Page 152 - Haltom City Budget FY21

CITY OF HALTOM CITY aNNUAL BUDGET, FY2021 SUPPLEMENTAL INFORMATION

Alternative Capital Financing. The City shall explore funding alternatives in addition to long-term
debt including leasing, grants and other aid, developer contributions, capital recovery fees, and
current funds.

Intergovernmental assistance will be used to finance only those capital improvements that 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 expenditures.

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.

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