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11.6 <br /> <br />11.7 <br /> <br />11.8 <br /> <br />11.9 <br /> <br />11.10 <br /> <br />11.11 <br /> <br />11.12 <br /> <br />11.13 <br /> <br />(Draft January 2002) Key Financial Strategies <br /> For Elk River <br /> <br />50% 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 chat $10,000,000 in tax- <br />exempt bonds during any calendar year and apply "bank qualified" <br />status 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 <br />rebate 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 />non-tax sources to support debt. <br /> <br />Moody's Investors Service currently assigns an "AY' rating with a <br />positive outlook to the general obligation debt of Elk River. The City <br />shah strive to maintain or improve upon the current rating to achieve the <br />broadest market and lowest interest rates for City bonds. The City will <br />maintain open communications with bond rating agencies about its <br />financial condition. <br /> <br />The City will follow a policy of full disclosure in every financial report <br />and bond prospectus. The City will comply with Securities Exchange <br />Commission (SEC) reporting requirements and regulations on <br />continuing disclosure as they apply to each bond issue. <br /> <br />The City retains the services of an independent financial advisor to assist <br />City Staff with the issuance and management of debt. <br /> <br />City Staff, with the assistance of the financial advisor, shall monitor <br />outstanding debt and advise the City Council on ways to reduce the <br />debt burden through refinancing at lower interest rates and the early <br />retirement of bonds. Bonds shall not be refunded for savings unless the <br />present value of the savings exceeds 3% of the refunded principal and <br />125% of costs of issuance plus underwriter's discount. <br /> <br />Page <br /> 22 <br /> <br /> <br />