Complete Document - City of Auburn

City of AuburnOverview of Debt Policy and Outstanding Debt• Capital leasing may be used for the acquisition of equipment items with an expected useful life ofthree years or longer with the approval of the City Manager upon the request of the departmenthead for whose department the equipment purchase is proposed. Debt service expenditures forcapital leases will be budgeted in the department for which the equipment was purchased.• When borrowing principal amounts that the local market can fund, general obligation notes orwarrants will be issued to the financing source submitting the lowest responsible bid in a publicopening of sealed bids. All invitations to bid on City borrowings that are issued to local institutionswill be reviewed by and must receive the approval of the City’s bond attorneys prior to theirissuance.• Debt will be issued on behalf of the City Board of Education as provided under the Code ofAlabama upon the official request of the Board. Principal amounts and amortization schedules ofproposed education debt issues will be structured in a manner to maintain a positive fund balancein the City’s Schools’ property tax funds (the Special School Tax and Special Additional SchoolTax special revenue funds) that are held by the City.Debt Repayment ResourcesThe Five Mill Tax Fund’s revenues, expenditures and ending fund balances for the past eight fiscalyears demonstrate the stability and conservative use of this source for debt repayment:City of Auburn Five Mill Tax Fund History FY 1995-2002Fiscal Year 1995 1996 1997 1998** 1999 2000 2001 2002*Revenues $ 982,276 $ 1,042,300 $1,134,766 $1,222,107 $1,302,251 $1,535,557 $1,551,649 $1,593,478ExpendituresDebt Service-Principal 280,000 280,000 250,000 705,000 765,000 830,000 905,000 1,275,000-Interest 228,695 215,251 203,861 528,815 497,585 647,987 623,584 627,355Tax Collection Fees 42,719 23,065 37,405 45,639 44,834 53,843 65,266 66,075Refunding issue costs - - - 99,537 - - - -Other Sources (Uses)^ - - - (408,132) - (759,781) - -Ending Fund Balance $ 2,061,854 $2,585,838 $3,229,338 $2,664,322 $2,659,154 $1,903,100 $1,860,899 $1,485,947* Unaudited**FY98 transactions include the results of an advance refunding of certain 1988 Street Improvement Bonds.^By law, any or all of the cumulative interest revenue of the Five Mill Tax Fund may be transferred to the General Fund to be used forcapital expenditures.General Obligation DebtGeneral obligation debt is supported by the full faith and credit of the City of Auburn. This debt form isused to finance various types of capital projects of the City and the City's Board of Education. TheCity issues debt on behalf of the School Board to finance the Board's capital projects. School Boarddebt is repaid from property taxes received by the City, which are earmarked for education purposes.61