HomeMy WebLinkAbout21. 22-368AUGUST 23, 2022 22-368 RESOLUTION
(CARRIED___6-1____LOST_______LAID OVER_______WITHDRAWN_______)
PURPOSE: APPROVE FRAMEWORK FOR FUTURE DEBT
INITIATED BY: FINANCE DEPARTMENT
LONG RANGE FINANCE COMMITTEE RECOMMENDATION: Approved
WHEREAS, the Common Council and Long Range Finance Committee received
information at a workshop on July 6, 2022 regarding investment in and financing of
improvements to city facilities; and
WHEREAS, staff has estimated approximately $65,000,000 will be needed in the
next ten years to finance the projected facility needs and based upon the an analysis of
the City’s debt staff recommends issuance of $7,500,000 in debt in 2023 and
approximately $18,000,000 in debt for each of the following 9 years to address facility
needs; and
WHEREAS, the Long Range Finance Committee recommends as follows
“To address the identified facility needs of the city of Oshkosh that total more than
$60 million, the Long Range Finance Committee recommends framework for the
issuance of new debt in the next 10 years, as economic conditions support the
issuance.”
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that to address the identified facility needs for the City, totaling more than $60
million, city staff are hereby authorized and directed to prepare budgets and other
documents as necessary and appropriate anticipating issuance of debt for these purposes
in the amount of approximately $7,500,000 in 2023 and approximately $18,000,000 for
each of the following 9 years to address the identified facility needs as economic
conditions support the issuance of these amounts of debt.
Finance Department
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us
TO: Honorable Mayor and Members of the Common Council
FROM: Russ Van Gompel, Director of Finance
DATE: August 15, 2022
RE: Recommendation to Create a Framework for Future Debt Issue
BACKGROUND
As part of its mission to research, study, and address the long range financial issues of the
City, the Long Range Finance Committee reviewed the policy on debt and is recommending
“A Framework for Future Debt Issues” be considered by the City Council.
At the Council Workshop on July 6, 2022, the City Council and Long Range Finance
Committee members heard a presentation about the need to invest in and finance the City
Facilities. Staff has identified that project in the amount of approximately $65,000,000 is needed
in next 10 years. To meet this need, the City would need to include about $6,500,000 per year
in new debt for facility projects.
To include and meet the needs for investment in City Facilities, the Council was presented a
“Framework for future Debt Issues” as follows:
Facilities $6,500,000
Parks 750,000
Sidewalks 500,000
Planning/Economic Development 500,000
Streets 7,500,000
Equipment 2,500,000
Total $18,250,000
ANALYSIS
The Long Range Finance Committee discussed the need and size of future debt issues. They
also reviewed the latest version of the Debt Analysis provided by Finance Director Van
Gompel. The City received its 2022 Equalized Value form the State of Wisconsin,
$5,336,259,600, or an increase of 10.69%. With the new equalized value, the current percent of
debt limit used is 50.84%.
Finance Department
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us
If the City issues $7,500,000 in 2023 (the City previously borrowed $7,300,500 for 2023 projects
in 2022) and the equalized value grows by 2.69%, the percent of state debt limit used will be
46.36%. If the City continues to borrow $18,000,000 for the next 9 years and the equalized value
grows by 2.69%, the ratio will go down to 39.22%
The Long Range Finance Committee also reviewed the net outstanding at the end of 2022 will
debt be $135,644.511 and the outstanding debt by the year 2032 will be $136,470,000 if that
pattern for future debt holds true.
FISCAL IMPACT
There is minimal future financial impact if the current economic assumptions for the growth in
equalized value and the amount of outstanding debt remains about the same.
RECOMMENDATION
The Long Range Finance Committee and Staff recommends that Council adopt a framework of
future debt issues. The Committee motion reads: “To address the identified facility needs of
the city of Oshkosh that total more than $60 million, the Long Range Finance Committee
recommends framework for the issuance of new debt in the next 10 years, as economic
conditions support the issuance.”
Respectfully Submitted, Approved:
Russ Van Gompel John Fitzpatrick
Director of Finance Assistant City Manager