[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.
