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Attachment A <br />Debt Policy <br />Purpose <br />❖ To define the role of debt in the City's total financial strategy so as to avoid using debt <br />in a manner that weakens the City's overall financial condition. <br />❖ To establish limits on the amount of City debt which will allow for manageable debt <br />service costs. <br />❖ To maintain the best possible Moody's and Standard and Poor's credit rating <br />Policv <br />❖ The City will confine long-term borrowing to capital improvements or projects that <br />cannot be financed from current revenues. The City shall not use debt for the purchase <br />of vehicles and other rolling stock <br />❖ When the City finances capital projects by issuing bonds, it will pay back the bonds <br />within a period not to exceed the expected useful life of the project <br />❖ The City will try to keep the average maturity of general obligation bonds at or below <br />ten years <br />❖ As published in the Annual Budget document, the City will strive to keep the direct debt <br />per capita and direct debt as a percent of estimated market value at or below the median <br />set out by the credit rating agencies <br />❖ Total general obligation debt shall not exceed two percent of the market value of <br />taxable property as required by State law <br />❖ The City shall not use debt for current operations <br />❖ The City will maintain good communications about its financial condition with credit <br />rating agencies <br />❖ The City will follow a policy of full disclosure on every financial report and bond <br />prospectus <br />❖ Refinancing or bond refunding will only be undertaken when there is significant <br />economic advantage to the City, and when it does not conflict with other fiscal or credit <br />policies <br />❖ The maintenance of the best possible credit rating shall be a major factor in all financial <br />decisions. For the purposes of issuing debt, bond rating categories shall be used as a <br />means of assessing the City's financial condition. <br />Implementation <br />The debt management section of this approved Budget and Capital Improvement Program <br />demonstrate compliance toward achieving the city's debt policy. <br />