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City of San Leandro <br />Meeting Date: June 17, 2013 <br />Resolution - Council <br />Agenda Section:File Number:13-315 CONSENT CALENDAR <br />Agenda Number:8.C. <br />TO:City Council <br />FROM:Chris Zapata <br />City Manager <br />BY:City Council <br />FINANCE REVIEW:Not Applicable <br />TITLE:ADOPT: Resolution Supporting the Preservation of Tax -Exempt Financing <br />(maintains the federal tax exemption on municipal bond interest) <br />Whereas, tax-exempt municipal bonds are the primary means by which state and local <br />governments finance three quarters of the critical infrastructure of our nation, including roads, <br />bridges, hospitals, schools, and utility systems; and <br />WHEREAS, through the tax exemption, the federal government continues to provide <br />critical support for the federal, state and local partnership that develops and maintains <br />essential infrastructure, which it cannot practically replicate by other means; and <br />WHEREAS, the municipal tax exemption has enabled state and local governments to <br />finance more than $1.65 trillion in infrastructure investment over the last decade; and <br />Whereas, this tax exemption is part of a more than century-long system of reciprocal <br />immunity under which owners of federal bonds are, in turn, not required to pay state and local <br />income tax on the interest they receive from federal bonds; and <br />Whereas, municipalities benefit from this tax exemption through substantial savings on <br />the interest cost of borrowed money; and <br />Whereas, tax exempt bonds benefit state and local governments who need the support <br />of investors to finance critical infrastructure, taxpayers across the country who depend on this <br />infrastructure for reliable transportation systems, schools, public health facilities, energy, clean <br />water and affordable housing , the federal government, who gets quite a bargain on their <br />partnership with state and local government to provide the nation's infrastructure through the <br />exemption; and investors who buy bonds for many reasons, including the safe nature of these <br />financial products; and <br />WHEREAS, municipal bonds are safe investments, akin to U.S. Treasuries, with state <br />and local governments having nearly a zero default rate; and <br />Page 1 City of San Leandro Printed on 6/11/2013