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After review and discussion, the Finance Committee approved staff's recommendation to <br />present the policy to the City Council. <br />Staff believes that having a Council approved debt policy will improve rating agencies' <br />opinion of the City without restricting the flexibility the Council needs when desiring to avail <br />itself of debt financing. <br />Alternative <br />The City Council may direct staff to amend this proposed policy or elect not to adopt a debt <br />policy. While deciding not to adopt a debt policy would not necessarily pose significant <br />problems for the City, it would nonetheless not be looked upon favorably by the credit <br />rating agencies. <br />Fiscal Impact <br />The exact fiscal impact of adopting this proposed policy is very difficult to determine. In the <br />past, the City has obtained high quality ratings for its debt, which has resulted in favorable <br />borrowing costs. Adopting this policy should likely not result in the lowering of the City's <br />credit rating. Staff, however, cannot promise that adopting this policy will improve the <br />City's credit rating and concomitantly reduce borrowing costs. <br />Bri n Ponty <br />Director of Finance and <br />Financial Planning <br />~ `_ ~ r <br />~ ; t ~~ <br />:.... <br />%% , % ' 7x, <br />~ ~~'~ <br />r/ <br />~ ~ •~~1 4JY//,. <br />/ ~ F <br />Edward Everett <br />City Manager/ <br />Public Financing Authority <br />Executive Director <br />Attachment <br />Proposed Debt Management Policy <br />6.1 B <br />Page 2 <br /> <br />Peter Ingram <br />Redevelopment Agency <br />Executive Director <br />S:ICounci! Staff Reportsl0therlDebt Policy3-26-07.doc <br />