Council adopts capital-borrowing policy tied to equalized assessed value, replacing informal $2M guideline
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Summary
Council voted to create a new ordinance linking annual capital borrowing to changes in the state's equalized assessed value, replacing a largely informal $2 million guideline; supporters said it adjusts capacity with real-world conditions while opponents urged caution about increasing borrowing.
The City Council on Nov. 3 adopted an ordinance creating a formal capital-borrowing policy that ties the city's annual borrowing level to changes in the state's equalized assessed value rather than the informal $2 million guideline used in recent years.
City staff said the proposal makes the city's borrowing capacity flexible and indexed to real economic conditions, allowing more borrowing when assessed values rise and enforcing belt-tightening when values decline. The policy is intended to reflect inflation, rising construction costs and projected development, while preserving fiscal discipline through an overall self-imposed debt cap (reaffirmed earlier in the meeting).
Some council members urged retaining the $2 million target and cautioned against loosening borrowing limits purely because property values increase; others said the draft provides responsible, adjustable capacity and that departments had already trimmed capital lists. After debate the ordinance passed on roll-call.
Staff will implement the new policy by referencing the Department of Revenue's annual equalized assessed value each February when setting that year's capital plan and borrowing recommendations.