BRENHAM CITY COUNCIL APPROVES DEBT MANAGEMENT POLICY
The Brenham City Council has adopted a debt management policy.
The council at its meeting Thursday approved adoption of the policy, which outlines what is allowed or prohibited regarding debt issuance practices for state and local governments.
Finance Director Carolyn Miller said adhering to a debt management policy signals to rating agencies and capital markets that a government is well managed. She said this policy formalizes some of the city’s current practices concerning items like debt limits; debt structuring, issuance, and management practices; and the use of derivatives.
Miller said the policy could potentially bring more items before voters for approval.
According to the policy, the total tax-supported debt payment of the city will not go over 17.5 percent of non-capital expenses for governmental funds.
The policy also says the term of debt “shall not exceed the useful life of the capital asset being financed, and in no case shall exceed 25 years”. The average weighted life of each general obligation bond series will be kept at or below 12.5 years.
The city council will not be able to authorize any long-term financing without review from the city’s audit committee.