City of Lawrence, Kansas

Debt Issuance Guidelines

The City of Lawrence adopts the following guidelines for the issuance of debt:

- Ratio of General Obligation Bonds Outstanding to Appraised Valuation will not exceed 2.2%.

- Ratio of General Obligation Bonds and Temporary Notes Outstanding to the Statutory Debt Limit will not exceed 60%.

- Ratio of Debt Service payments from the Bond and Interest Fund will not exceed 15% of governmental expenditures.

- Amount of General Obligation Bonds Outstanding per Population will not exceed $1100.

- Amount of overlapping General Obligation Bonds Outstanding per Population will not exceed $2500.

- Bond and Interest mill levy will not exceed 10 mills.

The City will review and consider the following before any debt is issued:

- Adherence to the Capital Improvement Budget

- Adherence to the Capital Improvement Plan

- Impact on the mill levy

- Potential impact on other revenue sources such as increased property taxes and sales taxes.

CURRENT RATIOS (6/1/02)

- General Obligation Bonds/Appraised Valuation

o $71,745,000/$4,009,270,000 = 1.8% (Moody’s 2.2 > avg.)

- General Obligation Bonds and Notes/Statutory Debt Limit

o $84,975,000/$198,255,962 = 42.9% (State calculated limit)

- Debt Service payments/Governmental Expenditures

o $5,864,299/$51,370,000 = 11.4% (S & P 15-20% considered high)

- General Obligation Bonds/Population

o $71,745,000/83,495 = $859 (Lawrence has been under $1000)

- Overlapping General Obligation Bonds/Population

o $150,353,105/83,495 = $1801 (Includes school district and county)

- Debt Service Levy

o 2001 Debt Service Levy = 7.134 mills (likely to increase to over 8.0)