04-98 Debt Policy Statement - Laserfiche WebLink

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· Bond structuring considerations Bond amortization schedules will be structured to minimize interest expense within the constraints of revenues available for debt service. The structure may include features such as serial and term bonds, original issue discounts, premiums and mandatory sinking funds in any configuration that enhances the marketability of the bonds in order to mi~ive the total cost of the financing. The bonds should include call features to maximize the City's ability to advance refund or retire the debt early. However, the call features should be balanced with market conditions to ensure that the total cost of financing is not adversely effected. · Use of variable rate debt The City. will monitor interest rate markets and may use variable rote debt for long-term capital improvements if conditions warrant. · Debt not to exceed useful life of assets The City will not issue debt for any capital improvement for a term that exceeds the useful life of that improvement. · Credit enhancement considerations For each debt issue, the City will analyze the potential economic benefit of utilizing credit enhancement (bond insurance, bank letters of credit, etc.) and will pursue such enhancement provided cost savings are obtainable. Further, the City will only pursue credit enhancement from companies that maintain the highest possible rating by nationally recognized rating agency(ies) for their products. · Use of derivative products The City may use derivative products to reduce interest costs, enhance the efficiency of debt service reserve funds and escrow accounts, or reduce market risk exposures (the City's Long Term Financing Plan provides examples of such transactions). Should derivative products be used, a description of the risks and potential rewards of a derivative product must be provided, in writing, before the structure is selected. Both the Law Director and bond counsel must review the transaction to ensure that the City is authorized to enter into the necessary agreements under all existing statutes and Administration policies. · Method of sale for bonds and notes The City will determine, on an issue by issue basis, the most advantageous method of sale. The City will generally follow the Government Finance Officers Association guidelines for selecting the method of sale (these guidelines'are outlined in the City's Long Term Financing Plan). If the sale is to be competitive, the City may consider engaging a financial advisor to assist with the sale. · Investment of bond proceeds The City will invest bond proceeds according to its general investment of funds policies. City of Lakewood, Ohio - Debt Policies Page 2