FY 2017 Budget Highlights

VII. Debt Management Policies VIII. A. The County will at all times manage its debt and sustain its strong financial position, including healthy reserves, to seek and maintain the highest credit rating possible. B. Federal income tax law applicable to the issuance of tax-exempt debt generally limits the portion of the proceeds of such debt that may be loaned to or otherwise used by a private trade or business (a "private business use") to 10% of such proceeds (the "bad money allowance"). On occasion the County may have reason and justification to take advantage of the bad money allowance and include funding for a private business use within a tax- exempt debt issue. The tax certificate executed by the County in connection with each issuance of tax-exempt debt should discuss any expected uses of proceeds for private business uses. C. The County may seek credit enhancements such as letters of credit or insurance when necessary for marketing purposes or cost effectiveness. D. The County will consider utilizing debt service reserve funds for certain debt issuances if advantageous to the County for marketing or cost mitigation purposes. E. The County will monitor compliance with bond covenants as applicable. Bond covenants are generally related to Revenue Bonds or special obligation debt. F. Promptly after the passage of each Capital Budget, the Director of Finance will file a "Declaration of Official Intent to Reimburse." This provides the County with the right to reimburse itself from future General Obligation Debt issues for capital costs advanced prior to the issuance of the debt. These reimbursement rights are subject to rules promulgated by the Internal Revenue Service. Financing Mechanisms A. The County pledges its full faith and credit to repayment of all General Obligation Debt. Accordingly, paying principal and interest on General Obligation Debt is the absolute first claim on County resources. B. In addition to its general income and property tax resources the County may allocate portions of certain revenue sources to the repayment of its General Obligation Debt, to include: 1. Recordation taxes 2. Impact fees 3. Bond Premium 4. Hotel Rental taxes 5. Enterprise Fund fees C. The County will consider various financing techniques, including fixed or variable interest rate debt, to minimize the interest costs over the life of the issue. These techniques will be evaluated based on market conditions and risk. D. Use of Derivatives/Swaps I. A derivative is an instrument that receives its value from or gets its value from another instrument, asset, index or event. While not specifically excluded, derivatives must be carefully used because the volatility of interest rates can greatly affect the value of derivatives. County policy is to refrain from using derivatives. Any expanded use of derivatives would require a revision to the County's current policy. This policy is not intended to preclude the investment by the County in 5

View entire presentation