Complete Document - City of Auburn

City of AuburnOverview of Debt Policy and Outstanding DebtThe City's general obligation debt outstanding at September 30, 2002 is as follows:CalendarPayment Principal Outstanding Year ofIssue Source Issued at 9/30/02 MaturityPark and Recreation Facilities Bonds (74) Five-Mill Tax $900,000 $40,000 2003Refunding Street Imp. Warrants (76) City Gas Tax 1,000,000 270,000 2006East Alabama Medical Center Note (96) General Fund 250,000 150,000 2007East Alabama Medical Center Note (97) General Fund 250,000 164,331 2008Capital Improvement Bonds (97) Five-Mill Tax 6,500,000 5,445,000 2015G.O. Warrant (98) General Fund 750,000 56,238 2003G.O. Refunding Warrants (98) General Fund 3,370,000 2,030,000 2007G.O. Warrant (98) General Fund 810,672 535,172 2008G.O. Warrant (98) General Fund 1,200,000 796,707 2008G.O. Refunding School Warrants (98) School Tax 8,170,000 6,325,000 2011G.O. Bonds (98) Five-Mill Tax 2,000,000 1,615,000 2015G.O. Warrants (99) General Fund 650,000 295,778 2005G.O. School Warrant (99) School Tax 857,750 651,702 2009G.O. Warrant (99) Five-Mill Tax 3,700,000 3,700,000 2014G.O. Warrants (99) General Fund 4,110,000 3,710,000 2019G.O. Warrant (00) General Fund 1,507,034 1,251,710 2010G.O. Warrant (01) General Fund 428,000 381,651 2006G.O. Warrant (01) General Fund 1,035,400 953,309 2011G.O. Warrants (01) Sewer Fund 24,765,000 24,740,000 2024G.O. Warrant (02) General Fund 1,937,000 1,900,866 2012G.O. Bonds (02) Five-Mill Tax 7,250,000 6,960,000 2016G.O. School Warrants (02) School Tax 27,275,000 27,275,000 2026Capital leases General Fund 1,873,132 951,686 VariousCapital leases Sewer Fund 169,203 76,488 2005Total general obligation debt at September 30, 2002$90,275,638In August 2001, the City issued $24,765,000 of general obligation warrants along with a non-interestbearing general obligation warrant with a maturity value of $9,400,000. The original principal amountof the non-interest bearing warrant was $5,257,326. In order to provide for the payment of the noninterestbearing warrant at its maturity, the City will make semi-annual sinking fund payments onJanuary 1 and July 1 each year until maturity. The sinking fund will be invested in repurchaseagreements fully collateralized by securities authorized by state law so that the earnings, togetherwith the deposit, will be sufficient to pay the maturity value of $9,400,000 on January 1, 2012. As ofSeptember 30, 2002, the total remaining sinking fund payments are $6,388,921. The sinking fundpayments required each fiscal year are $672,518 through 2011. The final payment in 2012 is$336,259. As of September 30, 2002, the amount payable is $5,589,738, which equals the originalprincipal amount of $5,257,326 plus the accretion of interest through that date of $332,412. It is theCity Council’s intention that the debt service on the interest bearing G.O. warrants and the sinkingfund payments on the non-interest bearing warrant will be paid from the Sewer Fund.The capital leases were used to finance the purchase of vehicles, communications equipment, heavyequipment and computer equipment. In compliance with legal requirements, the lease agreementsinclude a funding clause which states that if funds are not appropriated for any future fiscal period, theCity will not be obligated to make any lease payments due beyond the end of the current lease term.While this will not constitute an event of default, the leasing companies would be entitled to repossessthe equipment and retain all sums previously paid as compensation for equipment use and itsdepreciation. The City has never defaulted on a capital lease. Leases are amortized with monthlypayments.62