the City of Norman and the Finance Department.