DeSoto FY21----FY22-Approved-Budget

life of an asset for more than fifteen (15) years, and will require issuing debt with an amortization of longer than 15 years. e. Voter authorized debt f. The total dollar amount of bond election propositions recommended to the voters shall not exceed the City’s estimated ability to issue said bonds within a normal 6-year period. g. The use of reimbursement resolutions shall be encouraged as a cash management tool for general obligation debt funded projects. h. Commercial paper can be used as a source of long-term financing for projects that have received voter authorization if City staff has determined that such financing is prudent. It is the policy of the City that the amount of commercial paper outstanding should not exceed 120% of the total investment portfolio of the City. It is the policy of the City that the net amount (total commercial paper less the investment portfolio) of commercial paper outstanding not exceed 25% of the amount of fixed rate debt outstanding. Commercial paper will be converted to refunding bonds when dictated by economic and business conditions. i. Quality-of-life projects are defined as projects such as but not limited to the City’s parks, museums, zoo, libraries, non-public safety facilities, and entertainment, sports and amusement-type facilities. 6.2 Certificates of Obligation – For Essential Nonimpact capital projects It is the City’s priority to fund the majority of capital projects with voter-approved debt. However, for capital requirements that are essential, ongoing and do not impact the debt service tax rates will be issued for the following type of projects/acquisitions:

a. Capital asset acquisitions (heavy equipment, vehicles, IT equipment, etc.); b. Rehabilitation and/or extension of the useful life of existing facilities c. Street resurfacing d. Unpaved Rights of Way e. ADA retrofitting/rehabilitation projects f. Street lighting g. Infrastructure projects (street and draining work) h. Emergency rehabilitation of city facilities (stormwater draining, etc.) i. Major core service facilities (police, fire, streets, etc.)

j. Emergency funding requirements k. Take advantage of market conditions Notwithstanding the policy set forth herein and in section 6.1, certificates of obligation or other long-term debt may be considered if the following criteria are met: 1) The need for the project is urgent and immediate; 2) Detailed information and justification is presented; 3) The project(s) is necessary to prevent an economic loss to the City; 4) Source of revenue is specific and can be expected to cover the additional debt; 5) The expected debt is the most cost effective financing option available. 6) In addition, the average maturity of non-voter approved debt shall not exceed the average life of the project financed. Capital items shall have a value of at least $5,000 and a life of at least four years. 7) Reimbursement resolutions may be used for projects funded through certificates of obligations.


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