HomeMy WebLinkAbout6. A. Debt Levies and Debt Obligation P9wNbMfiL&- General Business 6. A.
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SHAK01"EE,
TO: Mayor and City Council
Mark McNeill,City Administrator
FROM: Lori Hensen,Deputy City Clerk
DATE: 10/23/2013
SUBJECT: Debt Levies and Debt Obligation(F)
Action Sought
Attachments: debt service
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2014 Budget Discussion
October 23rd, 2013 Worksession
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Debt Levies and Debt Obligations
The initial preliminary 2014 budget provides for two(2)debt service levies as follows:
• Debt Service Levy for 2006A issue,for the 2014 principal and interest amounts-$343,959
• Debt Service Levy for 2004B issue,for the voter approved levy-fire building $ 175,000 I
The total of the final debt service levies for 2014 is$518,959.
The 2013 final levy for debt service(voter approved fire building) was$150,000, is requested to be
increased$25,000 for the 2004B debt,for a total levy in 2014 of$175,000. 3
The addition of the 2006A debt is requested as a distinct and separate debt levy,and was not included
in the final 2013 levy total. It has been several years since the City has fully levied for all of the debt
levies,as detailed on the attached table.The City has been fortunate to tap into the special assessment
payments and prepayments,interest earnings,cash position and fund transfers to pay each outstanding
debt service,without requiring a separate levy for each issue.Staff and Council have had several
discussions on this issue,and it is the recommendation of staff to initiate these specific levies, beginning
with the 2014 budget year and beyond.
The 2013 requested levy was reduced by Council action at the adoption of the final levy. it eliminated
an increased levy for the Fire building as well as a proposed levy for the 2006A debt in order to fund a
portion of the annual debt obligation of$344,283. Lengthy Council discussion was held on the ability of
the property tax payers to absorb a higher levy, in a year that continued to experience declining values. !
The 2014 proposed levy is presented with a request for increased debt service levies, due to the
increased market value indicators that Scott County has presented with the most recent updates to
"what if" work papers.The Scott County estimates are providing for an overall growth in the market
from the 2013 values of over 4.8%.This increased growth could provide a portion of the coverage for
the increased new levies,with only limited impact on the property tax payer.
As indicated on the attached table,the City will see the maturity of the 2004C debt in 2015,which will i
remove this levy from future needs.
The 20048 debt, refinancing bond for the construction of the 1997 fire station,will mature in 2017,
eliminating the need for this specific levy in years past 2015.
The 2006A and 2007A debt service will both expire in 2017,which will reduce two more issuances from
the future levy needs. However,this does leave the remaining issues with the need for a levy. Council
will be asked to consider the certification of debt service levies during the December budget discussion.
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