The city has always been fiscally responsible. Currently we are at 83.73% of our General Obligation bond debt capacity.
When we pay the June 1, 2018 principal payment and incorporate the new 1-1-17 FY 18-19 100% valuation starting on July 1, 2018, the City’s debt capacity will decrease to 71.81%. This is below the 80% – 85% city council self-imposed debt limit.
The attached model assumes no new bonding needs using general obligation bonds:
Adel Debt Planning Model 10-10-17-Exhibit 1
For the debt service levy model, we have assumed conservatively that the backfill (state funds) will be eliminated in FY 18-19. So if our taxable valuation increases in FY 19 and the City doesn’t need to sell any new general obligation debt, our model shows that the debt service levy could continue to decline if so desired by the City Council.
As a point of reference our debt service levy has been steadily declining from a high of $3.96 in FY 2007 – 2008 to today’s $2.29 levy, a 42% decrease.
And we are always looking for opportunities to refinance bonds when it makes sense. We did this recently resulting in a gross savings of $169,000 or about $12,000 annually.
I will make sure the city remains fiscally responsible.