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VI. DEBT POLICIES <br /> A. PURPOSE <br /> The debt policies ensure that the city's debt 1) does not weaken the city's <br /> financial structure; and 2) provide limits on debt to avoid problems in <br /> servicing debt. This policy is critical for maintaining the best possible <br /> credit rating for the city. <br /> B. POLICY <br /> The city will not use long -term debt for current operations. <br /> The city will confine long -term borrowing to capital items or capital <br /> projects. <br /> The city will pay back bonds within a period not to exceed the expected <br /> life of the project. <br /> The city will not exceed 2 percent of the market value of taxable property <br /> for general obligation debt per state statutes. <br /> The city will consider the maintenance of the best possible credit rating <br /> in making all decisions on debt. <br /> The city will follow a policy of full disclosure on financial reports and <br /> bond prospectus. <br /> The City will refinance or call any debt issue when interest rates are <br /> beneficial for future debt savings. <br /> C. IMPLEMENTATION <br /> The city maintained its A -1 rating from Moodys on its last two bond issues. <br /> The following graph illustrates the ratio of net bond debt to market value <br /> over the last ten years. <br /> Source: City Financial Records <br />