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Cityof Louisville FINANCIAL POLICIES COLORADO • SINCE 1878 Introduction The City of Louisville is an organization charged with providing a wide range of services that are supported by a wide range of revenue sources. The City's Financial Policies have been established to guide the City in providing these services in the most efficient way possible within the bounds of available revenue. Financial policies are central to a strategic, long -term approach to financial management and are intended to serve as a blueprint to achieve the financial stability required to accomplish the City's goals and objectives. More specifically, the intent of adopting a written set of financial policies is to institutionalize good financial management, clarify strategic intent for financial management, define certain boundaries and limits on actions that staff may take, support good bond ratings, promote long -term and strategic thinking, manage risks to financial condition, and comply with established best practices in public management. The City's Financial Policies have been written in relatively broad terms as guidelines for financial management decisions. These policies should not be confused with administrative statements of operating procedure, which cover the detailed steps needed to accomplish business processes. The City's Financial Policies shall be adopted by resolution of the City Council. The policies shall be reviewed annually by management and any modifications made thereto must also be approved by resolution of the City Council. Definitions • Advanced Refunding — a refunding in which the outstanding bonds are callable and remain outstanding for a period of more than 90 days after the issuance of the refunding bonds. Proceeds from the sale of the refunding bonds are used to purchase permissible legal securities, which are deposited into an escrow account. • Agencies — federal agency securities and /or Government- sponsored enterprises. • Arbitrage — the difference between the interest paid on the tax - exempt securities and the interest earned by investing the proceeds in higher - yielding taxable securities. The Internal Revenue Service regulates arbitrage on the proceeds from the issuance of municipal securities. • Bankers' Acceptance — a draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer. • Broker— brings buyers and sellers together for a commission.