Page 299 - FY 2009 Proposed Budget

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FINANCIAL POLICIES (CONTINUED)

Debt Management

 Debt financing which includes permanent improvement bonds, revenue bonds, certificates of obligation, lease/purchase
agreements and other obligations allowed under Texas law shall be used to acquire or construct land and improvements
that cannot be funded by current revenues. The term of debt shall not exceed the expected useful life of the capital asset
being financed and in no case shall it exceed 25 years.

 Debt will not be used to fund current expenditures.

 Permanent Improvement Bonds shall normally be issued with a level principal structure. This structure equates to an
average life of 11 years or less for a 20-year issue. Interest shall be paid in the first fiscal year after a bond sale and
principal must be paid no later than the second fiscal year after the bond sale.

 Each year the City will adopt a capital improvement plan. The plan will recommend specific funding of projects for the
following two fiscal years and will identify projects for further consideration in years three through five.

 The City is committed to providing continuing disclosure of certain financial and operating data and material event notices
as required by Securities and Exchange Commission (SEC) Rule 15c2-12. The Finance Department shall be responsible
for the preparation of all disclosure documents and releases required under Rule 15c2-12.

 The City will obtain a rating from at least one nationally recognized bond-rating agency on all issues being sold on the public
market. Required information will be presented to the rating agency(s) at least annually in order to maintain ratings on
outstanding debt.

 The City shall comply with the Internal Revenue Code Section 148 – Arbitrage Regulations for all tax-exempt debt issued.
An annual estimate of arbitrage liabilities shall be obtained by the City and recorded on the financial statements.

 A good faith deposit of 2.0% of the par amount of the bond sale shall be presented by the underwriter in the form of a check
or surety acceptable to the City and Bond Counsel prior to the approval of the bonds by the Mayor and City Council.

 The City shall use a competitive bidding process in the sale of debt unless the use of a negotiated process is warranted due
to market timing requirements (refunding), or a unique pledge or debt structure. The City will award competitively issued
debt on a true interest cost (TIC) basis.

 The City welcomes ideas and proposals from investment bankers and will seek to give first consideration to those firms that
submit unique and innovative ideas that benefit the City. Unsolicited proposals should be submitted to the City’s Finance
Department.

 The selection of an underwriter or group of underwriters for a negotiated sale shall be based on the following factors:
o Participation in the City’s competitive sales;
o Submission of unique or creative proposals;
o Qualifications of firm;
o Size and geographic distribution of their sales staff.

2021 Adopted Budget and Business Plan 288 City of Arlington, Texas