Page 411 - Keller FY20 Approved Budget

3.5 Interest earnings on bond proceeds shall be credited to the appropriate bond fund and
will be used to help with future debt management.

3.6 For capital budgeting purposes, capital improvement projects for facilities (fire stations,
libraries, City Halls, etc.) will not only reflect cost of acquisition or construction of the facility, but
shall also reflect the annual operating costs of staffing, equipping, operating and insuring of the
facility in the impacted operating fund. The City shall not finance annual operating costs with the
issuance of debt, per Section 4.1.

3.7 The City will measure the condition of our infrastructure, and the degree to which the City
is meeting infrastructure replacement needs. The City will budget to make timely infrastructure
repairs and replacements to avoid additional repairs and/or long-term damage.

3.8 The City Council may establish, by resolution, policies and procedures for prioritizing
capital project improvements, establishing a reserve therefore, and the funding thereof in
accordance with the provisions of the City's Financial Management Policies.

4. Debt Management.

4.1 Long-term debt shall not be incurred to finance on-going operations. Long-term debt
shall be defined as debt requiring more than five years to retire. Short-term or interim debt shall
be defined as debt requiring five years or less to retire, and may be used to fund purchases of
machinery, equipment (including office equipment) and vehicles.

4.2 When any debt is issued to finance capital improvements, the City shall retire the debt
within a period not to exceed the expected useful life of the projects or improvements being
financed. When possible the debt should not exceed 15 years unless the expected asset life is
beyond 50 years.

4.3 Total debt service requirements (principal and interest) in any fiscal year should generally
not exceed twenty-five percent (25%) of the City’s total operating expenditures/expenses
(excluding capital projects funds).

4.4 Total direct general obligation debt service requirements shall not exceed fifteen percent
(15%) of the assessed value of taxable property.

4.5 The City shall maintain good communications with the major bond rating agencies con-
cerning the City's financial condition, and shall follow a policy of full disclosure in every financial
report and official bond statement. The City will maintain sound fiscal management practices to
maintain and improve current bond ratings.

4.6 Interest and sinking fund and/or debt reserve balances shall be maintained in accordance
with the City's most restrictive bond ordinances and/or covenants.

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