title
Consideration of recommendation by Finance Director for approval of 2024 General Obligation Notes and State Trust Fund Loan
body
Submitted by:
John Ruggini
Department:
Finance Director
A. Issue
As part of the 2024-2028 Capital Improvement Plan, bond proceeds are required to fund approved capital projects. As a result, it is necessary to authorize the issuance of these general obligation and water revenue bonds. It is important to consider the impact of these bonds on the City's total debt capacity, tax and utility rates. In addition, since 2023 the City has borrowed short-term from State Trust Fund to approximate cash financing of capital due to levy limts. Approval of this is also included.
B. Background/Options
Capital Budget
The 2024-2028 Capital Improvement Budget included $22.3 million in general obligation bond and note proceeds for approved projects as shown in Figure 1. The total amount to be borrowed is $17.4 million. This is a not-to-exceed amount although we don't anticipate the amount to change.
Levy-backed bonds are $1.9 million less than budgeted due largely to better than budgeted contract results for the Potter Road and 109th Street Improvements. Savings from the North Avenue from 73rd to 95th project also contributed to the reduction. Sanitary is $543,522 below budget also largely due to Potter Road contract savings. The Storm borrowing is less than budgeted due to the Honey Creek Storm Sewer Outfall project (4103) being delayed as well as savings from the Potter Road contract. There is no borrowing for TIF projects this year. The Water Utility bond issuance will be approximately $100,000 great than original budgeted amount as costs for the 1024 paving program were higher than expected.
The bond amortization schedules have been adjusted so that the same impact on the 2025 Budget is maintained and sufficient funds are included in the 2025 Budget to cover the debt service associated with this bond offering. Due to ...
Click here for full text