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improvement” is defined as any major nonrecurring expenditure for physical facilities of government. <br />Typical expenditures are the construction of roads, stormwater improvements utilities, parks, vehicles and <br />capital equipment replacement. Capital improvements are directly linked to goals and policies, land use, <br />community needs and sections of the Comprehensive Plan. <br />Infrastructure Improvements Process: <br />Devise proposed funding sources for proposed Infrastructure Improvements projects (typically <br />streets, utilities and stormwater). Recommended funding sources will be clearly stated for each <br />project. <br />Analyze debt service related to new projects. Each project, when applicable, will include its separate <br />impact on the tax levy and/or utility charges as well as its total dollar cost. <br />Project and analyze total debt service related to the total debt of the City. <br />A debt study will be provided summarizing the impact of the project, review of the revenues and <br />proposed debt. <br />The City Council will evaluate all proposed Capital Improvements and decide on the following: <br />Project Prioritization <br />Funding Source <br />Acceptable Financial Impact on Tax Levy, Total Debt, or Utility Rate Levels. <br />VII. DEBT MANAGEMENT <br />The use of borrowing and debt is a revenue source available to the City. Debt as a mechanism, allows capital <br />improvements to advance when needed. Financing can reduce long-term costs due to inflation, prevent <br />lost opportunities, and equalize the costs of improvements to present and future constituencies. <br />Debt management is an integral part of the financial management of the City. Adequate resources must be <br />provided for the repayment of debt, and the level of debt incurred by the City must be effectively controlled <br />to amounts that are manageable and within levels that will maintain or enhance the City’s credit rating. A <br />goal of debt management is to stabilize the overall debt burden and future tax levy requirements to ensure <br />that issued debt can be repaid and prevents default on any municipal debt. <br />Debt Management Practices: <br /> Prudent use of debt provides fiscal and service advantages. Overuse of debt places a burden on the fiscal <br />resources of the City and its taxpayers. The following guidelines provide a framework and limit on debt <br />utilization: <br />1.The City will confine long-term borrowing to planned capital improvements. <br />2.The City will not use long-term debt for current operations. <br />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 />81