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73 <br /> V. 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)provides limits on debt to avoid problems in <br /> servicing debt. This policy is critical for maintaining the best possible credit <br /> 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 life <br /> 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. The city will attempt to.only <br /> spend 80 percent of the 2 percent in order to provide for emergency needs. <br /> The city will consider the maintenance of the best possible credit rating in <br /> making all decisions on debt. The city will seek credit enhancements, such <br /> as Letter of Credit or insurance,when necessary for marketing purposes, <br /> availability and cost-effectiveness. <br /> The city will follow a policy of full disclosure on financial reports and bond <br /> prospectus. <br /> The city will refinance or call any debt issue when interest rates are <br /> beneficial for future debt savings. <br /> The city will monitor all forms of debt'on an annual basis concurrent with <br /> the city's Budget and Capital Improvement Program hearing process and <br /> report concerns and remedies, if needed,to the city council. <br /> For Enterprise operations,the city will attempt to.issue debt that is self- <br /> supporting through user fees and charges, assessments, or special taxes, and <br /> not.backed or funded by General Fund revenues. <br /> • Advance refunding of outstanding bonds will be considered when the <br /> present value savings, at a minimum, are in excess of cost of issuing <br /> refunding bonds: <br />