BUDGET AND FINANCIAL POLICIES (cont)

Although the ultimate responsibility for a departmental budget lies with that Department’s Director, purchases greater than $5,000 require further approvals. Purchases between $5,000 and $100,000 also require approvals from the budget authority, procurement and the Town Manager. Purchases of $100,000 and more also require Town Council approval.

The Town Operations Manual provides complete policy and procedural detail on all expenditures.

Executive Termination Of Approved Spending

The Town Manager may stop a department from spending appropriated funds in the event there is evidence that funds are being misused. The Town Manager must present the reasons for the action to the Town Council within thirty days of the expenditure stoppage.

Debt Management

Short-term Debt/Lease-purchase Agreements

Short-term borrowing or lease-purchase contracts may be considered for financing major operating capital equipment when the Finance Director, along with the Town Manager, determine that this is in the Town’s best financial interest and the Town Council concurs. Lease-purchase decisions should have the approval of the appropriate operating manager.

Long-term Debt

Long-term debt will not be used to finance current operating expenses. When long-term debt is warranted for a project, the payback period for bonds used for the project must not exceed the useful life of the project.

Bond Rating

The Town will attempt to obtain the best possible bond rating and to maintain a favorable rating through prudent financial management and adherence to a policy of full disclosure on financial reports.

Voter Approval of Debt

As required by the Town Charter and State Statute, appropriate elections will be held to obtain voter approval for debt issuance. There is no legal debt limit other than voters’ approval.

The full Debt Management Policy can be found on the Town of Parker website.

Budget Amendments

The Town Charter allows Town Council to make additional appropriations by ordinance during the fiscal year for unanticipated expenditures of the Town. Such appropriations shall not exceed the amount by which actual and anticipated revenues of the year exceed the revenues estimated in the budget, unless the appropriations are necessary to relieve an emergency endangering public peace, health, safety or property.

Requests for budget amendments are submitted to the Finance Director for consideration. If the request is justified and there is offsetting revenue, it is submitted to the Town Manager for approval prior to being placed on a Council agenda. Budget amendments are presented to Town Council at a regular meeting and require two readings prior to adoption.

Debt Service And Financial Obligations

Occasionally, the Town has issued debt as a means of providing the necessary funding to construct major capital projects. When advantageous, the Town has also used long-term financing to fund land and equipment purchases.

The Town has outstanding long-term financial obligations in the form of sales and use tax revenue bonds and certificates of participation. There are no current plans to increase the amount of debt.

Debt Limitations

The Town has no legal debt limit other than voters must approve the creation of multiple-fiscal year debt as required by the Town Charter. Certificates of participation (COP) are a leasepurchase financing method wherein the annual lease payment must be appropriated by Town Council and does not create multiple-fiscal year debt. Therefore, voter approval is not required for COPs.

Outstanding Debt And Financial Obligations

The Town utilizes the General Fund and two Debt Service Funds, the General Debt Service Fund and the Recreation Debt Service Fund, to account for debt and financial obligations. Monies are transferred from the related operational funds to offset the principal and interest payments in the two debt service funds; these funds do not maintain any cash balance.

2015 Sales and Use Tax Refunding Note

In October 2015, a refunding note was issued in the amount of $9,880,000 for the refunding of the 2006 Sales and Use Tax Revenue Bonds used to construct the Parker Fieldhouse and related improvements. The annual debt service payments are accounted for in the Recreation Debt Service Fund, which receives a transfer from the Parks and Recreation Fund. The note will be fully satisfied in 2025. The debt service payment schedule for the outstanding debt is shown in the following table.

Sales and Use Tax Refunding Note

2019 Certificates of Participation

In 2019, the Town refunded all of the Certificates of Participation, Series 2009A with an outstanding aggregate principal amount of $34,190,000 with the proceeds from the sale of Refunding Certificates of Participation, Series 2019 with an aggregate principal amount of $25,215,000. The leased property associated with the Series 2019 COPs is the existing Town police building and the six-acre site upon which it is located.

The annual debt service payments are accounted for in the Interdepartmental Department budget in the General Fund. The debt service payment schedule is shown in the following table.

Certificates of Participation Series 2019

2014 Certificates of Participation

In 2014, the Town issued $19,520,000 in certificates of participation to finance the cost of constructing a Public Works facility and the expansion and renovation of the Town’s existing Recreation Center. The portion of annual debt service payments attributable to the Public Works facility are accounted for in the General Debt Service Fund, which receives a transfer from the General Fund (53%) and Stormwater Utility Fund (13%). The portion of annual debt service payments attributable to the Recreation Center is accounted for in the Recreation Debt Service Fund, which receives a transfer from the Parks and Recreation Fund (34%). The debt service payment schedule for the outstanding debt is shown in the following table.

Certificates of Participation Series 2014

DEBT SERVICE AND FINANCIAL OBLIGATIONS (cont)

Town Credit Ratings

Credit ratings can affect the interest rate (i.e. cost of borrowing). In order to reduce the cost of borrowing, the Town strives to achieve the highest credit rating possible. The Town’s current credit ratings are as follows.

• 2006 Sales and Use Tax Revenue Bonds – AA Standard & Poor’s, Fitch

• 2019 Certificates of Participation – AA Standard & Poor’s

• 2014 Certificates of Participation – AA Standard & Poor’s

Debt Service Fund Summary

The table below summarizes the fund transactions for each of the three outstanding obligations.