Updated City of Dubuque Debt Reduction Plan Copyrighted
November 5, 2018
City of Dubuque Consent Items # 8.
ITEM TITLE: Updated City of Dubuque Debt Reduction Plan
SUMMARY: City Manager providing the Debt Reduction Plan public
information brochure.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File
ATTACHMENTS:
Description Type
Debt Reduction Plan Brochure Supporting Documentation
� ' � � ' I i ' I 1 � � . I
At their annual goal-setting sessions in 2015,the City Council established"debt-reduction policy"as a : WHY I SSU E D E BT?
high priority,which is issue less debt each year than the amount of debt retired that year. ,
• The City of Dubuque uses debt
The City used debt to accomplish needed projects during an extremely low interest rate environment : strategically most often for m ajor
because infrastructure investment gets more expensive over time.
� infrastructure projects with long-
• The older a piece of infrastructure gets, the more it is allowed to deteriorate,which increases costs.
term community benefits.
• The longer the wait to invest in infrastructure the costs are increased by inflation.
• If the investment in infrastructure is not made in this low interest rate environment,the investment • � � � � � � � � � � � � � � � � � � � �
will eventually need to be made when interest rates are higher,thereby increasing costs. ' p I p YD U KN OW�
\
The City dnes nnt use
StatutOry �eUt �Imlt U$ed �8S Of �Ulle 30� , debtfnrnperating
expenses and,in fact, is
� required by state cnde tn
too�io This chart shows the percentage of statutory debt limit : have a balanced nperating
so�io in the Fiscal Year(FY)2019 adopted budget By FY2028, budget every year.
$oo�0 90� the City will be at 20%of the statutory debt limit. '
io%
so% �
so% ssr �`
ao%
30% 37% �-
20% FY2019 Adopted Budget
zoi
�o%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28
In recent years, the City has taken
on debt incrementallytofund major
infrastructure projects for storm
TOtal Debt (in millions) water management, wastewater
treatment, parking improvements,
$310 Debt is being issued each year, but water distribution, and economic
$290 $Zg6 � more is being retired than issued.
development. The City believes that
$270 the debt incurred in the past was all
$269 �
$zso for critical undertakings that could
° $230 not be delayed. In fact, with delay
� $210 522a
costs will go up as infrastructure
$�so further deteriorates. Recent debt
$170 �
issuances took advantage of
Stso FY2019 Adopted Budget
$"' historically low interest rates,
$130 somethin that will not last.
FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY28 g
,
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,ti's. a��.+ ^ . . — I
Stormwaterimprovements required$73 million in debt. � �---y= — � ' ` '-
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The City of Dubuque's use of debt can be compared to many average homeowners �
who borrow to buy their home. The City has borrowed money at these low interest
4 '
rates to invest in infrastructure. Unlike the federal government,the City does not :
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� � borrow money to cover operating expenses. '�-
_ �_`; _
STORMWATER IMPROVEMENTS
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# Project Description Amount Outstanding .��`�� ' '
1 Stormwater Improvements $73,254,610 _ �
2 Water & Resource Recovery Center $62,706,000 �°� ,� '`'
3 Water Improvements $31,633,961 � � !� ;+�' ��''
,
4 Parking Improvements $26,739,823 - �""�`- ��-
5 Downtown TIF Incentives/Improvements $21,654,743 �'
6 Sanitary Improvements $15,44E,490 - - -
7 TI F Rebates/Bonds to Businesses $9,816,164 WATER&RESOURCE RECOVERY CENTER
8 Industrial Park Expansions $7,270,110
9 Caradco Building lowa Finance Authority Loan $3,739,197
10 Street Improvements* $3,654,676 _ _ __
Total $255,911,114 y �'
*$126 million was spent on street improvements from 1997-2017 � sa
�... �i�����.
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General Fund Reserve Projections � ��_ � ��f - � �,*:
The City maintains a general fund reserve, or working balance,to allow for unforeseen expenses that ` `
may occur. The reserve will increase by$4.05 million (34.4%)from FY2018- FY2023. The goal is to a ^s" r���,
have at least a 20% reserve. In FY2017,the City had projected reaching this consistent and sustainable WpTER IMPROVEMENTS
20% reserve level in FY2022. In fact,the City met the 20%reserve requirement in FY2018,four years
ahead of schedule and,with the FY2019 and beyond contributions,this is sustainable.
�-
III �
FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 - _
Contribution $1,050,000 $1,700,000 $1,000,000 $100,000 $100,000 $100,000 I � ��� � �s �
I��� -- —�
City's Spendable General � __- -
Fund Cash Reserve Fund �, �
Balance $16,460,491 $15,485,326 $16,485,326 $16,585,326 $16,685,326 $16,785,326 ' ��•I��
-- -`_�s` T _ .11�►,.�.i�
%of Projected Revenue
(Moody's) 23.41% 22.02% 23.29% 23.35% 23.89% 23.33%
PARKING IMPROVEMENTS
Property Taxes Per Capita Among lowa's 11 Largest Cities . . . . . . . . . . . . . . . . . . . . . . . . .
