City Debt and Public Improvements
This afternoon we will be meeting at City Hall for a "City Council - City Manager Goal Setting Session." One of the topics on the agenda is the city's long-term debt.
This is a topic of particular interest to me. In preparation for our conversation, I put together a simple spreadsheet comparing the road projects I am aware of from 2007 and the ones we have approved or are considering for 2008. Consider this spreadsheet a work-in-progress -- for the 2007 projects I note which meeting minutes I got the numbers from, but in general those numbers were from around the time of the public hearing or feasibility study, and the final numbers for each project may have changed along the way. Likewise, for this year I have included the most recent numbers I'm aware of (many of them from the council packet for tonight's regular council meeting); in the case of the Upper Afton Road project, we will be discussing its feasibility study tonight. We have yet to see how close the engineers' estimates are to the actual bids we will receive. I also omitted projects that were fully assessed (e.g., new streets that a developer paid for in their entirety).
As the spreadsheet makes clear, we have a wide range of financing sources for our road projects. Most of the money comes from dedicated sources -- Municipal State Aid funds, the Sewer fund, special assessments to property owners who benefit from the improvements, etc. As a steward of the city's finances, the number that concerns me most is the "General Tax Levy" column -- this represents borrowings that will be repaid out of the general operating budget of the city. Unlike the various dedicated funds (which must be spent on road construction or stormwater management or what have you), these monies could otherwise be spent on just about any of the services that the city provides. Too much of this kind of debt limits the future financial flexibility of the city.
The good news is that, even as Maplewood continues to do more road construction than usual (taking advantage of the weak construction market and lower costs while we can -- we may as well spend the dedicated funds now when we can get 20% more road for our money, rather than next year when the new gas tax revenues start increasing the demand for road construction all over the state), we are on track to assume far less general levy debt in 2008 than we did in 2007 -- almost 80% less.
This is a topic of particular interest to me. In preparation for our conversation, I put together a simple spreadsheet comparing the road projects I am aware of from 2007 and the ones we have approved or are considering for 2008. Consider this spreadsheet a work-in-progress -- for the 2007 projects I note which meeting minutes I got the numbers from, but in general those numbers were from around the time of the public hearing or feasibility study, and the final numbers for each project may have changed along the way. Likewise, for this year I have included the most recent numbers I'm aware of (many of them from the council packet for tonight's regular council meeting); in the case of the Upper Afton Road project, we will be discussing its feasibility study tonight. We have yet to see how close the engineers' estimates are to the actual bids we will receive. I also omitted projects that were fully assessed (e.g., new streets that a developer paid for in their entirety).
As the spreadsheet makes clear, we have a wide range of financing sources for our road projects. Most of the money comes from dedicated sources -- Municipal State Aid funds, the Sewer fund, special assessments to property owners who benefit from the improvements, etc. As a steward of the city's finances, the number that concerns me most is the "General Tax Levy" column -- this represents borrowings that will be repaid out of the general operating budget of the city. Unlike the various dedicated funds (which must be spent on road construction or stormwater management or what have you), these monies could otherwise be spent on just about any of the services that the city provides. Too much of this kind of debt limits the future financial flexibility of the city.
The good news is that, even as Maplewood continues to do more road construction than usual (taking advantage of the weak construction market and lower costs while we can -- we may as well spend the dedicated funds now when we can get 20% more road for our money, rather than next year when the new gas tax revenues start increasing the demand for road construction all over the state), we are on track to assume far less general levy debt in 2008 than we did in 2007 -- almost 80% less.
Labels: finance
Post a Comment