Legal Documents of Rocky Top

Code of Rocky Top

Table of Contents » Title 5 Municipal Finance and Taxation » Chapter 6 Debt Policy » § 5-610 Refinancing outstanding debt.
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Title 5
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Title 5, Chapter 1
5-101
§ 5-101
Rocky Top
Title 5 : Municipal Finance and Taxation
Chapter 6 : Debt Policy

5-610 : Refinancing outstanding debt.

  1. The city will refund debt when it is in the best financial interest of the city to do so, and the city recorder shall have the responsibility to analyze outstanding bond issues for refunding opportunities. The decision to refinance must be explicitly approved by the governing body, and all plans for current or advance refunding of debt must be in compliance with state laws and regulations.
  2. The city recorder will consider the following issues when analyzing possible refunding opportunities:
    1. Onerous restrictions. Debt may be refinanced to eliminate onerous or restrictive covenants contained in existing debt documents, or to take advantage of changing financial conditions or interest rates.
    2. Restructuring for economic purposes. The city will refund debt when it is in the best financial interest of the city to do so. Such refunding may include restructuring to meet unanticipated revenue expectations, achieve cost savings, mitigate irregular debt service payments, or to release reserve funds. Current refunding opportunities may be considered by the city recorder if the refunding generates positive present value savings, and the city recorder must establish a minimum present value savings threshold for any refinancing.
    3. Term of refunding issues. The city will refund bonds within the term of the originally issued debt. However, the city recorder may consider maturity extension, when necessary to achieve a desired outcome, provided such extension is legally permissible. The city recorder may also consider shortening the term of the originally issued debt to realize greater savings. The remaining useful life of the financed facility and the concept of inter-generational equity should guide this decision.
    4. Escrow structuring. The city shall utilize the least costly securities available in structuring refunding escrows. Under no circumstances shall an underwriter, agent or financial advisor sell escrow securities to the city from its own account.
    5. Arbitrage. The city shall consult with persons familiar with the arbitrage rules to determine applicability, legal responsibility, and potential consequences associated with any refunding. (Ord. #467, Jan. 2012)