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IEof C�tyLouisville FINANCIAL POLICIES <br />COLORADO - SINCE 1878 <br />Debt Policies <br />Policy Section: 3 <br />Adopted by Resolution No. 92, Series 2015 <br />Effective Date: December 15, 2015 <br />Purpose and Scope <br />To enhance creditworthiness and engage in prudent financial management, the City of <br />Louisville is committed to systematic capital planning and long-term financial planning. <br />Maintaining the City's bond rating is an important objective and, to this end, the City is <br />continually working to improve its financial policies, budgets, forecasts, and financial health. <br />These policies establish criteria for the issuance of debt obligations by the City so that <br />acceptable levels of indebtedness are maintained. The objectives of these policies are to <br />ensure that the City obtains debt financing only when necessary, that the process for identifying <br />the timing and amount of debt financing be as efficient as possible, that the most favorable <br />interest rates and related issuance costs are obtained, and that future financial flexibility <br />remains relatively unconstrained. <br />Debt financing includes general obligation bonds, revenue bonds, notes payable to the <br />Colorado Water Resources & Power Development Authority, leases, and any other City <br />obligations permitted to be issued or incurred under Colorado law, the City's Municipal Code, <br />and the City's Charter. <br />This policy does not apply to the Urban Revitalization District, a legally separate entity, but a <br />component unit of the City for financial reporting purposes. <br />Policies <br />3.1 Use of Debt Financing. Although the City will normally finance projects on a cash basis <br />(pay-as-you-go), the City may decide that the most equitable way of financing a project is <br />through debt financing (pay -as -you -use). <br />Factors which may favor pay-as-you-go financing include circumstances where: <br />• the project can be adequately funded from available current revenue and reserves; <br />• the project can be completed in an acceptable timeframe given the available resources; <br />• additional debt levels could adversely affect the City's credit rating or repayment <br />sources; or <br />• market conditions are unstable or are not conducive to marketing debt. <br />11 <br />