It is the intent of the city to: ensure high quality debt management decisions, impose order and discipline in the debt issuance process, promote consistency and continuity in decision making, demonstrate commitment to long term financial planning objectives and ensure debt management decisions are viewed positively by rating agencies, investment community and taxpayers. This policy shall be implemented by the city’s Debt Committee when developing comprehensive debt management guidelines that provides for the following:
(A) Full and timely payment of principal and interest on all outstanding debt;
(B) Debt shall be incurred for those purposes as provided by state statute;
(C) Capital improvements should be developed, approved and financed in accordance with city ordinances and the capital improvement budgeting process;
(D) The payment of debt shall be secured by the full faith, credit and taxing power of the city, in the case of general obligation bonds, and by the pledge of specified, limited revenues in the case of revenue bonds. The city shall not pledge any city revenues to its conduit bond financings. Furthermore, the city has no moral obligation to repay bondholders of conduit financings issued under its authority;
(E) Principal and interest retirement schedules shall be structured to: (1) achieve a low borrowing cost for the city, (2) accommodate the debt service payments of existing debt and (3) respond to perceptions of market demand. Shorter maturities will always be encouraged to demonstrate to rating agencies that debt is being retired at a sufficiently rapid pace;
(F) Debt incurred shall generally be limited to obligations with serial or term maturities, but may be sold in the form of capital appreciation bonds or other structures if circumstances warrant;
(G) The average life of the debt incurred should be no greater than the projected average life of the assets being financed;
(H) The city shall select a method of sale that will maximize the financial benefit to the city. Such sales can be competitive, negotiated or privately placed, depending upon the project and market conditions. All methods of sale shall be subject to Council approval;
(I) Underwriters shall be selected in accordance with the City Purchasing Ordinance and the selection should maximize the quality of services received while minimizing the cost to the city. Any additions to the underwriting teams shall be subject to Council approval. Selected underwriters shall adhere to the Municipal Securities Rule-making Board (“MSRB”) and the Securities and Exchange Commission (“SEC”) rules and regulations;
(J) The city shall maintain good communications with bond rating agencies to ensure complete and clear understanding of the creditworthiness of the city; and
(K) Every financial report, bond prospectus and Annual Information Statement shall follow a policy of full and complete disclosure of financial conditions and operating results, in conformance with guidelines issued by the Government Finance Officers Association (GFOA), Securities Exchange Commission (SEC) and the Internal Revenue Service (IRS) to meet the disclosure needs of rating agencies, underwriters, investors and taxpayers.
(Ord. 20-2001)