Dubuque is the LOWEST in the state for property taxes per capita at$458.70. H►H►H►.eityofdubuque.org
• The highest(West Des Moines, $1,080.4) is 126% higher than Dubuque and the average
. . . . . . . . . . . . . . . . . . . . . . . . .
($735.87) is 60% higher than Dubuque.
The City uses State Revolving Fund (SRF) loans for water and sanitary sewer � gponsorship Interest Savings Green Project Interest Savings
projects whenever possible because of the very low annual interest rate. lowa
legislation allows water utilities that issue debt through the Clean Water
State Revolving Fund Program to sponsor and help finance other water quality
improvement projects within or outside its service limits.The lowest rate
received on an SRF loan was 1.43% for a 20-year term.
In addition to the low interest rates,the City has saved a total of
$12,180,000 in interest expense from two sponsorship projects, which include
the 70 Green Alleys in the Bee Branch Watershed and improvements in the
Catfish Creek Watershed.This savings represents interest expense that the
City would have had to pay on existing loans for the Water&Resource Recovery �� ���
and Upper Bee Branch that, because of this state financing program,was used
instead to pay for planned capital projects.
The City has saved a total of$1,2s2,000 in interest expense trom a Green ��4�062,000 I N I NTEREST SAVI N GS
Project Loan on the Upper Bee Branch Project,which qualified for 20% loan pLUS $5.9 M I LLION I N LOAN
forgiveness of the total loan disbursements.The Green Project loan forgiveness
amount is estimated to be$5,900,000. FORGIVENESS
Retired Debt versus New Debt (in Millions)
� $20 $18.9 $19.3 $19.5 $19.4 519.7
o $18.5 $18.2
$17.8
� $18 $17.2 $17.0
$16
$14
$12
$10
$8
$6
$4
, i
$2
i
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$-
FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY28
■Retired Debt ■New Debt
Percentage of Legal Debt Limit Utilized (FY11)
$o��o
70% 71% o
68/o
0 62%
60/0 56% 56% 56% 55%
50%
40% 37%
34% 33%
30%
25% 21%
20% 20%
10%
0%
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C��p'` ��J�o�'��Sy..�P`J�� �,o'� �,�.�a�'���.�P`J�� PO��A� ���a ��``�'�J��
O��o G O��o �. G� O��o
DID YOU KNOW? � � � _ � .�. � � � � . � � . .
Residents have access to the City's budget,
revenue, and spending via user-friendly � �
websites.
Making Sense of Understanding
Dollars and Cents Expenses
Check them out.� OPEN BUDGET: OPEN EXPENSES:
dollarsandcents.cityofdubuque.org expenses.cityofdubuque.org
City Portion of Property Taxes
FY2019 City Property Tax Rate Comparison Where do your property taxes go?
5�o How Your Property Tax Rate Is Split
s�8 s��.45
s18.15 sl$.Z6 FY2018 Consolidated Rate of 33.91801
$16.18 $16.33 $16.78
$16 $15.22 $15.35
$1, SlZ�$ Independent
siz.ze 1.9%
Siz
5io.o� Slo.se
5io
Se
$6
••
$4
SZ __ _ __ ._ __ -_ __ ._
$0
Ames Duhuque Ankeny* WestDes Cedar Avg.w/o IowaCity SiouxCity Davenport Waterloo Des Council
(FV19) Moines* Rapids Duhuque Moines* Bluffs
*Includes the transit tax levy adopted by the Des Moines Area Regonal Transit AuthoriTy for comparabiliTy.
Dubuque has the SECOND LOWEST FY2019 property tax rate ($10.59 per
thousand assessed value) of lowa's 11 cities with populations over 50,000.
• Highest-ranked city(Council Bluffs, $18.26) is 12%higher than Dubuque
• Average ($15.35) is 45% higher than Dubuque
Capital Health& How General Fund Money is Spent
Social Services
Projects �q�
Transfers Out �'��° � __Deht Service
4.5% � 1�3�� Public Safety (fire,police,ambulance seruices,9-1-1 dispatch,animal control,building o
Community& inspections,aime prevention,emergency management,flood control,etc.) 44.3/o
Economic — -- Culture&Recreation (parks,reaeation,library,AmeriCorps,arts&cultural affairs,civic center, o
Development conference center,marina,etc.) 18.6/o
6.4%
General Government (information seruices,city attorney&legal seruices,city clerk,city council, �3.3%
city hall&general buildings,city manager,finance,etc.)
Public Works (streets,bridges,and sidewalks;airport,snow removal,street cleaning, 9 Do�o
street lighting,traffic control,etc.)
Community&Economic (economic development,housing and community development, 6.4%
Development neighborhood development,planning and zoning,etc.)
Transfers Out (to funds other than General Fund) 4.5%
Capital Projects (City infrastructure improvements or major equipment purchases) 1.1%
Health&Social Services (community health,health regulation and inspection,human rights,etc.) �,4%
Debt Service (governmentcapital projects,tax-inaement financing[fIF]capital projects) �,3%
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