06-12-19 Personnel and Finance - Laserfiche WebLink

Home Browse Search

411 CITY OF SOUTH BEND I OFFICE OF THE CLERK the next five(5) years, a capital lease will ensure that we are paying for that vehicle over the next 5 years, as opposed to paying for it all this year. He went on, But again,the big take-away here is that we do not, and we will not use debt to finance operations. In terms of what we spend debt on, this is a chart that I think some of you may have seen before (referencing a slide in the presentation). Most of our debt, over fifty percent (50%) goes to two (2) areas: economic development and waste water. Again, waste water is because sewer projects are very big and expensive and so a lot of those capital projects do require debt to actually finance those projects. Economic development, some of that is TIF bonds, some of that is the Smart Streets that we did recently which is a pretty significant component of that. Some smaller areas that we finance include highways, trees, and parks, and then the rest of everyone else. He continued, I did want to highlight the recent issues of debt over the last three (3) and a half years. This is what we've done from the debt perspective. In 2016 we did not have any new bond issuances. We had what was called a refunding. And refunding is just another way of saying refinancing. So, we were refinancing an old debt to get a better interest rate. In 2017 we had a few debt issuances. We actually had three (3) bonds. One (1) was the parks general obligation bond and then we had two (2)TIF bonds. 2018 we, again, we had three(3) bonds that we issued. There was a general obligation bond for Fire Station Number Nine (9). The Zoo had economic development revenue bonds. Again, that is a bond that was secured by economic development income tax for the purposes of capital projects that we do, and then another TIF bond for parks. In 2019, we have had capital leases. As I said, we just sent another one (1) through the Board of Public Works recently, but we have not, and we do not expect to issue anymore bonds this year. So,that's not in the plan unless something arises or comes up. At thatpoint we'll go before Council and see what your thoughts are, but that is not the plan at this point. Are there any questions about what we used debt for? Committee Chair White opened the floor to questions from Committee and Council Members. Committee Chair White asked, When looking at the debts, are there other revenue streams that are used to support these areas? Mr. Parker replied, Absolutely. So again, the debt that we see is really only being used to finance the capital projects in these areas. This is sort of completely outside of the operations of these particular areas. Parks has its own property taxes that are being used to finance their operations. Waste water, obviously, is financing their operations through the revenue they bring in. As well as paying the debt service on their debt that they have but financing their operations through that revenue. They're not issuing the debt to actually fund operations. Committeemember Voorde stated, This may require an opinion if you don't have any recollection. Back in the 80's, we established a fund for the Fire Department for capital projects, for other stations and stuff like that,based on ambulance fees. And then at some time after I was gone, they did away with that,and I think then that money would go to the General Fund.Why do you suppose that was done? Mr. Parker replied,Yeah, at that point, I don't know why it was done. I will say that in 2015, EMS operations was moved out of the General Fund and into its own dedicated fund, so the ambulance fee is,today in 2019,in its own dedicated fund. They actually do have a capital fund as well. They EXCELLENCE ACCOUNTABILITY INNOVATION INCLUSION EMPOWERMENT 455 County-City Building 227W Jefferson Bvld South Bend,Indiana 46601 p 574.235.9221 f 574.235.9173 TTD 574.235.5567 www.southbendin.gov 12