SUBSTITUTE ORDINANCE NO. BL2017-726
An ordinance amending Title 5 to add a requirement for the Department of Finance to maintain a written debt management policy for the metropolitan government.
WHEREAS, Article 6 of the Charter of The Metropolitan Government of Nashville and Davidson County (the “Charter”) sets forth the provisions for the adoption of the annual budget and other financial duties, including the requirement that the Metropolitan County Council (the “Council”) shall adopt a balanced budget (Section 6.03) and the Council shall adopt the annual budget not later than June 30 of each year which will become effective on July 1 and in the event the Council fails to adopt a budget it shall be conclusively presumed to have adopted the budget as submitted by the Mayor; and
WHEREAS, the Council as its next order of business after the adoption of
an the operating budget is shall be the adoption of an annual tax on real and personal property and merchants’ ad valorem in the General Services District (GSD) and a School tax, which, together with an annual tax on real and personal property and a merchants’ ad valorem in the Urban Services District (USD) determined by the Council, which (mandatorily shall be adopted by resolution of the Urban Council ), must be that is sufficient together with other anticipated revenues, fund balances, and applicable reserves to equal the total amount appropriate for each of the several funds (Section 6.07); and
WHEREAS, Article 7 of the Charter further provides that there shall be debt service funds for the amortization of general
tax bonds and urban tax bonds respectfully and that the property tax levies shall assure sufficient funds to adequately fund such debt service funds to meet the interest and redemption charges for payment of the bonds redeemed in that fiscal year (Section 7.20); and
WHEREAS, the Council recognizes that the Metropolitan Employee Benefit Board and its polices can impact the fiscal obligations of the Metropolitan Government in connection with pension and other post-employment benefits; and
WHEREAS, the Council recognizes the requirement and the necessity of providing adequate funds annually to timely repay the debt created by the issuance of all bonds, and assuring the maintenance of a good bond rating with the national rating services to benefit from lower interest charges; however, it is mindful that, although the necessary infrastructure needs should be met, basic government services should be first addressed sufficiently and that additional debt
payments authorizations should be limited to an amount that does not unduly burden the taxpayers of Metropolitan Government; and WHEREAS, adherence to a debt management policy signals to national ratings agencies and to capital markets that a government is well managed and is therefore likely to meet its debt obligations in a timely manner; and
WHEREAS, TCA 9-21-151b(1) authorizes the state funding board to develop model finance transaction policies for use by public entities; and the State Funding Board on December 15, 2010, adopted a statement on debt management that reflects four principles for strong financial management in the public sector (1) understand the transaction, (2) explain to citizens what is being considered, (3) avoid conflicts of interest, (4) disclose costs and risks ; and
WHEREAS, the Metropolitan Government originally issued a debt management policy in 2006, revised per Resolution No. RS2011-94, but it was not codified and is in need of updating; and
WHEREAS, on December 6, 2011 the Metropolitan Council adopted Resolution RS2011-94, the Debt Management Policy for the Metropolitan Government of Nashville and Davidson County; and
WHEREAS, it is fitting and proper for the metropolitan government to
adopt maintain a codified, written policy to manage the city's debt obligations.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That Title 5 of the Metropolitan Code be amended by adding Section 5.04.105 as follows:
Section 5.04.105 – Debt management policy required
Section 2. This
resolution Ordinance shall take effect sixty (60) days from and after its adoption, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Sponsored by: Bob Mendes
|Introduced:||May 16, 2017|
|Passed First Reading:||May 16, 2017|
|Referred to:||Budget & Finance Committee|
|Deferred:||June 6, 2017|
|Substitute Introduced:||June 20, 2017|
|Passed Second Reading:||June 20, 2017|
|Passed Third Reading:||July 6, 2017|
|Approved:||July 10, 2017|
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