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Debt Policy <br /> Purpose <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 /> Policy <br /> ❑ The City will confine long-term borrowing to capital improvements 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 years <br /> ❑ As published in the Annual Budget 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 /> ❑ The City will follow a policy of full disclosure on every financial report and bond prospectus <br /> ❑ Refinancing or bond refunding will only be undertaken when there is significant economic <br /> advantage to the City, and when it does not conflict with other fiscal or credit 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 means of <br /> assessing the City's financial condition. <br /> Implementation <br /> The debt management section of this approved Budget and Capital Improvement Program demonstrate <br /> compliance toward achieving the city's debt policy. <br /> Page 5 of 15 <br />