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Finance director outlines debt-levy assumptions; proposed levy up about $55,000
Summary
Finance Director Connie Hillman explained that staff omitted the usual 105% buffer when calculating the debt levy, and under current assumptions—including $50,000 in prepaids and roughly $245,000 in 2026 collections for 2025A bonds—the proposed levy would increase by about $55,000; staff will further review bond-structure options during the budget process.
Finance Director Connie Hillman briefed the committee on debt-levy assumptions and potential bond-structure issues that affect the proposed levy.
Hillman said staff inadvertently omitted the typical practice of budgeting 105% of scheduled bond payments when calculating the levy this year; instead staff assumed 100% of special-assessment collections and used cash balances across the life of regular bonds. For the new 2025A bonds, Hillman said staff assumed roughly $50,000 in prepaids and about $245,000 would be collected in 2026, which, under the current assumptions, yields a proposed levy increase of about $55,000.
Hillman also flagged a potential concern: issuing state-aid bonds for 2025 projects could push the city close to a statutory limit on advances and might require finding different contractors or subcontractors to finish certain work. She said staff will analyze options and that finance and administration will meet later in the week to recommend a structure to the committee as the 2026 budget process progresses.
Why this matters: the levy assumption affects property-tax-supported debt-service planning and the city's ability to fund capital projects; statutory constraints on state-aid bond advances could affect project timing and contractor selection.
Next steps: finance staff and administration will meet to develop recommendations and present proposed structures during upcoming budget discussions.
