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that a government maintains a sound debt position and that credit quality is protected. Advantages of a debt

policy are as follows:

Enhances the quality of decisions by imposing order and discipline

Promotes consistency and continuity in decision making

Rationalizes the decision-making process

Identifies objectives for staff to implement

Demonstrates a commitment to long-term planning objectives

Regarded as a positive by the rating agencies in reviewing credit quality

It is the policy of the Town Council:

Periodically approve the issuance of Debt Obligations on behalf of the Town to finance the

construction or acquisition of infrastructure & other assets for the purpose of meeting its

governmental obligations to its residents

Approve the issuance of Debt Obligations to refund outstanding debt when indicated by market

conditions or management considerations

Debt obligations are issued & administered in such a manner as to ensure & sustain the long-term

financial integrity of the Town, achieve the highest possible credit rating, preserve & enhance the

quality of life, & the safety & welfare of its citizens

Debt issuance will not be used to finance current operations or normal maintenance.

The Town will strive to maintain its annual tax-supported debt service costs at a level no greater than fifteen

percent (15%) of the governmental expenditures, including installment purchase debt. Payout of aggregate

outstanding tax-supported debt principal shall be no less than 55% repaid in 10 years. The tax-supported debt

of the Town will not exceed two (2%) percent of the assessed valuation of the taxable property of the Town.

Whenever possible, the Town will first attempt to fund capital projects with grants or developer contributions.

The types of debt currently used by the Town of Morrisville include general obligation bonds and installment

purchase agreements. The Town may pursue other methods of financing based upon the direction of the

Town Manager and approval of the Town Council. The Town will only use debt instruments, which are

approved for local government.

The Town will comply with standards of the Government Finance Officers Association for financial reporting

and budget presentation and the disclosure requirements of the Securities and Exchange Commission.

FUND BALANCE POLICY

To ensure financial stability, secure and maintain investment grade bond ratings, set a reasonable level of

fund balance, establish under what circumstance the Town can go below the policy level, and procedures on

how the Town will restore the fund balance.