125.05 DEBT POLICY.

   The City Council does hereby establish the following debt policy:

   (a)   The City will not use debt to fund current operations, reserves or contingencies.

   (b)   The City will confine long-term borrowing to long-term capital improvements for projects that cannot be financed from current revenues.

   (c)   The City will use special assessment or other self-supporting debt instead of general obligation bonds whenever possible.

      (Ord. 1997-15. Passed 3-11-97.)

   (d)   When the City finances capital projects by issuing bonds, it will pay back the bonds within a period not to exceed the expected useful life of the project. The maximum period will not exceed twenty years, except for the issuance of bonds for the construction of the City of Loveland YMCA, which bond shall not exceed twenty- eight years.
(Ord. 2007-62. Passed 8-28-07.)

   (e)   The City will seek level or declining debt repayment schedules and will avoid issuing debt that provides for balloon principal payments reserved at the end of the term issue.

   (f)   The City will avoid variable rate debt due to the potential volatility of such instruments.

   (g)   Total long-term general obligation debt will not exceed 3% of the assessed valuation of taxable property, excluding self-supported debt.

   (h)   Total debt service for long-term general obligation debt, excluding self-supporting debt, will not exceed ten percent (10%) of total annual unrestricted governmental revenue. The formula for unrestricted governmental revenue is General Fund revenues (less grants, transfers and estate tax), Net Income Tax Collections (less refunds) and Interest Income.

      (Ord. 1997-15. Passed 3-11-97.)