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Appendix A <br />Debt Policy <br />Pur�ose <br />❖ To define the role of debt in the City's total financial strategy so as to avoid using debt in a <br />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 service <br />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 improveinents or projects that cannot be <br />financed from current revenues. The City shall not use debt for the purchase of vehicles and <br />other rolling stock <br />❖ When the City finances capital projects by issuing bonds, it will pay back the bonds within a <br />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 ten <br />years <br />d• As published in the Annual Bud�et document, the City will strive to keep the direct debt per <br />capita and direct debt as a percent of estimated market value at or below the median set out by <br />the credit rating agencies <br />❖ Total general obligation debt shall not exceed two percent of the market value of taxable <br />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 rating <br />agencies <br />•3 The City will follow a policy of full disclosure on every financial report and bond prospectus <br />❖ Refinancing or bond refunding will only be undertalcen when there is significant economic <br />advantage to the City, and when it does not conflict with other fiscal or credit policies <br />•3 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 means of <br />assessing the City's financial condition. <br />Implementation <br />The debt management section of this approved Budget and Capital Improveinent Program demonstrate <br />compliance toward achieving the city's debt policy. <br />