Agenda - 05-09-2017 - 2.2 Debt Management Policy

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April 5, 2011 Level of Debt 12.The County will maintain its net bonded debt at a level not to exceed three percent of the assessed valuation of taxable property within the County. 13.The County will strive to maintain its annual debt service costs at a level no greater than fifteen percent of general fund revenues, including installment purchase debt. This is a recommended "best practice" from the Government Finance Officers Association. Advance Refunding of Debt 14.The County will make every effort to issue advance refunding bonds to achieve cost savings of at least 3% percent net of the refunding bonds. Net savings includes gross savings less issuance costs and any cash contributions to the refunding. The 3% savings is the minimum savings permissible before the North Carolina Local Government Commission will consider advance refunding bonds. These decisions will be based upon the maturity date of the refunded bonds, the call date and premium on the refunded bonds and the interest rates at which the refunding bonds can be issued. Undesignated Fund Balance 15.The County will strive to maintain an undesignated balance in the general fund of 17% percent of budgeted general fund operating expenditures each fiscal year. The amount of undesignated fund balance maintained during each fiscal year should not fall below 8% percent of budgeted general fund operating expenditures as recommended by the North Carolina Local Government Commission. 16.To the extent that general fund undesignated fund balance exceeds 17% percent the balances may be utilized to fund capital expenditures or pay down outstanding County debt. Investment of Capital Funds 17. Investment of capital funds will be performed in accordance with the North Carolina General Statutes (159-30). Funds will be invested in instruments that will provide the liquidity required to meet the cash flow needs of each project funded.