[HISTORY: Adopted by the Mayor and Council of the Town of Rock Hall 9-28-2009 by Res. No. 2009-04. Amendments noted where applicable.]
The Town of Rock Hall, Maryland (the Town) will limit its long-term borrowing to capital improvements or projects that cannot be financed on a pay-as-you-go basis within a reasonable period of time from current revenues.
The Town will not use long-term debt to fund current operating costs, except to the extent the Town issues long-term debt to fund pension fund costs or the costs of other post-employment benefits, provided that issuing long-term debt for such purposes has become acceptable in the municipal marketplace.
Capital projects financed through the issuance of bonds shall not be financed for longer than the expected useful life of the project.
Interest, operating and maintenance expenses will be capitalized only for enterprise or utility fund facilities and will be strictly limited to those expenses incurred prior to actual operation of the facilities.
The Town will make its best effort to keep the average maturity of general obligation bonds at or below 40 years.
Enterprise or utility fund-related debt service will be self-liquidating or supported by the revenues of the utility itself, except to the extent a purchaser of the related debt, such as the Maryland Water Quality Financing Administration, the U.S. Department of Agriculture (acting through any department, division or agency thereof, including, without limitation, Rural Development or Rural Utilities Service) or a financial institution requires the Town to pledge its full faith and credit and unlimited taxing power to the payment of such debt.
The Town will avoid the use of short-term tax anticipation or other short-term debt for non-capital purposes pursuant to § 722 of the Town Charter except when necessitated by cash flow or other emergency situations. Continual rollover of short-term debt without principal pay down will be avoided.
The Town will consider the issuance of conduit financing if requested. Conduit financing are securities issued by a government agency to finance a project of a third party, such as a non-profit organization or other private entity. If issued, the Town may sponsor conduit financings for those activities (e.g., economic development, housing, volunteer fire departments) that have a general public purpose and are consistent with the Town's overall service and policy objectives. Unless a compelling public policy rationale exists, such conduit financings will not in any way pledge the Town's faith and credit.
The Town will maintain good communications with the bond rating agencies about its financial condition and will follow a policy of full and open disclosure on every financial report and bond prospectus.
The Town shall incur and manage debt in accordance with federal, state and local law and this debt policy. To the extent any such federal, state or local law shall come into conflict with this debt policy, such federal, state or local law shall be deemed to control.