Legal Documents of Rocky Top

Code of Rocky Top

Table of Contents » Title 5 Municipal Finance and Taxation » Chapter 6 Debt Policy » § 5-606 Types and limits of debt.
Print This Page
PDF
Go to
5
Title 5
5-1
Title 5, Chapter 1
5-101
§ 5-101
Rocky Top
Title 5 : Municipal Finance and Taxation
Chapter 6 : Debt Policy

5-606 : Types and limits of debt.

  1. The city will seek to limit total outstanding debt obligations to ten (10) times annual operating revenue, 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 city's total outstanding debt obligation will be monitored and reported to the city council by the mayor. The mayor shall monitor the maturities and terms and conditions of all obligations to ensure compliance. The mayor shall also report to the city council any matter that adversely affects the credit or financial integrity of the city.
  4. The city has issued bonds in the past and is authorized to issue general obligation bonds, revenue bonds, TIFs, loans, notes and other debt allowed by law. The city has determined it currently will not issue complex debt instruments such as swaps or derivatives.
  5. The city will seek to structure debt with level or declining debt service payments over the life of each individual bond issue or loan.
  6. As a rule, the city 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 city 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.
  7. The city may use capital leases to finance short-term projects.
  8. Bonds backed with a general obligations pledge often have lower interest rates than revenue bonds. The city 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 city. The city council and management are committed to maintaining rates and fee structures of revenue supported debt at levels that will not require a subsidy from the city's general fund. (This provision is necessary only if the city has a source of repayment for a revenue bond, such as a water or sewer system.) (Ord. #467, Jan. 2012, modified)