FY 2004-09 Eugene CIP - Laserfiche WebLink

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I j management guidelines. Under those guidelines, the City can issue net direct debt equal to no more than $350 per capita, 3.0% of personal income and 1.5% of assessed value. These limits are more appropriate for determining the affordable level of debt that could be issued under the CIP. As of June 30, 2002, the City's debt per capita was at $263, debt to personal income was 0.4% and debt to assessed value was 0.5%. Net direct debt is defined as any debt issue that has a direct call upon the City's tax revenues (excluding tax increment revenues). Net direct debt includes all of the City's general obligation bonds except for the Airport issue that will be paid from Airport revenues beginning in FY03, and 50% of the Atrium bonds. The City excludes the ` :~i pension bonds from the definition of net direct debt. The City's debt ratios have an impact on its credit rating. The City is rated "Aa2" by Moody's Investors Service. When Moody's last evaluated the City's credit, it noted that: The city's overall debt burden is low [e]ven with [the proposed issuance of additional general obligation bonds for parks and open space and a new fire station], debt levels will remain low and very manageable. The City's low debt burden is one of its credit strengths. ; : Projected Debt Burden ' i j The City has net direct debt outstanding of $36.9 million as of June 30, 2002, excluding the pension bonds. Two additional general obligation bonds have been approved by voters and are scheduled for issuance during FY03 $8.68 million for Fire Projects and $6.305 million for Parks & Open Spaces. At the end of FY03, assuming issuance of both of these bonds, the City would have a net direct debt per capita of $333, which is very close to the $350 limit in the debt policies. The City's debt to personal income would be 0.5% and the debt to assessed value f would also be 0.5%. I Projections of debt capacity indicate that there is only a limited amount of additional capacity for debt issuance during the CIP period because of the debt per capita limit. By FY09, it is estimated that the City could incur an additional $18 million of net direct debt and stay within the current policy guideline of $350 of debt per capita. The CIP includes almost $254 million of unfunded projects, which greatly exceeds the estimated $18 million of available debt capacity the ' i City will have over the six-year CIP period. Some of these projects would most likely require debt issuance in order to be fully funded. The proposed Police Headquarters and City Hall replacement, for instance, are unlikely to be funded without issuance of general obligation bonds. If the City issued bonds to finance all of the unfunded projects during the CIP period, the City's , . net direct debt would rise to almost $250 million by FY09. The resulting debt per capita would be approximately $1,600, debt to personal income would be approximately 2.5% and debt to assessed value would be approximately 2.1 City of Eugene 2004 - 2009 Capital Improvement Program .Page 12 ~