Page 263 - Ord 866 Adopting a revised Fiscal Year 17-18 and new proposed Fiscal Year 18-19 budget

Section 7 Debt Service Funds
Debt Service Funds Overview

The two Debt Service Funds for the Town of Westlake are used to manage payments on all
general government related debt associated with the construction of Westlake Academy
facilities. Any future debt issuances will also be paid from these two funds.

Town Council and staff are dedicated to a conservative pattern of debt issuance that ensures
property tax rates remain among the lowest in the region and attractive to prospective businesses
and residents. Recognizing that long-term debt is usually a more expensive financing method,
alternative financing sources will be explored before debt is issued. When debt is issued, it will be
used to acquire major assets with expected lives which equal or exceed the average life of the
debt issue.

Debt Management Practices
Debt management policies are written guidelines and restrictions that affect the amount and
type of debt issued by a state or local government, the issuance process, and the management
of a debt portfolio. A debt management policy improves the quality of decisions, provides
justification for the structure of debt issuance, identifies policy goals, and demonstrates a
commitment to long-term financial planning, including a multi-year capital plan.

Adherence to a debt management policy signals to rating agencies and the capital markets that
a government is well managed and should meet its obligations in a timely manner. Debt levels
and their related annual costs are important long-term obligations that must be managed within
available resources. An effective debt management policy provides guidelines for a government
to manage its debt program in line with those resources.

The Town of Westlake debt management policies are reviewed annually and revised as necessary
and address the following:

Direct Debt - debt payable from ad valorem I& S tax, and other available fund of the Town.
Interfund Borrowing – loans for short- term cash flow needs.

Debt Approval Process

Town Manager and Staff Identify Capital
Projects to present to Council

Reviewed by Town Council at
Budget Workshop

Approved Not Approved

Added to CIP and Budget
Moved to Unfunded Status

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