PART I - DEBT MANAGEMENT
The mission of the Financial Services Debt Management Division is to ensure the City of DeSoto’s ability to efficiently fund all capital needs and ensure the comprehensive administration of ongoing fiscal controls in managing the issuance of short and long-term financings for both capital improvements and equipment needs. This will be accomplished by monitoring, evaluating and balancing market, credit and interest rate risks with economic benefits and financial impacts. 1.0 POLICY It is the policy of the City of DeSoto to develop and maintain a sound debt management program. This policy sets forth the parameters for issuing new debt as well as managing the outstanding debt portfolio, identifying the types and amounts of permissible debt, and maintaining the current bond rating in order to minimize borrowing costs and preserving access to credit. It is the intent of the City to establish policies that will provide guidance to staff on how to: a. Ensure efficient, cost effective and timely access to capital to fund all capital asset needs; b. Identify, reduce and manage interest rate, counterparty and general market risk; c. Ensure compliance with all regulatory, legal and contractual requirements and commitments; d. Ensure full public understanding and involvement by full disclosure and transparency; e. Ensure high quality debt management decisions; f. Ensure that debt management decisions are viewed positively by rating agencies, the investment community and citizenry-at-large; 2.0 SCOPE AND APPLICATION The City of DeSoto Debt Management Policy (this “Policy”) applies to all debt instruments issued by the City of DeSoto regardless of the funding source. Funding sources can be derived from ad valorem taxes, general City revenues, enterprise fund revenues or any other identifiable source of revenue that may be identified for appropriate pledging for bonded indebtedness. This Policy sets forth comprehensive guidelines for the financing of capital expenditures. This Policy and any subsequent amendments hereto shall be on file with the Financial Services Department, contained on the City’s website, with copies delivered to the City Secretary, the City Council and the Chair of the City’s Audit and Finance Committee. g. Ensure support for debt issuances both internally and externally; h. Demonstrate a commitment to long-term financial planning. A debt management policy offers several advantages. First, it can help community leaders integrate the issuance of debt with other long-term planning goals, while providing guidance on acceptable levels of indebtedness. This is helpful because market conditions and plans frequently change over time. Second, it frames and streamlines the decisions-making process before any decisions need to be made, making it easier to remain true to core values and long-term objectives under stress. Third, it can help educate the community about the debt issuance process; once bonds are issued, it is useful in evaluating the impact of each issue on the jurisdiction’s overall financial position. Fourth, this is extremely valuable since debt capacity is limited and governments must make each dollar count; therefore, a debt management policy should be sufficiently flexible to permit governments to take advantage of market opportunities or to respond to changing conditions without jeopardizing essential public services.
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