The investment policy of the City is guided in large part by State Statute G. S. 159-30, whereby investments in certificates of deposit, repurchase agreements, secured time deposits, bankers' acceptances, commercial paper, United States government and agency securities and the North Carolina Capital Management Trust are made. The deposits of the City are governed by State Statute 159-31.
The City's policy stipulates that investments be fully secured by pledged collateral, delivered securities or United States government guarantee with all securities, including repurchase agreements and pledged collateral, being delivered to a third party safekeeping account in the name of the City.
The legal debt limit imposed by state statute is 8% of assessed value. However, as a matter of internal policy, the City has maintained a debt position far below its legal limit and would consider the range of 2.5% - 3.0% as an appropriate, self-imposed maximum debt range.
Debt service funding resources for the general debt of the City are the general revenues of the City, including property taxes, while the utility debt is funded totally from water and sewer service revenues.
The City issues general obligation bonds supported by property taxes for general purposes and enterprise bonds repaid with water and sewer revenues for utility projects.
The City is bound by a rate covenant to set rates such that the income that is available to pay the debt service requirements on the revenue bonds will not be less than a certain percentage of the debt service requirements.
In addition to general obligation and revenue bonds, the City has entered into various installment financings and various equipment installment purchase agreements.
Typically, general obligation bonds issued by the City are sold through a competitive bid process handled by the North Carolina Local Government Commission. Other bonds or long-term debt issues may be sold through a negotiated sale process.
In either case, the bonds are purchased by a bank or investment firm and then re-marketed (re-sold) to institutional investors and/or to private individuals. Contact a bank or investment firm to find out details of how to purchase the bonds through the secondary market.