FYE 14 Budget prelim - City of Norman

CITY OF NORMANGENERAL DEBT SERVICE FUNDBUDGETHIGHLIGHTSBackgroundDebt financing allows improvements to be made as the need arises rather than delaying theproject until sufficient revenue is accumulated. By using debt financing, the cost of capitalimprovements can be more equitably distributed to the users of the facility over its expected usefullife.The goal of the City of Norman’s debt policy is to maintain the ability to provide essentialCity services in a cost-effective manner. This goal is balanced with maintaining the ability toborrow at the lowest possible rates. For a project to be soundly financed through the issuance oflong-term debt, the City uses the following guidelines:• Revenue sources that will be used to pay off the debt are conservatively projected• The financing of the improvement will not exceed its useful life• The benefits of the improvement must out-weigh its cost, including the interest cost offinancing• Through the application of these policies, the Council rigorously tests the demand fordebt financingDebt financing supports necessary capital projects. These capital projects are integrated intothe City’s capital improvement plan, which also includes significant pay-as-you-go projects. Allcapital projects are linked to the services that the City provides to its residents, enterprise customersand visitors.Outstanding DebtThe following table summarizes the City’s outstanding debt as of the year ended June 30,2012, including debt to be paid by City-operated enterprises.Final Outstanding InterestGeneral Government Debt Maturity Balance RateCombined Purpose Bonds of 1992 Dec. 1, 2012 $ 250,000 .5% - 10%Combined Purpose Bonds of 2005A June 1, 2025 5,730,000 3.5% - 4.5%Combined Purpose Bonds of 2007A June 1, 2027 5,780,000 3.8% - 4.25%Combined Purpose Bonds of 2008A Dec. 1, 2018 4,060,000 3.375% - 4.25 %Combined Purpose Bonds of 2008B Dec. 1, 2013 2,745,000 3.25% - 3.625%Combined Purpose Bonds of 2010 Sept. 1, 2015 6,250,000 1% - 1.5Combined Purpose Bonds of 2012ACombined Purpose Bonds of 2012BCombined Purpose Bonds of 2012CMar 1, 2014Mar 1, 2017Mar 1, 2017290,00015,000,000$ 3,035,000Total $ 43,140,000Final Outstanding InterestTax Increment Authority Debt Maturity Balance Rate2%.5% - 2%1% - 2%TIF Revenue Note of 2009 Sept. 1, 2028 $5,789,454 VariableANNUAL BUDGET114