Council receives municipal disclosure training; members unanimously appoint acting chair and adjourn

City council members attended a training session on municipal securities disclosure led by the city’s disclosure counsel, Brian Garzone, who outlined the differences between primary disclosures (preliminary and final official statements) and continuing, secondary disclosures such as annual reports and material event notices.

Garzone told the council the official statement “is true and correct as of its date, and does not have any untrue or misleading information included in there,” and explained that the document must describe the security for bonds, repayment sources and the city’s financial condition so investors can decide whether to buy the bonds.

The training covered regulatory context, including Rule 15c2-12 (continuing disclosure agreements) and the anti-fraud principles that apply to municipal issuers, and emphasized materiality — whether a reasonable investor would consider disclosed information important to an investment decision. Garzone said most enforcement actions in the municipal market are negligence-based and noted that following written policies and procedures can be an important defense.

Garzone cited the Orange County case as a commonly referenced example and told officials they must not authorize disclosures they know to be false and should raise concerns they know about so staff and the disclosure working group can address them. He described steps the council can take to establish “reasonable reliance” on staff, including maintaining a disclosure working group and naming a disclosure coordinator to manage filings.

Tim, who spoke for staff, said the city takes continuing disclosure obligations seriously and identified Cindy Augustine as the continuing disclosure coordinator who helps ensure timely filings, and noted the city uses outside vendors for filing support. During a brief exchange, Councilman Wieger asked whether current audits affect borrowing costs; Garzone said up-to-date audits and timely continuing disclosures can help lower the city’s interest rates by making investors more comfortable.

Votes at a glance - Motion to appoint an acting chair for the meeting: moved and seconded; roll-call vote recorded Hooton, Gale, Hampton, Wieger and Williams as voting yes; motion passed unanimously. - Motion to adjourn: moved and seconded; roll-call vote recorded unanimous yes votes and the council adjourned.

The presentation concluded with an invitation for further questions and council members thanked Garzone and his firm for the briefing. The meeting record shows the council will continue to rely on its disclosure policy and working group process for future bond offerings.