(A) Use of general obligation debt: The city intends to use general obligation debt for non-enterprise capital improvements which it considers to be part of its core mission. To the extent that the city has ample general obligation capacity under the 10 mill limitation and direct and indirect statutory debt limits, it will consider issuing general obligation bonds for its various enterprises (water and sewer).
(B) Use of revenue bonds:
(1) The city may issue revenue bonds for projects that have a definable user or revenue base. Revenue bonds are secured only by a specific source of funds, either from the operations of the project being financed or from a dedicated revenue stream, rather than the general taxing power of the city.
(2) If there is capacity, it may be in the best interest of the city to issue "double-barreled" bonds which are secured both by a dedicated revenue stream as well as by the city's general taxing powers (general obligation bonds).
(C) Duration: Ohio Revised Code provides guidelines on the maximum period of time for which capital improvements may be financed. However, the duration permitted by law may often exceed the city's expectations of the practical economic life of an asset. The city intends to have debt fully retired during the expected useful life of the asset being financed. However, generally the city does not expect to issue debt with a final maturity more than 20 years from the date of issuance.
(D) Bond anticipation notes: Bond anticipation notes are an interim means of financing and, by their very nature, expose the city to interest rate and market risk upon renewal. Notes may be used to:
(1) Finance small projects until such time as the project or projects can be rolled into a larger bond sale;
(2) During times of high interest rates and when the expectation that interest rates are stable or trending downward; and
(3) On an interim basis during the construction period for a revenue producing project until such time as the project is placed into service.
(Ord. 31-16, passed 9-12-16)