PROPOSED DEBT MANAGEMENT POLICY
BY: PAT HUNTER
The Loudon County Budget Committee will meet at 6:00 PM on Monday, October 24th to discuss a draft debt management policy for the county. The County is issuing $43 Million in bonds to finance the school building plan, and the County Mayor was only authorized to sell $10 Million in bonds until a debt management policy is formulated and adopted by Loudon County Commission.
The committee is comprised of Budget Chair Mayor Estelle Herron and Commissioners Don Miller, Bob Franke, Austin Shaver, and Sharon Yarbrough. The Budget Committee will discuss a draft debt management policy, which includes a debt policy formulated by Mayor Herron, Tracy Blair Director of Accounts and Budget, and Joe Ayres of Morgan Keegan. The committee will make a recommendation to the full commission for adoption.
The State Funding Board adopted guidelines and principles that a debt management policy should include:
Debt transactions should be clearly understood by those involved in making the decisions about them.
Citizens should be able to get clear explanations about the transactions.
Steps should be taken to avoid conflicts of interest among the parties involved in the transactions.
Costs and risks association with the transactions should be clearly disclosed.
Counties and cities and other industrial development boards, utility districts and quasi-governmental agencies who issue debt must follow the new rules, and a policy must be adopted by December 31, 2011. "The standards were created last year to address problems some local governments and agencies ran into as a result of complicated deals officials struck on bonds and exotic financial instruments, conditions of which some entities didnít fully understand." When the financial bubble burst, Loudon County was caught in a financial predicament with its $12.5 Million Swap Derivative.
APRIL 7, 2009-
See below to read other proposed debt management policies for comparison, in pdf format (downloading time may vary based on your internet service). NOTE: Adobe Reader is needed to open the "pdf" documents. To download a free copy go to http://get.adobe.com/reader/
CLICK SEPTEMBER 1, 2011 MEMO FROM COMPTROLLER JUSTIN WILSON LETTER PDF