8.2. Review By Audit & Finance Committee (AFC) All proposed long-term financing transactions for capital improvements shall be reviewed by the City’s Audit and Finance Committee. For matters related to review by the AFC, “long-term financing” means financing that constitutes an obligation beyond one fiscal year. a. The City Council should not authorize the issuance of any long-term financing until the AFC completes its review of the proposed transaction and submits its recommendation to the City Council. b. The Managing Director of Finance, City Manager and City Attorney should review proposed transactions submitted to the AFC prior to submission. c. Upon approval by the AFC, the proposed transaction shall then be presented to the full City Council. d. In the absence of a quorum of the AFC, the Managing Director of Finance has the authority to present the proposed transaction to the City Council without prior review of the AFC. e. The City Council shall comply with all public hearing requirements applicable to the specific type of bond being approved. DEBT LIMITATIONS 1. The total principal amount of general obligation bonds together with the principal amount of all other outstanding tax indebtedness of the City shall not exceed ten (10) percent of the total assessed valuation of the City’s tax rolls.
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2. Since debt service payments represent a fixed expense and impacts the City’s total budget, the City will not issue debt that negatively impact its ability to fund current operations or limit projected operational funding requirements. 10.0 MATURITYLEVELS The term of debt shall not exceed the expected useful life of the capital asset being financed, and in no case shall it exceed thirty (30) years. 11.0 METHODS OF SALE The City will use the method of sale that results in the most cost effective, efficient debt issuance process. The Managing Director of Finance will determine the method of sale. 11.1. Competitive Sale The City shall seek to issue its debt obligations in a competitive bidding environment. Bids shall be awarded on a True Interest Cost basis providing the bidders meet other bidding requirements. In some instances, the City may award the sale to the lowest Net Interest Cost bidder depending on the economic substance of the transaction. If the competitive bidding process is not conducive to soliciting the lowest cost of financing a bond issuance, the City may choose to negotiate the sale.
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