The Newton City Council will meet in special session at 6 p.m. tonight where members will be asked to consider the issuance of bonds to finance a portion of the approximate $6.6 million in capital expenditures identified for inclusion in next fiscal year's budget, as well as discuss several hiring proposals.
In the report to the council released publicly Friday in advance of tonight's meeting, city officials acknowledge that the funding is not available to finance the proposed capital expenditures, though methods such as the issuance of bonds exist to finance most of the planned expenditures.
"When looked at in its entirety, $6,660,500 seems unlikely," City Administrator Bob Knabel reports to the council. "In fact, the City does not have that amount available for its capital expenditures. However, it is not as daunting as it may appear ... . "By 'chunking it up' into smaller components based on funding sources, Council will see that most of the projects that make up the $6,660,500 can be accomplished.
First, Knabel proposes that $2.03 million in capital equipment requests identified within the City's Enterprise Funds - golf, landfill and water pollution control - be included in next year's budget. However, the expenditures would only be made should the self-supporting funds be able to fully bear the capital costs. If not, the expenditures would be modified or delayed.
Knabel makes the same argument for the $570,000 in projects identified in the Designated Funds, such as the Road Use Tax Fund and Library Reserve Fund.
Most of the remaining funding needed to cover the capital costs would come from the issuance of bonds, the city adminitrator recommends.
Knabel is recommending to the council that approximately $1.5 million in bonds be issued to finance Tax Increment Financing projects, about half of which are not included in the capital program. Projects include partial funding for the hike and bike trail upgrades and East 31st Street reconstruction and a street overlay program. Some of the non-CIP projects included in the plan include clean-up of the manufactured gas plant, demolition of the former WaterWorks building and grant assistance to the senior housing project under way northwest of the downtown.
Knabel makes note that including these expenditures in a bond issue would not increase the debt service levy. Payment would be made by the individual TIF districts where the projects are located.
However, Knabel's proposal does call for bonding that would result in a 24 cent/$1,000 assessed valuation increase in the debt service levy in the coming fiscal year.
The plan calls for the city to issue a total $414,000 in bonds to leverage several state and federal grants earmarked for projects totaling more than $2 million. Projects include the East 31st Street rconstruction, a bridge grant for South 12th Avenue and hike and bike trail money. The bond would add 9 cents/$1,000 valuation to the debt service levy.
"Without using the bond issuance, the City would either have to find other revenues for its share or not accept the grants for these projects," Knabel notes to the council.
In addition, the plan calls for issuing $275,000 in bonds for park improvements. This would add 6 cents to the debt service levy.
Finally, the plan calls for the issuance of $418,000 in bonds to finance a number of small projects at City Hall - broadcast equipment, landscaping, security, and at the library, public works buildings. The big ticket item in the proposal is $200,000 for a new tanker truck for the fire department as well as funding for a neighborhood sidewalks program.
Projects included in the CIP but without a funding mechanism potentially could be financed later in the year by ending fund balance money in excess of 25 percent reserves.
Knabel will also make another pitch to the council tonight to hire a full-time Development Specialist to work within the adminstration on the planned housing initiative (the council will hold public hearings on the issuance of $3.7 million in bonds for the initiative when it meets on Jan. 20), retail development, the Comprehensive Plan and a new branding effort for the community.
The council put off a request to hire for the post last October.
In addition, Newton Fire Chief Jarrod Wellik will make a pitch to either hire two new full-time fireghters or look at a paid on-call option to increase the staffing levels of each shift.