Page 39 - CITY OF AZLE, TEXAS

2. Fund balance that exceeds the minimum level established for each fund may be
appropriated for non-recurring capital projects or programs.

3. The City will exercise diligence in avoiding the appropriation of fund balance for
recurring operating expenditures. In the event fund balance is appropriated for
recurring operating expenditures to meet the needs of the Azle community, the
budget document shall include an explanation of the circumstances requiring the
appropriation of and the methods to be used to arrest the future use of fund
balance for operating expenditures.

DEBT EXPENDITURES

1. The City will issue debt only to fund capital projects that cannot be supported by
current annual revenues.

2. To minimize interest payments on issued debt, the City will maintain a rapid debt
retirement policy by issuing debt maturities not exceeding twenty-five (25) years.
Retirement of debt principal will be structured to ensure constant annual debt
payments.

3. The City will attempt to maintain base bond ratings (prior to issuance) of A1
(Moody’s Investor Services) and A+ (Standard & Poor’s, Fitch Ratings) on its
general obligation debt.

4. When needed to minimize annual debt payments, the City will obtain insurance
for new debt issues.

CAPITAL PROJECT EXPENDITURES

1. The City will develop a multi-year plan for capital projects, which identifies all
projects likely to be constructed within a five year horizon. The multi-year plan
will reflect for each project the likely source of funding and attempt to quantify the
project’s impact to future operating expenditures.

2. Capital projects will be constructed to:

a. Protect or improve the community’s quality of life.
b. Protect and enhance the community’s economic vitality.
c. Support and service new development.

UTILITY CAPITAL EXPENDITURES

1. The City will design utility rates sufficient to fund the day-to-day operations of the
utility system and to maintain compliance with bond covenants associated with
debt issued for utility capital projects. Whenever possible, the City will attempt to
fund capital projects from unallocated Utility Fund reserves.

City of Azle FY 2024-2025 Budget 28