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Debt Policy <br />Revised October 14, 2025 <br />Purpose <br /> To define the role of debt in the City's total financial strategy so as to avoid using debt in <br />a manner that weakens the CityÓs overall financial condition. <br /> To establish limits on the amount of City debt which will allow for manageable debt <br />service costs. <br /> <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 or <br />equipment that cannot be financed from current revenues. The City shall not use debt for <br />the purchase of vehicles and other rolling stock, except as authorized by the Council. <br /> <br /> When the City finances capital projects by issuesing bonds, it will pay back the bonds <br />within a period not to exceed the expected useful life of the project <br /> <br /> The City will issue bonds for the shortest period possible while maintaining the annual <br />payments at a level that is affordable to the funding source.try to keep the average <br />maturity of general obligation bonds at or below ten years <br /> <br /> The City will strive to keep the direct debt per capita and direct debt as a percent of <br />estimated market value at or below the median set out by the credit rating agencies <br /> <br /> Net general obligation debt will not exceed the statutory limit of 3% of the estimated <br />market value of taxable property in the City as required by Minnesota Statute, Section <br />475.53 and at levels consistent with the CityÓs creditworthiness objectives.Total general <br />obligation debt shall not exceed two percent of the market value of taxable property as <br />required by State law <br /> <br /> The City shall not use long-term debt for current operations <br /> <br /> The City will maintain good communications about its financial condition with credit <br />rating agencies. The City will follow a policy of full disclosure on every financial report <br />and bond prospectus <br /> <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 /> <br /> The maintenance of the best possible credit rating shall be a major factor in all financial <br />decisions <br />1 <br />Qbhf!8!pg!29: <br /> <br />