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11. <br /> <br />Debt <br />ll.1 <br /> <br />11.2 <br /> <br />11.3 <br /> <br />11.4 <br /> <br />11.5 <br /> <br />11.6 <br /> <br />11.7 <br /> <br />11.8 <br /> <br />11.9 <br /> <br />revolving fund allows the accumulation and protection of <br />reserves, creates flexibility in the use of assessment revenues and <br />authorizes debt for this purpose. The City will annually prepare <br />cash flow projections for street reconstruction projects to ensure <br />adequate and ongoing funding. <br /> <br />It is not in the best interests of the City to finance capital investment on a <br />cash only basis. Saving the money needed to undertake large capital <br />projects may prevent the City from providing needed improvements in a <br />timely manner and/or create unacceptable demands on revenues. A cash- <br />only approach places the entire financial burden on residents that precede <br />the project. Persons that follow the improvement and receive its benefit <br />do not pay. <br /> <br />The City will maintain operating reserves at sufficient levels to prevent the <br />need for short-term borrowing in anticipation of the receipt of revenues, <br />grants, or other funds. <br /> <br />Temporary financing will be used only when, in the judgment of the City <br />Council, short-term debt serves the best interests of the City. Factors that <br />favor the use of temporary debt include potential for large variations in <br />project expenses, potential for future lower interest rates, ability to reduce <br />long-term debt, and the ability to better manage taxes and other revenues. <br /> <br />All bond issues and other obligations shall be repaid before the end of the <br />useful life of the financed asset. <br /> <br />The City will strive to repay all debt within the shortest practical period of <br />time. Debt should not be amortized over more than 20 years. At least 50 <br />percent of all outstanding principal should be retired within the next 10- <br />year period. <br /> <br />The amount of outstanding debt is not limited to a specific amount or <br />ratio. In managing its debt, the City Council will balance need with the <br />ability to raise revenues to pay debt service. <br /> <br />The City will plan debt to avoid issuing more that $10,000,000 in tax- <br />exempt bonds during any calendar year and apply "bank qualified" status <br />to all issues. <br /> <br />The City will strive to avoid arbitrage rebate and reporting by (a) not <br />issuing more that $5,000,000 in tax-exempt bonds during any calendar <br />year or (b) expending bond proceeds within the time limitations for rebate <br />exemption imposed by federal regulations. <br /> <br />The City minimizes the amount of debt supported by property taxes by <br />making maximum use of special assessments, utility revenues and other <br /> <br />12 <br /> <br /> <br />