03/30/1998 Council Minutes - Laserfiche WebLink

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MINUTES MARCH 30, 1998 presented a schedule indicating how that bond would have been issued. Jerry presented another schedule (Schedule "L") detailing a $1,790,000 General Obligation Improvement Bond. He noted that the City currently has net bonded indebtedness of $8,500,000.Most of this debt is supported by assessments.This leaves the City with a debt to market value of 1 1/2% which is low for a community the size of Lino Lakes. Traditionally, the City has bonded for projects over a short period of time and the bonds were paid back early. The current Moody's rating for Lino Lakes is BAA1 which is very good. Jerry also said that at this time the City is considering doubling its bonded debt. This is still conservative for a city the size of Lino Lakes. Chris asked if the City added six (6) million dollars of bonds for parks, can the City still maintain its current rating. Jerry said yes. The City is looking at over a 10 million dollar increase in its tax capacity rate at about 5%. This will result in a $112.00 a year increase for a property owner whose property is valued at $150,000.00. The net debt of the City would be 2% of its market value and the debt capacity would be 12 1/2 million dollars. Jerry also noted that bonds paid by a source other than taxes or bonds issued by another entity (EDA) do not count. Lease/revenue bonds (Centennial Fire Hall) would count. Bonding for the civic complex will count. He further noted that the City would be building tangible assets which will stimulate growth. The City already has a good track record of growth. Investors and rating agencies do look at this. The City must structure its debt so that it does not put an undo burden on the tax payers. Kim asked if the bond rating is reevaluated each year. Jerry said no, only when the City goes out for a bond sale. He also noted that if the community has not been out for bonds, Springsted does its own review. Kim asked how far can the City go out for bonding. Jerry explained it depends on how the City structures its debt. It was noted that the Charter limits the bonding authority of the City. Jerry explained that if a city has a general obligation debt, it has to be paid regardless of whether or not it is prohibited by the Charter. Chris said if the City tax capacity goes up 5% because of a bond, the reality is that it puts a great burden on tax payers. Kim also noted that Centennial School District is planning to go out for a bond. Chris felt that there is a policyquestion here. Mary said that the Council will have to decide if they want to increase taxes because of the proposed bonds. Jerry said the bonds could be "back loaded" so that the impact would not be so great. The Council must decide if they really want to build what is being proposed and will this construction really generate additional quality development. John said that there are four (4) projects on the list that the City has committed to which equals $3,000,000 to $4,000,000. There are two (2) projects left on the list, the Y and the park needs. Andy said he supported anything that makes the City better. Kim asked if the Council agreed that the Lakes Addition Street Improvement project and the civic complex are committed to? Are the issues to be discussed the Y and the parks referendum? Andy suggested putting off bonding for an athletic complex for one year. He PAGE 6