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3.The City will pay back debt within a period not to exceed the expected useful life of the street <br />project, with at least 50% of the principal retired within two-thirds of the term of the bond issue. <br />4. Total general obligation debt shall not exceed 2% of the total market valuation of taxable property <br />in the City. <br />5. Direct net debt (gross debt less available debt service funds) shall not exceed 3% of the total <br />market valuation of taxable property in the City. <br />6. The City will maintain good communications with bond rating agencies regarding its financial <br />condition. The City will follow a policy of full disclosure in every financial report and bond <br />prospectus. <br />7. The City will use refunding mechanisms to reduce interest cost when economically feasible. <br />8. The City will manage the Debt Levy associated with its Road Improvement Program to reduce the <br />overall future high point of levy requirements during the final years of the program. The City will <br />apply future unencumbered utility charges; Municipal State Aid fund, excess bond balances and <br />one-time revenue sources to accomplish this reduction in future levy requirements (Debt Levy <br />Reduction plan). See Exhibit A for the current projections of the Debt Levy Reduction plans <br />impact. <br />VIII. ACCOUNTING, AUDITING, AND FINANCIAL REPORTING <br />The key to effective financial management is to provide accurate, current, and meaningful information <br />about the City’s operations to guide decision making that enhance and protect the City’s financial <br />position. <br />Policy Statement: <br />1. The City’s accounting system will maintain records on a basis consistent with generally accepted <br />accounting standards and principles for local government accounting as set forth by the <br />Government Accounting Standards Board (GASB) and in conformance with the State Auditor’s <br />requirements per State Statutes. <br />2. The City will establish and maintain a high standard of accounting practices. <br />3. The City will follow a policy of full disclosure written in clear and understandable language in all <br />reports on its financial condition. <br />4. A primary goal of the Finance Department is to provide timely monthly, quarterly and annual <br />financial reports to users. <br />5. An independent public accounting firm will perform an annual audit and issue an opinion on the <br />City’s financial statements. <br />6. The City Council will review the audit report, approve its findings and meet with the Auditor to <br />discuss any questions they might have in regard to the audit. <br />74