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

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• Maturity —The City shall issue debt with an average life less than or equal to the average life of the assets being financed. Unless otherwise stated in law, the final maturity of the debt shall be no longer than 40 years (RCW 39.46.110). • Debt Service Structure — Unless otherwise justified, debt service should be structured on a level basis (i.e., level annual payments). Refunding bonds should be structured to produce equal savings by fiscal year. Unless otherwise justified, debt shall not have capitalized interest. If appropriate, debt service reserve funds may be used for revenue bonds. • Price Structure — The City's long-term debt may include par, discount, and premium bonds. Call Provisions — For each transaction, the City shall evaluate the costs and benefits of call provisions. In general, the City shall opt for a call date no later than 10 % years from the date of the bonds. • Tax -exemption — Unless otherwise justified and deemed necessary, the City shall issue its debt on a tax-exempt basis. • Reimbursement declaration — Must be made prior to bond issuance if the City intends to be reimbursed out of tax exempt bond proceeds for capital costs paid prior to the closing date. • The City will not use derivatives in connection with any new financings. • The City will not become obligated for any new City debt or otherwise be involved in any new financing that would include a variable rate of interest or variable debt service (excluding of any additional rent payable under a financing lease or other obligation for ongoing transaction fees). Section VI. Compliance Policies The City will comply with all federal, State, contractual restrictions and City policies regarding the investment of bond proceeds and associated funds subject to debt -related investment limitations. Such requirements may include restrictions on the type of securities allowed the yield on such securities, and the length of time that such proceeds and funds may be invested. For refunding escrows, the City may invest funds in State and Local Government Series (SLGS) securities issued by the U.S. Treasury, or, after satisfying requirements of Tax Law and if determined advisable after consultation with the City's municipal advisor and bond counsel, in open -market securities as permitted under State law and relevant bond covenants. The City will maintain a system for tracking bond proceeds, including how proceeds are invested, when they are spent, and for what purpose. Bond proceeds shall, unless otherwise permitted, be tracked separately from other City funds and on an issue by issue basis. The City shall maintain records related to the bonds for the life of the bonds (plus any refunding bonds) plus three years. The City will, unless otherwise permitted, spend at least 85% of tax-exempt bond proceeds within three years from the date of issuance pursuant to Tax Law, and take such steps as necessary to avoid or manage arbitrage. The City will maintain a system of recordkeeping and reporting to meet the arbitrage rebate compliance requirement of the IRS (Internal Revenue Service, IRC 148) regulation. For each bond issue, the recordkeeping will include tracking the yield and investment earnings on bond proceeds, calculating rebate payments, and remitting any rebate earnings to the federal government in a timely manner to preserve the tax-exempt status of the outstanding debt obligation. Any bond proceeds invested will comply with the City's investment policy and strategies, unless further restricted by bond covenant. The City of Tukwila Debt Policy Page 9 of 10 33