The State Funding Board established a set of guiding principles for debt management policies for local governments last year:
* Debt transactions should be clearly understood by those involved in making the decisions about them.
* Citizens should be able to get clear explanations about these transactions.
* Steps should be taken to avoid conflicts of interest among the parties involved in the transactions.
* Costs and risks associated with the transactions should be clearly disclosed.
Source: Tennessee Comptroller Office
CLEVELAND, Tenn. - Bradley County adopted a state-required debt management policy Tuesday evening.
The Bradley County Commission voted 9-1 to approve measures that are intended to set parameters and increase transparency regarding the county's issuance and management of debt.
"We already do a lot of these things in Bradley County, but the state of Tennessee has put some requirements in, and our document does meet all the state's requirements," said Commissioner Connie Wilson, chairwoman of the finance committee.
Commissioner Cliff Eason made the only opposing vote, but said it was because he had not obtained a copy of the document prior to the commission's Tuesday meeting.
Commission Chairman Louie Alford and Commissioners Adam Lowe, Brian Smith and Jeff Yarber were absent.
Bradley County Mayor D. Gary Davis said the "feel-good" aspect of the "very wordy" 16-page document is that the commission could make changes in the future.
Wilson said she thought the most important highlights of the policy involved conflicts of interest and variable rate debt.
The approved policy states that the county's variable rate debt "shall not exceed 45 percent of the county's total outstanding debt." The county already sticks close to a 40 percent variable rate debt ceiling, said county Finance Director Lynn Burns.
In regard to conflicts of interest, Wilson explained that meant that any of the county's financial advisers must disclose if they might also want to serve as a creditor to the county.
The new debt management policy was not created in response to any current funding issues the county faces, but due to a state requirement that all local governments adopt a policy that meets the state standards, according to Wilson.
"We have been working on this project for about a year," said Burns.
Wilson said the finance committee has been wrestling with the document for the last six weeks with an eye toward the state's Dec. 31 deadline.
Paul Leach is based in Cleveland. Email him at email@example.com.