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Board reviews debt policy updates and SRF changes, including discount-rate adjustment to attract borrowers
Summary
The Board reviewed revisions to the State Debt Management Policy, including increasing the minimum year-end balance in the Bond Interest and Redemption Fund to 100% of next fiscal year debt service and proposed State Revolving Fund adjustments including a change to the primary discount rate from 54% to 50% to improve borrower participation.
Deputy Treasurer Eaton presented proposed revisions to the State of Nevada Board of Finance Debt Management Policy to align with statutory changes from the 81st Legislature and to address practical issues in the State Revolving Fund (SRF) programs.
Eaton said the recommended policy change would increase the minimum required ending year balance in the Bond Interest and Redemption Fund from one-half of the next fiscal year’s debt service to 100% of next fiscal year debt service. Jason Cooper from the Division of Environmental Protection described SRF program concerns: federal program changes and larger grant balances had reduced traditional borrowing through the SRF, and the Division recommended adjustments to program terms to attract larger municipal borrowers. Cooper said one specific proposal is to change the primary discount rate from 54% to 50% for borrowers that meet affordability and equivalency criteria to better align rates with public-sector alternatives.
Board members discussed outreach and notification methods for the SRF changes; staff said the proposed updates were posted through public notice and that they had notified large borrowers and listserv contacts.
