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CITY OF BILLINGS BONDED DEBT POLICY February 12, 2001 OBJECTIVE The objective of the City of Billing’s bonded debt management policy is to maintain the City’s ability to issue bonded debt at the most beneficial interest rates and in the amounts necessary to fund those projects approved in the capital improvement plan. POLICY STATEMENTS • A five-year capital improvement plan will be developed and updated annually. The plan will include projects and funding sources. • Capital projects financed through the issuance of bonds will be financed for no longer than the useful life of the project. • The Finance Department will determine the cost/benefit for rating bond issues and, if it is determined that rating the bonds will be cost effective, or that the bond issue should be rated to protect ratings assigned to previous bonds, the bonds will be rated by at least one of the major bond rating agencies prior to issuance. • The City Finance Department will maintain on-going communications with bond rating agencies concerning the City’s financial condition. • Benchmark goals for General Obligation (GO) debt indicators are: • GO debt per capita – less than $400 (This would currently allow up to $37,200,000 GO debt) • GO debt as percent of total taxable valuation – less than 22.4% (This is 80% of the maximum allowed by State law and would currently allow up to $25,450,000 GO debt) • Annual GO debt service as % of general govt. operating revenue (Excluding special assessments) - less than 10% (This would allow up to $4.1 million in annual GO debt service which will support about $40 million in debt) • Enterprise operations of the City will be managed to maintain an or better credit rating from one or more of the major bond rating agencies. • The City will cooperate with other taxing jurisdictions to ensure that overall debt burdens are within affordable limits for the community and that jurisdictions are not competing for approval of projects to be financed with voter approved GO bonds. Approved by the City Council: February 12, 2000. ss. – Charles F. Tooley, Mayor ATTEST: ss. – Marita Herold, CMC/AAE City Clerk