3.0 OBJECTIVES The primary objective of this Policy is to ensure that the City establishes and maintains a solid position with respect to its debt service fund. It is intended to demonstrate that proceeds from long-term debt will not be used for current operations but rather for capital improvements and other long-term assets. The objectives of effective debt management also include: a . the city obtains financing only when necessary; b. the process for identifying the timing and amount of debt or other financing be as efficient as possible; c. the most favorable interest and other costs be obtained; d. bonds will be paid back within a period not to exceed, and preferably sooner than, the expected useful life of the capital project; e. decisions will be made based on a number of factors and will be evaluated against long-term goals rather than a short-term fix; f. debt service funds will be managed and invested in accordance with all federal, state and local laws; g. the City will maintain cost-effective access to the capital markets through prudent policies; h. maintain moderate debt and debt service payments with effective planning and coordination with City departments; i. meet significant capital demands through debt financing and alternate financing mechanisms such as public/private partnerships, and j. achieve the highest possible credit ratings within the context of the City’s capital needs and financing capabilities. 4.0 RECOMMENDATION RESPONSIBILITY 4.1 Primary Responsibility The primary responsibility for developing financing recommendations rests with the Managing Director of Financial Services. In developing the recommendations, the Managing Director of Financial Services shall be assisted by the Financial Advisor, City Manager and the Director of Development Services. The Managing Director of Financial Services shall be responsible for the following activities as follows: a. Meetings held no less than once a year with the City Manager and Department Managers to consider the need for financing and assess progress on the Capital Improvement Program, b. Review changes in state and federal legislation, review annually the provisions of ordinances authorizing issuance of obligations, and c. Periodically, at least annually, review the services provided by the Financial Advisor, Bond Counsel, Paying Agent and other service providers to evaluate the effectiveness and quality of services being provided. 4.2 Recommendation Considerations In developing financing recommendations, consideration will be given to the following factors: a. the amount of time the proceeds of obligation are expected to remain on hand and the related carrying cost; b. the options for interim financing including short term and interfund borrowing; c. the effect of the proposed actions on the tax rate and user charges; d. trends in interest rates; e. other factors as appropriate.
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