a. The City Council has adopted guidelines and policies intended to guide decisions related to debt issued by the City. Debt issuance should be evaluated on a case-by-case basis and considered within the context of the City’s overall capital structure and policy objectives. Adherence to the debt management policy is essential to ensure that the City maintains a sound debt position and to protect the credit quality of its debt obligations. The full text of the City’s Debt Management Policy is presented in the Debt Service section of the budget. Key components of the City’s Debt Management Policy are:
• The City will limit long-term debt to only those capital improvements or long-term liabilities that cannot be financed from current revenue sources.
• The City will utilize debt financing for projects which have a useful life that can reasonably be expected to exceed the period of debt service for the project.
• The City will strive to maintain or improve the City’s bond rating.
b. The City may utilize interfund loans rather than outside debt to meet short-term cash flow needs. If interfund loans are undertaken, formal promissory notes are prepared and interest charged as required by the City’s Interfund Loan Policy.