Page 68 - Burleson FY22 City Budget

The City will adhere to the investments authorized through the Texas’ Public Funds Investment Act and the city’s
established comprehensive Investment Policies and Guidelines. Such policies clarifies acceptable investment
securities, brokers, terms, and other pertinent investment information.

B. TYPES OF DEBTS

a. SHORT-TERM DEBT. Pursuant to the City Charter, tax anticipation notes ("TAN)") will be retired annually and
will not exceed 25% of anticipated taxes. Bond anticipation notes ("BAN") will be retired within six months of
completion of the project. Any short-term debt outstanding at year-end will not exceed 5% (including TAN but
excluding BAN) of net operating revenues.

b. LONG-TERM DEBT. Long-term debt will not be used for operating purposes, and the life of a bond issue will
not exceed the useful life of a project financed by that bond issue.

c. SELF-SUPPORTING DEBT. When appropriate, self-supporting revenues will pay debt service in lieu of tax
revenues.

C. ANALYSIS OF FINANCING ALTERNATIVES. The City will explore all financing alternatives in addition to long-term
debt including leasing, grants and other aid, developer contributions, impact fees, and use of reserves of current
monies.

D. DISCLOSURE TO RATING AGENCIES. Full disclosure of operations will be made to the bond rating agencies and other
users of financial information. The City staff, with the assistance of financial advisors and bond counsel, will prepare the
necessary materials for presentation to the rating agencies, will aid in the production of Offering Statements, and will
take responsibility for the accuracy of all financial information released.

E. FEDERAL REQUIREMENTS. The City will maintain procedures to comply with arbitrage rebate and other Federal
requirements.

F. DEBT STRUCTURING. The City’s non-self-supporting debt will issue general obligation bonds with an average life of
10.5 years or less, not to exceed the life of the asset acquired. Self-supporting debt will also issue general obligation
bonds with an average life of 10.5 or less except in cases specifically approved by City Council. In no case will debt
life exceed the life of the underlying asset.

The structure should approximate level debt service unless operational matters dictate otherwise or if market
conditions indicate a potential savings could result from modifying the level payment stream.

Consideration of market factors, such as the tax-exempt qualification, minimum tax alternative, and so forth will be
given during the structuring of long-term debt instruments.

G. DEBT ISSUANCE.

1) Method of Sale. The City will use a competitive bidding process in the sale of bonds unless the nature of the issue
warrants a negotiated bid. In situations where a competitive bidding process is not elected, the City will publicly
present the reasons why, and the City will participate with the financial advisor in the selection of the underwriter
or direct purchaser.

2) Bidding Parameters. The notice of sale will be carefully constructed so as to ensure the best possible bid for the
City in light of the existing market conditions and other prevailing factors. Parameters to be examined include:

a. Limits between lowest and highest coupons
b. Coupon requirements relative to the yield curve
c. Method of underwriter compensation, discount or premium coupons
d. Use of True Interest Cost (TIC) vs. Net Interest Cost (NIC)
e. Use of bond insurance

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