6.5. SR 10-03-2011 - Laserfiche WebLink

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The City will strive to repay all debt within the shortest practical period of time. Debt should not be amortized over more than 20 years. At least 50% of all outstanding principal should be retired within the next 10-year period. The amount of outstanding debt is not limited to a specific amount or ratio. In managing its debt, the City Council will balance need with the ability to raise revenues to pay debt service. The City will plan debt to avoid issuing more that $10,000,000 in tax-exempt bonds during any calendar year and apply "bank qualified" status to all issues. The City will strive to avoid arbitrage rebate and reporting by (a) not issuing more that $5,000,000 in tax-exempt bonds during any calendar year or (b) expending bond proceeds within the time limitations for rebate exemption imposed by federal regulations. The City minimizes the amount of debt supported by property taxes by making maximum use of special assessments, utility revenues, and other non-tax sources to support debt. Standard & Poor's currently assigns an "AA+" rating with a stable outlook to the general obligation debt of Elk River. The City shall strive to maintain or improve upon the current rating to achieve the broadest market and lowest interest rates for City bonds. The City will maintain open communications with bond rating agencies about its financial condition. The City will follow a policy of full disclosure in every financial report and bond prospectus. The City will comply with Securities Exchange Commission (SEC) reporting requirements and regulations on continuing disclosure as they apply to each bond issue. The City retains the services of an independent financial advisor to assist City Staff with the issuance and management of debt. City Staff, with the assistance of the financial advisor, shall monitor outstanding debt and advise the City Council on ways to reduce the debt burden through refinancing at lower interest rates and the early retirement of bonds. Bonds shall not be refunded for savings unless the present value of the savings exceeds 3% of the refunded principal and 125% of costs of issuance plus underwriter's discount. Financial Impact N/A Attachments ^ City of Elk River updated Debt Policy ^ Government Finance Review, August 2011 edition, page 50 Action Motion by Second by Vote Follow Up N:\Public Bodies\City Council\Coundl RCA\Agenda Packet\10-03-2011\updateddebtpolicy[1].docx