Complete Document - City of Auburn

City of AuburnOverview of Debt Policy and Outstanding DebtEnterprise Funds and Industrial Development Board DebtSewer Enterprise FundIn August 2001, the City issued a general obligation warrant for $24,765,000 and a non-interestbearing General Obligation Warrant with a maturity value of $9,400,000 to finance the de-privatizationand expansion of the Northside and Southside Sewer Treatment Plants. In addition, the net proceedswere used to purchase equipment and several miles of interceptor lines and to provide funds for plantand line improvements and expansion. Debt service on the $24,765,000 issue will be paid from theSewer Fund. The non-interest bearing General Obligation Warrant was issued in favor of the seller ofthe sewer plants as additional purchase price of the assets. In order to provide for the payment of theWarrant at its maturity, the City will make semi-annual sinking fund payments each year beginning inJanuary 2002. The sinking fund will be invested in repurchase agreements fully collateralized bysecurities authorized by state law so that the earnings, together with the deposit, will be sufficient topay the maturity value on January 2012.Industrial Development BoardIn addition to general obligation debt, the City's Industrial Development Board has issued debt tofinance its operations. The Industrial Development Board (IDB), a public corporation, is a separatelegal entity, whose members are appointed by the City Council. In FY00, the IDB issued debt tofinance the cost of industrial park improvements. Prior to issuance, the City Council approved anappropriation agreement to fund the IDB’s debt service costs.The City's Industrial Development Board debt outstanding at September 30, 2002 was as follows:Principal Outstanding Year ofIssued to/Purpose/Payment Source Issued at 9/30/02 Maturity2000 Series A Non-taxable Bonds (00) / Improvements $4,680,000 $4,375,000 2020to Auburn Technology Park North / Appropriation Agreementwith City Council2000 Series B Taxable Bonds (00) / Refund various 7,710,000 7,060,000 2020IDB issues / Appropriation Agreement with City CouncilAuburnBank note (01) / finance the purchase of the East 300,100 297,089 2006Alabama Food Bank building / operating lease paymentsCharter Bank note (01) / finance construction of the 1,500,000 1,444,891 2016Touchstone Precision Inc. building / capital lease paymentsAuburnBank note (02) / finance construction of the 957,500 953,490 2007Hoerbiger building in the industrial park / operating leasepaymentsCompass Bank note (02) / refinance loan on building leased 186,602 183,613 2007to Auburn University Gymnastics / operating lease paymentsTotal Industrial Development Board debtoutstanding at September 30, 2002 $14,314,083In addition to the debt listed above, the Industrial Development Board has entered into a short-termconstruction loan with AuburnBank for $952,574 to construct an additional building in the AuburnTechnology Park to be used by an existing business. Once the construction is completed, theconstruction loan will be converted to permanent financing. The IDB will maintain ownership of thebuilding and provide an operating lease to the business. The business’ monthly lease payments willbe structured to include the cost of the debt payments on the permanent financing.63