Title
CONSIDER RESOLUTION ADOPTING REVISED DEBT POLICY.
Presented by: Chris Chronis, Chief Financial Officer.
RECOMMENDED ACTION: Adopt the Resolution and authorize the Chairman to sign or deny the Resolution, as deemed appropriate.
Body
The current debt policy was adopted in 2009, and replaced a policy originally adopted in 1991 and revised in 2003. The policy explicitly places responsibility and accountability for debt financing with the CFO. It establishes a Debt Management Committee that is to periodically review debt and capital improvement plans and test adherence to the policy guidelines.
The policy prohibits the use of debt to finance operations or maintenance activities, and sets criteria under which debt is to be used for capital improvements or unusual equipment purchases.
It defines county debt capacity and limits the issuance of debt in the following ways:
1. Per capita debt will not exceed $500
2. Per capita direct, overlapping, and underlying debt will not exceed $3,000
3. Direct debt as a percentage of estimated full market value will not exceed 1.5%
4. Direct, overlapping, and underlying debt as a percentage of estimated full market value will not exceed 6%
5. Annual debt service will not exceed 20% (currently) or 9% until January 1, 2019 and 8% thereafter 8% (proposed) of budgeted expenditures of the General Fund and Debt Service Fund
The policy provides that additional County debt cannot be incurred if the annual debt service ratio is exceeded, or if more than two of the first four ratios are exceeded simultaneously.
It creates an expectation of rapid repayment of debt: 30% within 5 years and 60% within 10 years.
The policy contains guidelines addressing the following considerations:
1. Structure and term of debt issues
a. General obligation bonds
b. Public Building Commission revenue bonds
c. Revenue bonds
d. Special assessment bonds
e. Assumption of additional debts
f. Asset life
g. Length of debts
h. Call provisions
i. Variable ra...
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