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DEBT POLICIES <br />PURPOSE <br />1. To define the role of debt in the City's total financial <br />strategy to avoid using debt in a way that weakens other <br />parts of the financial structure of the City. <br />2. To provide for limits on debt to avoid problems in servicing <br />the debt. <br />3. To maintain the best possible Moodys and Standard and Poors <br />credit rating. <br />POLICY <br />. The City will confine long-term borrowing to cap.ital improve- <br />ments or projects that cannot be financed from current <br />revenues. The City shall not use debt for the purchase of <br />vehicles and other rolling stock. <br />. When the City finances capital projects by issuing bonds, it <br />' will pay back the bonds within a period not to exceed the <br />expected useful life of the project. <br />. The City will try to keep the average maturity of general <br />obligation bonds at or below ten years. ' <br />. The City will strive to keep the direct debt per capita and ' <br />direct debt as a percent of estimated market value at or ' <br />below the median set out by the credit rating agencies. <br />Total general obligation debt shall not exceed 2 percent of <br />the market value of taxable property as called for by State <br />law. <br />. The City shall not use long-term debt for current operations. <br />The City will maintain good communications about its finan- <br />cial condition with credit rating agencies. The City will <br />follow a policy of full disclosure on every financial report <br />and bond prospectus. <br />Refinancing or bond refunding will only be undertaken when <br />there is significant economic advantage to the City, and when <br />it does not conflict with other fiscal or credit policies. <br />The maintenance of the best possible credit rating shall be a <br />major factor in all financial decisions. <br />E-5 <br />