The formulation and administration of municipal debt policy

The evolution of the bonding process has made it become evident that cities will continue to utilize this method of financing to meet their ever-growing responsibilities and in changing fashion which will reflect an expansion of both the volume and purposes for which bonds will be issued.

In view of this change, it also becomes evident that cities should plan their future financing methods as nearly as possible by developing a policy to guide their decisions related to debt incurrence and management. Prudence exercised in the drafting of a municipal debt policy can be Instrumental in avoiding mistakes when decisions regarding the incurrence of additional debt must be made. Therefore, basic tenants set out in such a policy become a valuable management tool and may be paralleled with other accepted management tools such as budgets and planning studies designed to forecast needs and suggested methods '•V *•": of caring for those needs.