Page 295 - City of Westlake FY20 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 funds 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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