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City of Roseville — 2006 Budget City ur Pd- �" " � � � Debt Policy M I �Sri Purpose ❑ To define the role of debt in the City's total financial strategy so as to avoid using debt in a way that weakens other parts of the financial structure of the City ❑ To provide for limits on debt to avoid potential pitfalls in servicing the debt ❑ To maintain the best possible Moody's and Standard and Poor's credit rating Polic ❑ The City will confine long -term borrowing to capital improvements or projects that cannot be financed from current revenues. The City shall not use debt for the purchase of vehicles and other rolling stock ❑ When the City finances capital projects by issuing bonds, it will pay back the bonds within a period not to exceed the expected useful life of the project ❑ The City will try to keep the average maturity of general obligation bonds at or below ten years ❑ The City will strive to keep the direct debt per capita and direct debt as a percent of estimated market value at or below the median set out by the credit rating agencies ❑ Total general obligation debt shall not exceed two percent of the market value of taxable property as called for by State law ❑ The City shall not use long -term debt for current operations ❑ The City will maintain good communications about its financial condition with credit rating agencies ❑ The City will follow a policy of full disclosure on every financial report and bond prospectus ❑ Refinancing or bond refunding will only be undertaken when there is significant economic advantage to the City, and when it does not conflict with other fiscal or credit policies ❑ The maintenance of the best possible credit rating shall be a major factor in all financial decisions Implementation The debt management section of this approved Budget and Capital Improvement Program demonstrate compliance toward achieving the city's debt policy. 116