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Comparison of Financing Methods General Ohlip,ation Ronde Revenue Bonds * Strong market acceptance * Debt is secured by system users * Significant stmcturingllexibility * Debt limits not applicable * Favorable interest rates * Higher interest costs than GO's * No reserve fund requirement * Debt service reserve required * No trustee required * Trustee required * Voter approval usually required * Voter approval usually not required * Pledge of general credit required * Coverage covenants usually included * Difficult to enter market * Limited revenues available to secure debt • _• : u ; Certificates of Participation * Voter approval usually not required * Voter approval usually not required * Debt limits may not apply * Debt limits not applicable * Debt is secured by beneficiaries * Good market acceptance * Complexity greater than GO's * Complexity o atter thhan 'c * Market concerns about defaults * Risk of citizen opposition * Limited revenues to secure debt * Limited revenues to secure debt * Higher interest costs due to higher risk * Less secure than GO Bond 5. CAPITAL IMPROVEMENT PROGRAM INTEGRATION The City's multi-year Capital Improvement Program(CIP), which identifies the projects and the appropriate funding mechanisms to pay for them, shall be used in combination with the Financial and Budget Policies and this Policy to ensure the proper allocation and financing of eligible projects. The CIP and its related policies set priorities and strategies for allocating and tracking funding, while the Debt Policy provides policy direction and limitations for proposed financings. Debt issuance for capital projects shall not be recommended for City Council approval unless such issuance has been incorporated into the Capital Improvement Program. 6. TERMS AND CONDITIONS OF BONDS The City shall establish all terms and conditions relating to the issuance of bonds, and will control, manage, and invest all bond proceeds. Unless otherwise authorized by the City,the following shall serve as bond requirements. A. Term All capital improvements financed through the issuance of debt will be financed for a period generally not to exceed the average useful life of that which is being financed. At no time will the financing exceed 120%of the expected average useful life of the assets being financed, and in no event should the final maturity exceed the lesser of thirty (30)years or when the revenue source is projected to sunset.