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B. Capitalized Interest The nature of the City's revenue stream is such that funds are generally continuously available and the use of capitalized interest should not normally be necessary. However., certain types of financings may require the use of capitalized interest from the issuance date until the City has constructive use/benefit of the financed project. Unless otherwise required., the City will avoid the use of capitalized interest to obviate unnecessarily increasing the bond size. Interest shall not be funded(capitalized)beyond three (3)years or a shorter period when based upon project needs or if further restricted by statute. The City may require that capitalized interest on the initial series of bonds be funded from the proceeds of the bonds. Interest earnings may, at the City's discretion, be applied to extend the term of capitalized interest but in no event beyond 3 years, or less, if restricted by state law. C. Lien Levels Senior and Junior Liens for each revenue source will be utilized in a manner that will maximize the most critical constraint,typically either cost or capacity,thus allowing for the most beneficial use of the revenue source securing the bond. Projects chosen for priority financing, based on funding availability and proposed timing, will generally be subject to the most senior lien of the bond series. D. Maximum Annual Debt Service ("MADS") Concerning revenue bonds,the MADS for any given year must not exceed a level at which the City's net revenues are less than one and a quarter times (1.25x)the total debt service within any year unless allowed by existing bond covenants. E. Additional Bonds Test Any new debt issuance must not cause the City's debt service to exceed the level at which the net revenues are less than one and a quarter times(1.25x)the maximum annual principal and;interest and-(debt service) for the aggregate outstanding senior lien bonds including the debt service for the new issuance unless allowed by existing bond covenants. F. Debt Service Structure Debt issuance shall be planned to achieve relatively rapid repayment of debt while still matching debt service to the useful life of facilities. The City will amortize its debt within each lien to achieve overall level debt service or may utilize more accelerated repayment schedules after giving consideration to bonding capacity constraints. The City shall avoid the use of bullet or balloon maturities except in those instances where these maturities achieve one of the City's stated goals, such as minimizing annual debt service or leveling annual existing debt service, among others. G. Call Provisions In general,the City's securities will include a call feature, which is no later than ten(10) years from the date of delivery of the bonds. The City will avoid the sale of non-callable bonds absent careful evaluation by the City with respect to the value of the call option. If the City were to issue taxable bonds, the City will carefully consider the financial impacts of a 10 year call, a make-whole call, or non-callable debt. H. Maximum Repayment Ratio: The maximum repayment ratio, where total future debt service payments are divided by the principal of the bonds issued, shall be within three to one for each series of bonds and for each authorization.