A. Full And Complete Disclosure: In the preparation of financial reports, official statements or any other bond prospectus, the City will follow a policy of full and complete disclosure of financial and legal conditions of the City, including secondary market disclosures, in conformance with guidelines issued by the Government Finance Officers Association ("Disclosure Guidelines"), Securities and Exchange Commission Rule 15c2-12, and as advised by disclosure counsel. The Management Services Department will participate in the issuance of all debt to provide appropriate coordination.
B. Balanced Relationship: The City's capital budgeting and financial management policies will attempt to maintain a balanced relationship between issuing debt and pay as you go financing. Pay as you go funding for near term projects will be reviewed as an alternative to or to be done in conjunction with debt financed capital improvements.
C. Capital Improvements: The City will not use proceeds from long term debt to finance current year operating costs or revenue shortfalls. Long term borrowing will be confined to capital improvements, or other major projects that cannot be financed from current year revenues. Further, when the City issues bonds to finance capital projects, the bonds will be amortized within a period not to exceed the expected useful life of the asset being financed.
D. Short Term Cash Flow Needs: The City will issue Tax and Revenue Anticipation Notes for the sole purpose of meeting short term cash flow liquidity needs, and will size the issue and time the sale to meet the "safe harbor" provisions of the Federal Tax Code which exempt the notes from arbitrage rebate.
E. Fiscal Impact Analysis: The City will analyze the fiscal impact of debt financed capital projects on the City's operating budget and coordinate this analysis with the budget development process.
F. Types Of Bonds: The City will consider several factors in determining which type of bonds to issue (e.g., general obligation, revenue, lease revenue bonds, etc.), including the following:
1. Direct and indirect beneficiaries of the project(s). A significantly large portion of citizens should benefit from projects financed by general obligation bonds;
2. Time pattern of the stream of benefits generated by the project;
3. Alternative types of existing or potential user charges and the ability to generate revenue by controlling rates;
4. Effect of the proposed bond issue on the City's ability to finance future projects of equal or higher priority;
5. The likely interest costs and costs of issuance of each alternative type of issue; and
6. Impact of the issue on the City's financial position and credit ratings.
G. Refunding Bond Issues: The City will analyze the potential of preparing for refunding bond issues, particularly during periods of lower than normal interest rates or on an as needed basis. Refundings will be pursued under the following circumstances:
1. To eliminate unsuitable indentures or outdated and/or overly restrictive covenants;
2. To restructure debt payments to better meet budgetary constraints or opportunities, or to more closely coincide with anticipated revenue stream(s); and/or
3. To take advantage of market opportunities of achieving significant present value savings, considered to be at least two percent (2%) or greater on outstanding principal or where the final maturity of the outstanding bonds is of a short duration. (2019 Compilation)