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Financial Management for Elected Officials January 2013 <br /> <br />Institute for Local Government www.ca-ilg.org 18 <br /> <br /> <br /> <br />o If an agency has such a plan, what does the plan not include? For example, does it <br />assume that new development will bear the costs of capital improvements necessitated by <br />that development? If so, the plan should so state. <br />o Does the multi-year capital improvement plan include specific information about how future maintenance costs will be paid for? It’s not wise to build an asset the agency cannot afford to maintain. <br />• Does the agency have clear capital financing and debt management policies? Who is responsible for implementing and monitoring compliance with these policies? <br />o Do these policies provide decision criteria for when incurring debt is appropriate? <br />o Do these policies address what type of debt financing is appropriate (for example, a) variable versus fixed rates, and b) are interest rate swap agreements allowable and under what circumstances?) <br />o Do these policies address protection of credit quality? <br />o Do these policies address debt capacity? <br /> <br />o Do these policies address costs/benefits of risk examinations for proposed debt? <br />o Do these policies address who is on the agency’s financing team and how consultants like bond counsel, financial advisors, trustees, assessment engineers and underwriters are selected? Are the selection criteria being followed? <br />o Do these policies address disclosure to and relations with debt rating agencies? <br />o Do these policies address who is responsible for conformance with bond covenants (obligations the agency agrees to as part of bond financing) on an ongoing basis? <br />• Does the agency have a debt advisory committee? If so, does the membership of the committee include representatives from the local community? <br />Page 68 of 109