FIN 2025-06-23 Item 1A - Resolutions - City Investment and Debt Policies

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Section I. Introduction Purpose and Overview The objective of this policy is to provide general guidance for the issuance and management of all City of Tukwila (the City) debt. Further, this policy establishes criteria to protect the City's financial integrity while providing a mechanism to fund the City's capital needs prudently and cost effectively. Adherence to this policy is essential to ensure that the City Council (Council) maintains a debt position which allows the Council to protect the City, its functionality, and the credit quality of its obligations. The City's Finance Department is charged with ensuring compliance with all debt policy requirements. Capital Planning The City shall integrate its debt issuance with its Capital Improvement Program (referred to herein as CIP or Capital Facilities Plan) spending to ensure that planned financing conforms to policy targets regarding the level and composition of outstanding debt. This planning considers the long-term horizon, paying particular attention to financing priorities, capital outlays and competing projects. Long-term borrowing shall be confined to the acquisition and/or construction of capital improvements and shall not be used to fund operating or maintenance costs. The issuance of debt to fund operating deficits is not permitted except in emergencies as adopted by formal action by the City Council. For all capital projects under consideration, the City shall budget and set aside sufficient revenue from operations to fund ongoing maintenance needs and to provide reserves for periodic replacement and renewal. The source of funds for the project should reflect the intended use of bond financing. Section II. Governing Principles In the issuance and management of debt, the City shall comply with the State of Washington (State) constitution and with all other legal requirements imposed by federal, State, and local rules and regulations, as applicable. The following section highlights the legal framework for debt issuance. Governing Law State Statutes. The City issues debt in accordance with the Revised Code of Washington (RCW), in particular chapters 39.36, 39.46, and 39.53, the State constitution along with all other City, State, and federal laws, rules, and regulations. Federal Rules and Regulations. The City shall issue and manage debt in accordance with the limitations and constraints imposed by federal rules and regulations, including but not limited to, Internal Revenue Code of 1986, as amended, and Treasury Department Regulations thereunder (Tax Law), and the Securities Acts of 1933 and 1934 (Securities Law). Local Rules and Regulations. The City shall issue and sell debt in accordance with the limitations and constraints imposed by the Tukwila Municipal Code (TMC), including but not limited to Title 3 (Revenue and Finance) and City ordinances, resolutions, policies, procedures, and bond covenants. City of Tukwila Debt Policy Page 3 of 10 27