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Littleton council adopts debt policy limiting annual debt service to 10% of revenues; $32.8M COPs noted
Summary
The Littleton City Council unanimously adopted a revised debt management policy that caps annual debt service at 10% of governmental revenues and raises enterprise fund coverage to 1.2x; staff reported a $32.8 million COPs issuance and an S&P AA+ rating.
The Littleton City Council unanimously approved Resolution 41-2026 on July 21, adopting a revised debt management policy that lowers the city's planned annual debt-service cap from 15% to 10% of governmental revenues and raises the enterprise-fund debt-service coverage requirement from 1.0 times to 1.2 times.
Finance Director Lori Mata told the council the changes reflect direction provided at a prior study session and are designed to codify clear protocols and guardrails for future capital financing. "We reduced the amount from 15% down to 10% of governmental revenues that could be issued in debt," Mata said, summarizing the principal edits to the draft policy.
Mata said the city had taken advantage of strong market conditions that morning, reporting $32,800,000 in certificates of participation (COPs) that staff had taken to market. She also said Standard & Poor's assigned the city an AA+ rating, which she described as near the top of the scale and reflective of the city's financial strength.
The policy clarifies the types of borrowing the city may use, describes the circumstances for issuing debt versus pay-as-you-go funding, and references charter and internal limits. Mata summarized charter-based limits that staff cited in the presentation: a 3.7% assessed-value threshold for general-obligation-authorized borrowing (which she said equates to approximately $48,600,000 under current assessed value) and a 5% assessed-value cap for revenue bonds. She also described an internal guideline limiting the use of COP proceeds to one-third of the capital-improvement sales-tax fund's revenue for annual debt-service payments.
Council members asked no technical questions during the meeting; Council member Zink moved to approve the resolution and the motion passed unanimously with a vote recorded as 5 in favor. City Manager Dimitra said staff will perform an annual debt-service analysis and present a debt-service review as part of the budget process and for any new debt issuance.
The policy now provides formal guidance for future projects the city expects to finance, including previously approved uses of COP proceeds for the Main Street project and staff-discussed uses such as a service center and potential town-hall arts center.
