Title
CONSIDER RESOLUTION ADOPTING REVISED DEBT POLICY.
Presented by: Lindsay Poe Rousseau, 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 2016, and replaced a policy originally adopted in 1991 and revised in 2003 and 2009. Benchmarks used to define county debt capacity are intentionally conservative - that is, lower than levels commonly considered by credit analysts and potential investors to be acceptable. As a set of measures, they consider not only the impact of county-issued debt on the taxpayers and county budget, but also the impact of all tax-supported municipal debt on county taxpayers.
The current policy defines county debt capacity and limits the issuance of debt through the following benchmarks/ratios:
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%
Additionally, the policy states that the County will not engage in debt financing prior to January 1, 2019 if the proposed obligation, when combined with all existing debts, will result in annual debt service obligations exceeding 9% of budgeted expenditures, or in debt financing after January 1, 2019, if the proposed obligation, when combined with all existing debts, will result in annual debt service obligations exceeding 8% of budgeted expenditures.
The current 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.
The proposed action today would amend the limit on debt service as a pe...
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