Justin P. Wilson, Tennessee ComptrollerNASHVILLE - Tennessee Comptroller Justin Wilson is reminding city and county governments and other public entities that they face a Dec. 31 deadline to implement debt-management policies that follow guidelines adopted by the State Funding Board.
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 didn't fully understand.
The Funding Board's policies are intended to give local governments "discretion" in crafting their debt management policies but require four principles be followed in order to protect tax or rate payers.
Those principles are:
- 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.
In addition to cities and counties, other public entities that issue debt that must follow the new rules include industrial development boards, utility districts and quasi-governmental agencies.