FY2018 Recommended Budget

that a government maintains a sound debt position and that credit quality is protected. Advantages of a debt policy are as follows:

a) Enhances the quality of decisions by imposing order and discipline b) Promotes consistency and continuity in decision making c) Rationalizes the decision making process d) Identifies objectives for staff to implement e) Demonstrates a commitment to long-term planning objectives f) Regarded as a positive by the rating agencies in reviewing credit quality

It is the policy of the Town Council:

a) Periodically approve the issuance of Debt Obligations on behalf of the Town to finance the construction or acquisition of infrastructure & other assets for the purpose of meeting its governmental obligations to its residents b) Approve the issuance of Debt Obligations to refund outstanding debt when indicated by market conditions or management considerations c) Debt obligations are issued & administered in such a manner as to ensure & sustain the long-term financial integrity of the Town, to achieve the highest possible credit rating, to preserve & enhance the quality of life, & the safety & welfare of its citizens

Debt issuance will not be used to finance current operations or normal maintenance.

The Town will strive to maintain its annual tax-supported debt service costs at a level no greater than fifteen percent (15%) of the governmental expenditures, including installment purchase debt. Payout of aggregate outstanding tax-supported debt principal shall be no less than 55% repaid in 10 years. The tax-supported debt of the Town will not exceed two (2%) percent of the assessed valuation of the taxable property of the Town.

Whenever possible, the Town will first attempt to fund capital projects with grants or developer contributions.

The types of debt currently used by the Town of Morrisville include general obligation bonds and installment purchase agreements. The Town may pursue other methods of financing based upon the direction of the Town Manager and approval of the Town Council. The Town will only use debt instruments, which are approved for local government.

The Town will comply with standards of the Government Finance Officers Association for financial reporting and budget presentation and the disclosure requirements of the Securities and Exchange Commission.

FUND BALANCE POLICY

To ensure financial stability, secure, and maintain investment grade bond ratings this policy is to set a reasonable level of fund balance, establish under what circumstance the Town can go below the policy level, and procedures on how the Town will restore the fund balance.

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