CC WS PACKET 04122022 - Laserfiche WebLink

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MEMORANDUM To: St. Anthony Village City Council From: Shelly Rueckert, Finance Director and Charlie Yunker, City Manager Date: April 12, 2022 City Council Work Session Request: Future Street Improvement plan / 2023 Debt Levy / Future BACKGROUND The last step of the Peak to Plateau debt plan is the bonding of the 2022 street improvement. The next phase in the debt management was formulated last year at this time. This second phase continues to stabilize the street improvement program’s impact on the annual levy, while also reducing the reliance on debt to fund construction costs The 2022 Street improvements and resulting Debt Levy are consistent with the existing plans. The 2022 Street project includes a street reconstruction, mill and overlays and alleys (see attachment 1 for details). The debt levy for 2023 will not increase, which will be the fourth year in a row of a flat levy (“Plateau”). PHASE II - FIRST STEP In keeping with the Phase II plan Street Improvements and related bonding will be skipped in 2023 and resumed in 2024. Again, the goal associated with Phase II is a modified pace of improvements to reduce reliance on bond financing and transition to levy support for construction cost. The 2023 debt levy modeling has been updated for higher bond interest rates and higher construction costs. The underlying cause of these increases include cost of oil / labor and Interest rate hikes in an effort to control inflation. The impact of these factors slows the transition from debt to levy financing that was modeled last year. The past year experienced greater swings in the economy than what usually occurs annually. It is important to note that Phase II is still on track to make gains in debt reduction and stabilize levy impacts. Also, the plan has the ability to flex to accommodate economic challenges as they present themselves.