Page 140 - Haltom City FY20 Approved Budget

City of Haltom City Annual Budget, FY 2020
Supplemental Information

are consistent with the Capital Improvement Plan and City priorities. As well as those
operating and maintenance costs which have been included in the operating budget.

Debt Management

Limits. The City will strive to limit general obligation annual debt requirements to 25% of
general government expenditures. Furthermore, the debt service portion of the tax rate
will not exceed $0.25 per $100 to service the bonds as approved by the voters in 2010.

Long-Term debt shall not be used for financing current operations. The life of the bonds
shall not exceed the useful life of the projects. Capital items financed with debt should
have a minimum useful life of four years.

Required Coverage. Revenue bond coverage (Water & Sewer) shall be maintained at a
minimum of revenues, less operating expenses, exceeding the annual debt service cost
by 25% (1.25 times coverage). This exceeds our covenanted standard of 1 times
coverage,

Continuing Disclosure. Full disclosure of operations and open lines of communication
shall be made to rating agencies. The City staff, with the assistance of bond advisors,
shall prepare the necessary materials and presentation to the rating agencies. Inter-
period reporting of material events to rating agencies and other oversight agencies is
required as events occur.

Variable Rate / Floating Rate Debt. Debt instruments structured with variable rate or
floating rate features (including derivatives) are to be utilized only after careful review by
the City’s financial advisor and bond counsel and subject to continuous monitoring and
reporting.

Cash and Investment Management Concepts

Objectives. The City shall manage and invest its cash with three objectives, listed in order
of priority: safety, liquidity, and yield. The safety of the principal invested always remains
the primary objective. All investments shall be designed and managed in a manner
responsive to the public trust and consistent with state and local law.

Management. The City shall maintain a comprehensive cash management program,
which includes collection of accounts receivable, vendor payment in accordance with
invoice terms, and prudent investment of available cash. Cash management is defined
as the process of managing monies in order to ensure maximum cash availability and
maximum yield on short-term investment of idle cash.

Review. Periodic review of cash flow position shall be performed to determine
performance of cash management and investment policies. Detail policy structures (City
Investment Policy and Depository Agreement) shall be followed with respect to
Cash/Treasury management.

Page 131