1979-05-23 Special Meeting - Laserfiche WebLink

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• • • Special Meeting 5/23/79 5 In order to implement construction and complete the above capital projects in a reasonable manner and consistent with the City's ability to pay, strict adherence to fiscal responsibility of operations and maintenance funding and expenses and sound fiscal planning of long term debt is essential. Attached to this document is a graph that delineates the City's actual budgets for fiscal years 72-73 through fiscal years 78-79 and the pro- jected budgets for fiscal years 79-80 through fiscal years 85-86. The projected budget amounts assume an eight (8) percent increase in inflation and growth per year on a straight line basis. The projections. depict an increase over seven (7) years of $3,300,000.00 - approximately $470,000.00 per year. This projected increase does not include the long-term debt requirements for the aforementioned capital improvements to be outlined below or the increased opera- tions and maintenance costs related to the new and additional facilities. • In planning the long-term debt, many factors tangible and intangible must be considered by the City Council. And, one of the major factors is the annual debt requirement. For discussion purposes, let's assume a six (6) percent interest rate on $1,000,000.00 to be paid in twenty equal principal payments of $50,000.00. The first year's debt service would be $110,000.00 ($50,000.00 principal and $60,000.00 interest) with each subse- quent payment declining in interest only. Over the twenty-year pay out on the bonds, the average annual debt service require- ment per million dollars would be approximately $85,000.00. If these assumptions were applied to the needed capital improve- ments and the projected increases in the operations and mainte- nance budgets, the City's fiscal requirements would increase by over $2,000,000.00 per year immediately. The purpose of providing this information is not to justify the proposed contract but to provide industry with information about the problems and needs of the City. In addition, it is a forum to let you know that the elected officials who have the ultimate responsibility to provide sound and efficient government are committed to that objective. There was a brief discussion regarding the needs of the City and the fact the items mentioned were not the only needs, but the needs far exceed the revenue. The February Bond Election was discussed. It was determined that the bond issue passed almost three to one. The question was asked if the City gets Revenue Sharing. It was determined that we do get Revenue Sharing Funds, but the money is not spent for operation costs.