Legal Documents of Pittman Center

Code of Pittman Center

Table of Contents » Title 5 Municipal Finance and Taxation » Chapter 5 Debt Policy » § 5-506 Types and limits of debt.
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Title 5
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Title 5, Chapter 1
5-101
§ 5-101
Pittman Center
Title 5 : Municipal Finance and Taxation
Chapter 5 : Debt Policy

5-506 : Types and limits of debt.

  1. The town will seek to limit total outstanding debt obligations to four percent (4%) of total assessments, excluding overlapping debt, enterprise debt, and revenue debt.
  2. The limitation on total outstanding debt must be reviewed prior to the issuance of any new debt.
  3. The town's total outstanding debt obligation will be monitored and reported to the board of mayor and aldermen by the city administrator. The city administrator shall monitor the maturities and terms and conditions of all obligations to ensure compliance. The city administrator shall also report to the town board of mayor and aldermen any matter that adversely affects the credit or financial integrity of the town.
  4. The town has issued notes in the past and is authorized to issue general obligation bonds, revenue bonds, TIFs, loans, notes, financing leases, and other debt allowed by law. The town has determined it currently will not issue (complex debt instruments such as swaps or derivatives).
  5. The town will seek to structure debt with level or declining debt service payments over the life of each individual bond issue, loan, or other debt obligation.
  6. As a rule, the town will not backload, use "wrap-around" techniques, balloon payments or other exotic formats to pursue the financing of projects. When refunding opportunities, natural disasters, other non-general fund revenues, or other external factors occur, the town may utilize non-level debt methods. However, the use of such methods must be thoroughly discussed in a public meeting and the mayor and governing body must determine such use is justified and in the best interest of the town, as well as submitted to the comptroller's office for approval.
  7. The town may use financing leases (formerly called capital leases) to finance projects. The town will follow the guidance established by the Comptroller of the Treasury, Division of Local Government Finance when assessing potential financing leases. This guidance is pursuant to Tennessee Code Annotated § 9-24-101 "Uniformity in Local Government Lease Financing Act of 2021" and the Division of Local Government Finance's Debt Manual. LocalGovernmentDebtManualFinal.pdf (tn.gov)
  8. Bonds backed with a general obligations pledge often have lower interest rates than revenue bonds. The town may use its general obligation pledge with revenue bond issues when the populations served by the revenue bond projects overlap or significantly are the same as the property tax base of the town. The town board of mayor and aldermen and management are committed to maintaining rates and fee structures of revenue supported debt at levels that will not require a subsidy from the town's general fund. [This provision is necessary only if the town has a source of repayment for a revenue bond, such as a water or sewer system.] (Ord. #241, June 2012, modified, as replaced by Ord. #329, Jan. 2024 Ch2_01-18-24)