Council formalizes debt-management policy, sets 5% target for debt service

Finance staff presented a draft debt-management policy that would set a target of debt service at 5% of the town's operating budget. The finance presentation noted a statutory limit in state law but said the town's proposed internal target is more conservative; the director said, “We had set that as a pretty good goal so that the debt wouldn't be more than 5% of the operating budget.”

Council members said the policy codifies long-standing practice and provides guardrails for future administrations. The council moved, seconded and approved the policy at the meeting. Officials said the policy should help in conversations with bond counsel and protect the town's credit position.