Page 176 - PowerPoint Presentation

• Major maintenance projects not meeting Capital Project criteria as identified in the
Adopted Budget’s Capital Improvement Plan.
• Acquisition of technology hardware and/or software such as Geographic Information
Systems (GIS), public safety technology enhancements, and fiber optic technology.
• Local matches on State or Federal grants.
• One-time (i.e. non-reoccurring) employee performance pay

VII. DEBT MANAGEMENT
A. Debt Issuance Analysis - All consideration of debt issuance for major capital assets will be
prepared within the framework of a Council approved multi-year capital improvement plan and
forecast for all Town facilities and infrastructure.

B. Analysis of Debt Issuance and Debt Issuance Alternatives - Staff will explore alternatives to the
issuance of debt for capital acquisitions and construction projects.

These alternatives will include, but not be limited to,
• grants- in- aid
• use of reserves
• use of either current on-going general revenues or one-time revenues
• contributions from developers and others
• leases
• user fees
• impact fees

C. Use of Debt Financing - The useful life of the asset or project shall, at a minimum, exceed the
payout schedule of any debt the Town assumes. Debt financing instruments to be considered
by the Town may include:

• General obligation bonds - These must be authorized by a vote of the citizens of Westlake.
• Revenue bonds - These bonds generate capital requirements necessary for continuation or
expansion of a service which produces revenue and for which the asset may reasonable be
expected to provide for a revenue stream to fund the debt service requirement.
• Certificates of obligation - These can be authorized by Council approval with debt service
by either general revenues or backed by a specific revenue stream or a combination of
both.
• Lease/purchase agreements - These shall only be used to purchase capital assets that
cannot be financed from either current revenues or fund balance/retained earnings and to
fund infrastructure improvements and additions.

D. Assumption of Additional Debt - The Town shall not assume more tax-supported general-
purpose debt than it retires each year without first conducting an objective analysis as to the
community's ability to assume and support additional debt service payments.

E. Affordability Targets - The Town shall use an objective multi-year analytical approach to
determine whether it can afford to assume new general-purpose debt beyond what it retires
each year. This process shall compare generally accepted standards of affordability to the
current values for the Town. The process shall also examine the direct costs and benefits of
the proposed expenditures. The decision on whether or not to assume new debt shall be
based on these costs and benefits and on the Town's ability to "afford” new debt as
determined by the aforementioned standards. The Town shall strive to achieve and/or
maintain these standards at a low to moderate classification.

F. Debt Structure - The Town shall structure its debt payment schedules for general purpose debt
to ensure level principal repayment schedules. The Town shall not assume any debt with
"balloon' repayment schedules which consist of low annual payments and one large payment
of the balance due at the end of the term. While balloon payment structures minimize the size
of debt payments during the period, they force a large funding requirement on the budget of
the final year. Given the uncertainties of the future, level payment schedules improve budget

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