Page 358 - Microsoft Word - FY 2022 Adopted Budget Document

Appendices Return to Table of Contents
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FINANCIAL POLICIES (CONTINUED)
8. The City shall obtain a clear opinion from qualified legal counsel that the City is not liable for the payment of principal and/or
interest in the event of default by a conduit borrower. If no such opinion can be obtained, the conduit borrower will be
required to purchase insurance or a letter of credit in the City’s name in the event of default. Examples of a conduit issuer
are special authorities, tax-increment financing districts, public improvement districts, or industrial development issuers.

In Compliance: Yes Comments: Bracewell continues to be the City’s Bond Counsel. They have issued opinions on
every issuance.

9. It is the City's priority to fund capital expenditures with cash or voter approved debt. However, non-voter approved debt
may be used for capital expenditures or risk management funding as an alternative to lease/purchase or other financing
options if the capital expenditure is:
 Urgent;
 Necessary to prevent an economic loss to the City;
 Revenue generating and expected to cover debt service out of the revenue source;

In Compliance: Yes Comments: The City continues to limit the issuance of COs.

Debt Management – Ratio Targets

1. The ratio of tax-supported debt to total taxable assessed valuation shall not exceed 2.0%. This excludes debt of overlapping
jurisdictions. The City shall structure its bond issuance to achieve and maintain a debt-to-assessed-value of 2.0% or less.

In Compliance: Yes Comments: FY20 ratio was 1.52%

2. The ratio of debt service expenditures to total expenditures (general fund operating expenditures and debt service
combined) shall not exceed 20%.

In Compliance: Yes Comments: FY20 ratio was 16.95%

3. The ratio of outstanding tax-supported debt to population shall not exceed $1,265 (as of Feb 2021). The per capita amount
will be revised matching CPI growth at least every three years. The new amount shall be presented to Council for approval
in conjunction with the Capital Budget.

In Compliance: Yes Comments: FY20 ratio was $1,139

4. The Finance Department shall prepare an analysis of the impact of proposed tax-supported debt prior to the issuance of
the additional debt. The analysis shall project the debt ratios described in numbers 1, 2, and 3 above as well as any other
applicable debt ratios. The analysis shall project the debt ratios described above both including and excluding Pension
Obligation Bonds as well as any other applicable debt ratios. The ratio limits in numbers 1, 2, and 3 above are exclusive of
the Pension Obligation Bonds.

In Compliance: Yes Comments: All ratios were projected and presented to Council with the FY21 CIP on March 31,
2021.

FY 2022 Adopted Budget and Business Plan 347 City of Arlington, Texas