HomeMy WebLinkAboutDebt ManagementSouthold Town Board - Letter Board Meeting of February 24, 2009
RESOLUTION 2009-195
ADOPTED
Item # 4.40
DOC ID: 4809
THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO. 2009-195 WAS
ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON
FEBRUARY 24, 2009:
Resolved that the Town Board of the Town of Southold hereby adopts the following policy
entitled:
TOWN OF SOUTHOLD, NEW YORK
DEBT MANAGEMENT POLICY
Int~roduction
The following policy is enacted in an effort to standardize and rationalize the issuance and
management of debt by the Town of Southold, New York (the Town). The primary objective is
to establish conditions for the use of debt and to create procedures and policies that minimize the
Town's debt service and issuance costs, retain the highest practical credit rating, and maintain
full and complete financial disclosure and reporting. The policies apply to all general obligation
debt issued by the Town, debt guaranteed by the Town, and any other forms of obligation of
indebtedness.
Regular, updated debt poli{~ies can be an important tool to insure the use of the Town's resources
to meet its commitments to provide needed services to the citizens of the Town and to maintain
sound financial management practices. Thsse policies are therefore guidelines for general use,
and allow for exceptions in extraordinary conditions.
The Town Board has adopted these policies by resolution. As one function of these policies is to
stimulate discussion and broader appreciation of debt issues, these policies will serve as a
guideline. Under the recommendation of the Town's Financial Advisor, the Town will evaluate
~ts experience under these policies, and will make changes if needed The Debt Management
Policies of the Town can be adjusted at any time by resolution of the Town Board.
Creditworthiness Obiectives
Policy 1. Credit Rating: The Town seeks to maintain the highest possible credit ratings for till
categories of short-and long-term General Obligation debt that can be achieved without
compromising delivery of basic Town services and achievement of adopted Town policy
objectives.
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Southold Town Board - Letter Board Meeting of February 24, 2009
The Town recognizes that extemal economic, natural, or other events may from time to time
affect the creditworthiness of its debt. The Town Board remains committed to ensuring the
actions within their control are prudent and beneficial to its citizens.
Policy 2. Financial Disclosure: The Town is committed to full and complete financial
disclosure, and to cooperating fully with rating agencies, institutional and individual investors,
Town departments and agencies, other levels of government, and the general public to share
clear, comprehensible and accurate financial information. The Town is committed to meeting
secondary disclosure requirements on a timely and comprehensive basi~.
Policy 3. Capital Planning: To enhance creditworthiness and prudent financial management,
the Town is committed to systematic capital planning, intergovernmental cooperation and
coordination, and long-term financial planning. Evidence of this commitment to systematic
capital planning is demonstrated through adoption of a three-year Comprehensive Capital
Budget.
Purposes and Uses of Debt
Policy 4. Debt Limits: The Town will keep outstanding debt Within the limits prescribed by
State statute and at levels consistent with its creditworthiness objectives.
Policy 5. Capital Financing: The Town normally will rely on internally generated funds and/or
grants and contributions from other governments to finance its capital needs. Debt will be issued
for a capital project only when other funding is not available or sufficient.
Policy 6. Asset Life: Town debt will not be issued for periods exceeding the~ useful life or
average useful lives of the project or projects to be financed, as recommended by its Bond
Counsel and Financial Advisor.
Debt Standards and Structure
Policy 7. Length of Debt: Debt will be structured for the shortest period consistent with a fair
allocation of costs to current and future beneficiaries of users.
Policy 8. Debt Structure: Debt will be structured to achieve the lowest possible net cost to the
Town given market conditions, the urgency of the capital project, and the nature and type of
security provided. Moreover, to the extent possible, the Town will design the repayment of its
overall debt so as to recapture rapidly its credit for future use.
Policy 9. BANs: Use of short-term borrowing, such as bond anticipation notes (BANs) will be
undertaken only if the transaction costs plus interest of the debt are less than the cost of internal
financing, or available cash is insufficient to meet working capital requirements.
Debt Administration and Process
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Southold Town Board - Letter Board Meeting of February 24, 2009
The following policies apply to all Town debt issuance, including all General Obligation debt as
specifically noted.
Policy 10. Investment of Bond Proceeds: All general obligation bonds proceeds shall be
invested as part of thc Town's Capital Fund, as noted by thc Town's investment policies.
Policy 11. Competitive Sale: In general, Town debt will be issued through a competitive
bidding process. The Town shall retain the services of a Financial Advisor to administer the
competitive bidding process for serial bonds.
Policy 12. Property Tax Supported Debt Service Thresholds: In order to maintain
appropriate budgetary controls and to prevent imposing excessive burden on taxpayers of the
Town, it is the intention of the Town Board to limit debt service expenditures supported by local
real property taxes to no more than 12% of aggregate budgetary appropriations in the Town's
General Fund in any given year.
Elizabeth A. Neville
Southold Town Clerk
RESULT: ADOPTED [UNANIMOUS]
MOVER: Albert Krupski .Ir., Councilman
SECONDER: Thomas H. WJckham, Councilman
AYES: Rulanc], Orlando, Krupski .lt., Wickham, Evans, Russell
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