CCR2001117COMMON COUNCIL - CITY OF MUSKEG0
RESOLUTION #I 17-2001
APPROVAL OF CITY OF MUSKEG0 DEBT POLICY
WHEREAS, The Committee of the Whole has participated in numerous budget
workshops with Finance Director Dawn Gunderson and Financial Consultant Dave
Anderson of Ehlers and Associates; and
WHEREAS, The attached Debt Policy has been reviewed and recommended for
approval by the Committee of the Whole;
NOW, THEREFORE, BE IT RESOLVED that the Common Council of the City of
Muskego, upon the recommendation of the Committee of the Whole, does hereby
approve the Debt Policy as attached.
DATED THIS 12th DAY OF June ,2001
SPONSORED BY:
COMMllTEE OF THE WHOLE
Ald. Mark Slocomb
Ald. Patrick Patterson
Ald. William Le Doux
Ald. Chuck Wichgers
Ald. Nancy Salentine
Ald. Rick Petfalski
Ald. David Sanders
This is to certify that this is a true and accurate copy of Resolution #117-2001 which
was adopted by the Common Council of the City of Muskego.
City of Muskego Finance Department
General Policies and Procedures
The Government Finance Officer's Association has repeatedly encouraged
municipalities to develop 'Torrnal debt policies as they are essential to effective
financial management"
Establishment of policies governing issuance of debt improves the quality of
decisions, provides justification for the structure of debt, identifies policy goals and
demonstrates a commitment to long-term financial planning.
0 1 BOND RATING
The City should continue to strive to retain and improve its rating which is
currently Aa3.
2. TAX BASE EXPANSION AND DISTRIBUTION
The City should strive to diversrfy its tax base through residential, commercial and
industrial development as outlined in the City's 2010 Comprehensive Plan.
3. USE OF DEBT
A. Use of the City's borrowing authority should be balanced between ongoing
infrastructure maintenance and replacement and expenditures which would
provide for tax base expansion and economic development.
B. The City will not use long-term debt to finance any current operations.
C. Debt should not be used for items of a recurring nature. Equipment with a life
expectancy of less than 10 years should be funded from cash and cash
reserves allocated for same.
D. Debt should be structured to reflect the useful life of items being financed.
City of Muskego Finance Department
General Policies and Procedures
Debt Policy
E. Utility projects should be funded using Revenue Debt vs. G.O. Debt thereby
assuring that the items being financed will be paid for by users and the G.O.
Debt capacity will be preserved.
F The City will pay for debt service (principal and interest) from current revenue
sources.
4. DEBT LOAD LIMITATIONS
A. Total use of General Obligation debt shall generally be limited to not more
than 3% of the City's equalized valuation.
B. General Obligation debt per capita shall generally not exceed $1,800 (an
amount equal to approximately 3% of the City's equalized valuation). The
City's G.O. debt per capita is currently $684.
C. The equalized tax rate for debt shall not exceed $1.25 to $1.50 per $1,000 of
valuation in any year
5. FUND BALANCE
A. The City shall seek to achieve and maintain a minimum general fund balance
of between 20% and 25% of annual operating revenues at all times. The
undersigned fund balance as reported in the 1999 City audit was 28%.
6. NON-LEVY REVENUES AVAILABLE FOR DEBT
A. The city will seek to match non-levy revenues to debt payments where
available in order to minimize the need for a general tax levy subsidy of
enterprise or special revenue fund activities. Where such revenues are not
available, prior to borrowing funds for such putposes, the City will identify the
impact to the general tax levy, then approve such subsidy as a matter of
policy.
6. The City will annually monitor the performance of its TIF districts and will seek
to coordinate the debt structure for TIF with projected revenues.
SPolicies and Procedures\Finance\DebtPolicy