Complete Document - City of Auburn

City of AuburnOverview of Debt Policy and Outstanding DebtAuburn initiates the assessment projects to construct streets through undeveloped properties. Afterthe property owner and City come to agreement on the scope of the project, the City securesconstruction financing by inviting bids from local banks. After project construction is complete and thetotal project costs are known, permanent financing is arranged with a local bank through thecompetitive bid process. The property owner then executes a promissory note to the City, the terms ofwhich are structured to provide a cash flow stream to cover the City’s debt service requirements forthe permanent financing. As a result of the assessment project process, the City’s infrastructure isexpanded or improved at no cost to the taxpayers.The City currently has three assessment projects. The first of these projects is North Dean Road,which began construction in January 1997 and was completed in July 1998. The second assessmentproject is Watercrest Drive, which began in November 1999 and was completed in July 2001. Thethird assessment project is Longleaf Drive, which began in February 2001 and was completed in April2001. The City is paying the debt on the Watercrest Drive and North Dean Road projects with fundingprovided by the property owners. The debt for Longleaf Drive was paid in full in February 2002.Debt Issuances Planned for Fiscal Year 2003The FY 03 budget includes borrowing a total of $3,475,579 for the following capital outlays:• $1,000,000 to finance stadium improvements. This project is contingent upon a structuralengineer’s inspection report.• $1,000,000 to finance construction of a tennis complex. This project is contingent upon theenrollment of an adequate number of members signing a legally binding dues commitment. Ageneral obligation warrant will be issued and paid by the General Fund. The membershipdues will be structured to cover the cost of the debt payments.• $510,000 to finance street construction.• $755,000 to finance the purchase of several vehicles. The planned purchases are as follows:#"Platform fire truck ($550,000)#"Knuckle boom loader ($100,000)#"Backhoe ($70,000)#"Self-contained vacuum leaf loader ($35,000)• $89,937 to finance the purchase of computer system components.• $70,642 to finance sidewalk construction.• $50,000 to finance traffic signal installation.The items listed above will be financed by the issuance of general obligation warrants; the debtservice thereon will be paid by the General Fund.Debt Issuances Planned for Fiscal Year 2004The FY 04 budget includes borrowing proceeds totaling $1,283,198 for the following capital outlays:• $350,000 for the construction of a new fire station.• $380,000 for street construction.• $200,000 for the construction of a new teen center.• $150,000 for the development of park property.• $73,202 for sidewalk construction.• $50,000 for traffic signal installation.66