Title
Order: That the city adopt a policy limiting debt service
Body
Ordered: That the City adopt a policy limiting debt service as follows:
1. In any fiscal year, the sum of principal and interest payments on debt service shall be limited to 3.5% of the operating budget;
2. The following shall be excluded from the calculation of debt service payments:
- Debt payments made through the water/sewer enterprise fund;
- Debt reimbursed through a federal or state programs;
- Debt subsidized by any third party payment agreement;
- Debt specifically authorized by a Proposition 2 ½ override;
- Debt related to the current relocation of city hall and the police station.
3. Any net Bond Premium Payments received as a result of a bond issuance shall be placed in a reserve for future debt service and shall be amortized over the life of the bond for which the premium was received.
For purposes of implementation of this policy, no additional borrowing shall be authorized until debt payments have been reduced to the level contained in these guidelines.