Financial Policies - Debt Management

10.01

The County will not use long-term debt for current operations by Article XI, Section 7 and Article VIII, Section 9, of the Constitution and by the Local Government Code of the Revised Statutes of Texas.

10.02

When Dallas County finds it necessary to issue bonds, the following policy will be adhered to:

a) Average weighted general obligation bond maturities will be kept at ten and one-half (10½) years.

b) Issues will be scheduled so that an equal principal amount is retired each year over the life of the issue to produce a complete debt schedule with a yearly declining balance.

c) Debt service for all funds in any year will not exceed 25% (twenty-five percent) of the total annual operating budget.

d) Total bonded debt will not exceed 1% (one percent) of the net valuation of taxable property in Dallas County based on 100% (one hundred percent) of the net appraised valuation.

e) Reserve funds will be provided to adequately meet debt service requirements in the subsequent year.

f) Interest earning on these reserve fund balances will be used for debt services.

g) Bond finance will be confined to capital improvement projects which could not feasibly be financed from current revenues.

h) The term of any bond issue will not exceed the useful life of the capital project/faculty or equipment for which the borrowing is intended.

10.03

The County will issue Certificates of Obligation (C.O.s) only in very modest amounts and only for projects, which meet well-defined criteria, as follows:a) C.O. s will be issued with a term not to exceed ten years.b) The term of each issue of C.O.s will not exceed the dollar-weighted average helpful life in the projects and equipment to be purchased with the proceeds.c) Total C.O. debt issued in each fiscal year shall be limited to the greater of 5% of total debt projected to be outstanding at the end of the current fiscal year or the amount of C.O. debt scheduled to be retired during the current fiscal year.

d) C.O. debt, which has a revenue source other than ad valorem taxation sufficient to pay its debt service, is not subject to the above limitation.

10.04

Bond program planning efforts and market timing will be coordinated with overlapping jurisdictions supporting these policies.

10.05

The County Treasurer shall be responsible for the handling and payment of all bonded indebtedness of Dallas County and shall serve as Paying Agent/Registrar for Dallas County bond and certificate Arbitrage Rebate Service, by Court Order #87-2033.

10.06

Dallas County officials shall operate by Court Order #88-021 for all functions related to the issuance of Dallas County bonds and certificates.