Debt Management Policy

I. POLICY - PURPOSE

The Debt Management Policy sets forth comprehensive guidelines for the financing of capital expenditures. It is the objective of the policy that (1) the District obtain financing only when necessary, (2) the process for identifying the timing and amount of debt or other financing be as efficient as possible and (3) the most favorable interest and other costs be obtained.

II. SCOPE - DEBT LIMITATIONS

Colorado Revised Statute 22-42-104 limits the District=s debt to 1.5% of the total assessed value of the District. This limit will be used as the total amount of indebtedness that can be accrued for the District, to include general obligation bonds, revenue bonds, certificates of participation, lease/purchase agreements, and other obligations permitted to be issued or incurred under Colorado law.

An additional debt restriction is defined in Colorado Revised Statute 24-90-112.5 (Library Law), which compares the overall county debt to assessed valuation with the library district debt to assessed valuation. This calculation will also be performed to ensure compliance.

The District will also calculate debt service as a percent of annual revenue, which will not exceed 12%.

III. GUIDELINES

A. RATING AND SALE REQUIREMENTS
The District’s minimum rating requirement for its direct, long-term, debt obligations is a rating of "A" or higher. If such a debt obligation cannot meet this requirement based on its underlying credit strength, then credit enhancement shall be sought to ensure that the minimum rating is achieved.

The District, as a matter of policy, shall seek to issue its debt obligations in a competitive sale unless it is determined by the Financing Team that such a sale method will not produce the best results for the District.

B. REBATE REPORTING AND COVENANT COMPLIANCE
The Manager of Finance shall establish a system of record keeping and reporting to meet the arbitrage rebate compliance requirements of the federal tax code.

C. ONGOING DISCLOSURE
The Manager of Finance shall be responsible for providing ongoing disclosure information to established national information repositories and for maintaining compliance with disclosure standards promulgated by state and national regulatory bodies.

D. TERMS AND USES OF DEBT FINANCING
Borrowings by the District mature over a term that does not exceed the economic life of the improvements that they finance. The District does not finance improvements with a probable useful life less than four years.

The District’s 10-year Financial Projection plan, evaluated in concert with the 5-Year Capital Improvement Plan, is used as a guideline and basis for determination of financing needs.

ADOPTED 4/04
DIRECTOR REVIEW 7/2013

Print