What should local governments regularly review to ensure effective debt management?

Regularly reviewing the debt management policy is essential for local governments to ensure effective debt management. A well-crafted debt management policy outlines the framework for how a municipality engages with its debt, including guidelines for issuing new debt, refinancing existing debt, and managing debt service. This comprehensive policy helps in establishing clear objectives for borrowing, sets limits on debt levels, and mandates regular monitoring and reporting to maintain fiscal stability.

Through the review of the debt management policy, local governments can assess their current borrowing practices, align their goals with changes in the economic environment, and ensure compliance with regulations and best practices. By doing this, they can mitigate risks associated with debt, enhance credit ratings, and effectively manage cash flows to meet obligations.

The other options, while they relate to financial management, do not focus specifically on the core requirements for managing debt effectively. Reviewing investment portfolios, public service delivery methods, and revenue generation strategies contributes to overall financial health but does not directly address how debt is structured, maintained, and evaluated.