Page 72 - CityofEulessFY26AdoptedBudgetOrdinance2432

D. Compensated Absences — The City will establish a separate expenditure account within its operating
funds to pay for accrued vacation leave. Accrued vacation leave can normally be paid by allowing a
vacated position to remain open for several weeks. This account will be established based upon a
schedule of estimated retirements which will be developed in conjunction with the operating budget.
E, EauipmentlAsset Replacement — The City shall maintain an Equipment/ Asset Replacement Fund for
vehicles, equipment, and various assets. Funds will be transferred based on a depreciated calculation
of each piece of equipment or asset.
F. Health Claims — The City shall maintain a fund for health claims for all employees. Adequate reserves
shall be maintained as determined actuarially. All reasonable cost containments will be reviewed to
keep the cost to the City and the employees minimal.

X. DEBT MANAGEMENT
A, Short - Term Debt -- Short- term debt may be issued for interim financing, short economic life assets, or
funding operational cash flow deficits or anticipated revenues. If utilized, tax anticipation notes ( TAN' s)
will be retired in accordance with State law, and bond anticipation notes ( BAN' s) 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' s, but excluding BAN' s) of net operating revenues.

B. Lona- Term Debt — The City may issue long- term debt when it is deemed that capital improvements
should not be financed from current revenues, reserves, or short-term borrowings. Long -Term debt
will not be used for operating purposes, and the life of the bonds will not exceed the useful life of the
projects financed.
C. Self -Supporting Debt — When appropriate, self- supporting revenues will pay debt service in lieu of tax
revenues.
D. Rating — Full disclosure of operations will be made to the bond rating agencies. The City staff, with
the assistance of fiscal advisors or bond counsel, will prepare the necessary materials for and
presentation to the rating agencies.
E, Water and Wastewater Bond Coverage Ratios — The City has both revenue bonds and other
indebtedness of the Water and Wastewater Fund. The City will maintain two coverage ratios: 1. 50
for revenue bonds " technical average" and 1. 25 for all indebtedness " practical coverage". The City
will issue new debt for art Enterprise only after an " additional bonds" test has been applied to the
issuance. This test determines that revenues are sufficient to defray the additional debt service burden
that will be created by the new issuance.
F. Federal Reauirements — The City will maintain procedures to comply with arbitrage rebate and other
Federal requirements as necessary.
G. Debt Service Reserves — The Debt Service Fund will maintain a minimum level of reserves equal to
one month of principal and interest. This does not include the amounts accrued for the next debt
service payment.
The policy above does not preclude the debt service reserves normally established to market revenue
bonds. The City' s policy and bond ordinance requirement are to maintain these debt service reserves
at the level of the average annual debt service.

H. Debt Burden — The Debt Burden should be within the norm of comparable cities. Specifically,
maintenance of capacity not to exceed the median per capita and per assessed valuation will be
monitored.
Debt Structuring — The City will issue bonds with an average life of twenty ( 20) years or less in order
to reduce net interest cost and maintain future flexibility by paying off debt earlier. The issuance should
contribute to an overall curve that is relatively flat.
J. Competitive vs. Negotiated Bidding — The City will analyze on a per issue and market basis the desire
to utilize competitive versus negotiated sale of bonds. In either instance, the fiscal staff will present to
management and council advantages and disadvantages of the process.
K. 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:

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Ordinance No. 2432, Page 72 of 474