CC MEETING: November 19, 2024
DATE: November 12, 2024
TO: Erin Rinehart, City Manager
FROM: Diana K. Vaughn, Chief Financial Officer
Chrystal K. Davis, Assistant City Manager
Title
Consider A Resolution Adopting The Debt Management Policy.
Body
BACKGROUND:
The Debt Management Policy was first approved by Resolution Number 4756 by City Council on October 10, 2023. The policy outlines the guidelines for planning, issuing, managing, and monitoring the City’s debt obligations to ensure:
• Commitment to long-term capital and financial planning that maintains affordable tax rate and user fees.
• Preservation of financial strength to achieve the City’s strategic goals.
• Compliance with state and federal laws, existing obligation covenants, and the City’s Charter.
• Clearly defined debt management processes, roles, and responsibilities.
Staff completed the required annual review and recommends the following change to the policy:
• Change from maintain minimum of 20% fund balance of G.O. debt service requirement to maintain within the range of 12.3% to 20% fund balance of G.O. debt service.
Staff recommends a range of 12.3% (or approximately 45 days) to 20% (or approximately 73 days) to balance maintaining a secure fund balance without over taxing residents.
FINANCIAL IMPLICATIONS:
The limits, requirements, and guidelines in the policy are intended to assist the City in maintaining the current AAA credit rating and tax-exempt status which are essential for the City to access low-cost capital to fund essential and strategic projects.
IMPACT ON COMMUNITY SUSTAINABILITY:
The Debt Management Policy helps support the City’s financial position and sustainability.
STAFF RECOMMENDATION/ACTION DESIRED:
Consider a resolution adopting the Debt Management Policy limits, requirements, and guidelines related to the planning, issuance, management, and monitoring of the City’s obligations.