2010.06.07 RESO 2010-0022 - Laserfiche WebLink

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City Debt and Overlapping Debt In preparing this Capital Improvement Plan amendment, the City has considered for each project, and the plan as a whole, several factors, including the level of overlapping debt of the City. Included as a part of the complete capital improvement plan, the City has evaluated all of its existing debt, including the repayment sources utilized for all existing debt. Debt Service Limit & New Bond Authority The maximum amount which can be levied on all of the City's CIP bonds is limited by the following formula: Payable 2010 Taxable Market Value $1,411,069,200 Times .16% .0016 CIP legal lending limit $ 2.257.711 Less existing CIP Bond P&I (maximum) (227,118) Amount available for P&I on new CIP Bonds $ 2.030.593 The City presently proposes to issue up to $1,450,000 in G.O. Capital Improvement Plan bonds. Assuming these bonds are paid over approximately 8 years at current market interest rates, the maximum combined annual principal and interest payment for this issue is estimated to be $242,370. Please review Exhibit 1 for a breakdown of estimated payments. When combined with the existing CIP maximum principal and interest payment, this is below the statutory limit. The City reserves the right to vary the term of any borrowing identified in this plan with the understanding that the maximum payment of all outstanding CIP Bonds cannot exceed the statutory limit. Net Debt Limits In addition to the limitations above, in the case of a municipality with a population of 2,500 or more, the bonds are subject to the net debt limits under section 475.53. Minnesota Statutes Chapter 475.53, Subd. 1, states that no municipality, except a school district or a city of the first class, shall incur or be subject to a net debt in excess of three percent of the market value of taxable property in the municipality. At the time of the drafting of this Plan Amendment, the City has the following net debt capacity: Payable 2010 Taxable Market Value $1,411,069,200 Times 3% .03 Maximum Net Debt Limit $ 42.332,076 Outstanding Applicable Debt Less Funds on Hand (2,856,075) Net Debt Limit Available Capacity $ 39.476.001 Proposed Capital Improvements The City's Capital Improvement Plan is amended to include $1,450,000 for the purpose of acquiring the Public Safety Facility and City Hall Facility that the City currently leases from the EDA. The acquisition shall be financed via the City's issuance of General Obligation Capital Improvement Plan bonds. Detailed information on the projects, including a discussion of the eight factors which must be considered by statute for each project, is found in the pages that follow: 2