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City Council Meeting Minutes April 3,2018 <br /> payers. <br /> Mrs. Hurlbert provided a peer city comparison and provided that the current <br /> debt portion of the Tax Rate(cents) is 25.4. This includes approximately 4.6 <br /> cents that is to be used to pay for the voter approved bond's that have not <br /> been issued to date. The tax rate needed to service the existing debt is 20.8 <br /> cents. <br /> Mrs.Hurlbert reviewed the City's debt philosophy. In 2008, the City evaluated <br /> the benefits of issuing Certificates of Obligation (CO's) instead of Revenue <br /> Bonds to fund capital improvement projects for the Enterprise funds. CO <br /> bonds could be issued at a lower interest rate versus Revenue Bonds due to the <br /> stronger credit rating of the General Fund. CO bond covenants do not require <br /> the Enterprise funds to maintain the 1.2 times coverage,which lessened rate <br /> pressures. <br /> Mrs. Hurlbert reviewed the initiatives to minimize debt: <br /> Moved CIP/Engineering Department from debt funded to General Fund <br /> operations. <br /> Increased operating budget for street overlay and maintenance from $400K to <br /> $1.6M. <br /> Added sidewalk maintenance and improvements to General Fund operations. <br /> Created a budget for routine maintenance and equipment replacement: Parks, <br /> Facilities,IT,Fire, and Police. <br /> Began annual sweep of Enterprise fund balance in excess of financial goal to <br /> Cash fund CIP projects. <br /> Mrs. Hurlbert reviewed the approved 2018 CIP Projects and their funding <br /> detail. She also reviewed the bond process timeline regarding the CO and GO <br /> issuance that will be coming before the Council on May 15. <br /> Mrs. Hurlbert reviewed General Obligation bonds and explained that <br /> Payments for GO bonds will be structured to have a payment in FY 2018. <br /> Bond payments are usually structured to begin in the subsequent fiscal year. <br /> Payment in FY 2018 will use the tax revenue generated by assessing the tax rate <br /> to the full rate for the 2018 budget. She explained that Staff is confident that <br /> Standard and Poors will affirm the City's AA rating,which we have maintained <br /> since 2014. <br /> Mrs.Hurlbert discussed planning for future debt. She provided that Staff will <br /> prepare the 10 year CIP plan for all funds annually. The first 5 years of 10 <br /> Cayce San Marcos Page 3 <br />