5.1. SR 06-28-1999 - Laserfiche WebLink

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06/25/1999 14:23 ET REF: NOOD8245.0000 FR:MOODYS TO:6124417425 Page 'IIof 3 ; at almost $2 million in 1998 equaled 39% of General Fund revenues and provided satisfactory liquidity and financial cushion. Except for a zero increase in the General Fund reserve in 1998 due to a planned transfer of funds for economic development, the city has grown the General Fund every year since . 1990. This growth in fund balance is expected to continue as the city budgets conservatively, especially in revenue sources related to development activities. The rapid tax base growth has resulted in budgetary growth, especially in public safety, and increasing tax rates. The city expects to slow tax rate growth going forward through tighter expenditure controls. State imposed levy limits have not had a significant impact on the city's financial operations as the city is allowed increases above the cap to accommodate growth in households. The city is currently $90,000 under the cap. In addition, the city believes that it has addressed year 2000 technology issues through replacement and ongoing testing of equipment and has formulated contingency plans. HIGH DEBT BURDEN REFLECTS GROWTH NEEDS Moody's expects the city's high debt burden of 7.1% to moderate due to the anticipation of future tax base growth, rapid amortization of 757. over ten years, and moderate future borrowing needs. The city's debt burden increased significantly in 1997 with the issuance of $27 million by the local school district. The city's direct debt is 3.0%. Similar to many rapidly developing cities, a majority of the city's debt (almost 607.) is backed by special assessments on affected property. For new developments, special assessments fully fund debt service payments. A strong history of prepaid assessments have resulted in an ample debt service fund balance of $5.5 million, equal to over two times the 1998 debt service payments. The city expects to use some of this balance to defease $2.25 million of outstanding debt in 1999. Enterprise revenues support the water and sewer revenue bonds. However, the sewer system. has been slightly reliant on connection charges to meet debt service obligations, a practice which could be problematic if development levels decrease. while the city has had considerable debt issuance in the past, the city believes that the current offering (which funds a trunk sewer and water line to the new development area) completes the utility expansion needed for the next phase of development. Street, and water and sewer line extensions are expected to be paid for by the developers. Future debt may include $1 million in 2001 to begin a street reconstruction program to maintain older streets, and the city expects that current municipal facilities will be adequate for the next five years. KEY STATISTICS 1998 estimated population: 15,600 Unemployment (Sherburne County, April 1999): 2.27. 1998 full valuation: $808 million 1998 full value per capita: $51,767 Debt burden: 7.17. Payout of principal (10 years): 757. . FY98 General Fund balance: $2 million (397. of General Fund revenues)