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Debt Policy <br />176 <br />177 <br />Purpose <br />178 <br />179 <br />To define the role of debt in the City's total financial strategy so as to avoid using debt in a <br />180 <br />manner that weakens the City’s overall financial condition. <br />181 <br />182 <br />To establish limits on the amount of City debt which will allow for manageable debt service <br />183 <br />costs. <br />184 <br />185 <br />To maintain the best possible Moody's and Standard and Poor's credit rating <br />186 <br />187 <br />Policy <br />188 <br />189 <br />The City will confine long-term borrowing to capital improvements or projects that cannot be <br />190 <br />financed from current revenues. The City shall not use debt for the purchase of vehicles and <br />191 <br />other rolling stock <br />192 <br />193 <br />When the City finances capital projects by issuing bonds, it will pay back the bonds within a <br />194 <br />period not to exceed the expected useful life of the project <br />195 <br />196 <br />The City will try to keep the average maturity of general obligation bonds at or below ten <br />197 <br />years <br />198 <br />199 <br />The City will strive to keep the direct debt per capita and direct debt as a percent of estimated <br />200 <br />market value at or below the median set out by the credit rating agencies <br />201 <br />202 <br />Total general obligation debt shall not exceed two percent of the market value of taxable <br />203 <br />property as required by State law <br />204 <br />205 <br />The City shall not use debt for current operations <br />206 <br />207 <br />The City will maintain good communications about its financial condition with credit rating <br />208 <br />agencies <br />209 <br />210 <br />The City will follow a policy of full disclosure on every financial report and bond prospectus <br />211 <br />212 <br />Refinancing or bond refunding will only be undertaken when there is significant economic <br />213 <br />advantage to the City, and when it does not conflict with other fiscal or credit policies <br />214 <br />215 <br />The maintenance of the best possible credit rating shall be a major factor in all financial <br />216 <br />decisions. For the purposes of issuing debt, bond rating categories shall be used as a means <br />217 <br />of assessing the City’s financial condition. <br />218 <br />219 <br />Implementation <br />220 <br />The debt management section of this approved Budget and Capital Improvement Program <br />221 <br />demonstrate compliance toward achieving the city's debt policy. <br />222 <br />223 <br />Page 6 of 12 <br /> <br />