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HomeMy WebLinkAbout1995-07-24 95-337 ORDERCOUNCIL ACTION Date: 7-10-95 Item No. 95-337 Item/Subject: ORDER, Proposing Amendment to the Bangor City Charter, Article VI, Section 13(d)--Iasue of Bonds and Notes Responsible Department: City Manager Commentary: The attached Charter ansmah ant would delete the current Charter requirement that all -general fund debt" be issued in a ma:mer which requires repayment in annual equal principal installments. This provision requires that such debt be front -ended with the largest payment in the first full year and declining payment thereafter as interest declines. The revised Charter language would afford such greater flexibility in debt repayment and would be helpful in addressing projects, such as TIP borrowings, where revenues to repay debt do not match debt repayment requirements. The current system can lead to the need to support ouch debt from a general fund appropriation while we wait for designated revenues to catch up. The revised language will also allow flexibility in structuring our debt repayment to meet operating budget constraints end our desire to equalise annual debt payments. In effect, the revised charter provision will allow us to better manage our debt issuance on both a short and long term basis. Please note that this change also inserts a provision which requires interest payments to be made on a current annual basis provided that the first payment data for such interest payments may be extended up to 15 months from the date the general fund debt is incurred. This language has been added at the request of the Charter Committee which felt the City should avoid capitalizing interest payments to the greatest extent possible within the need for borrowing and repayment flexibility. Manager Comments: This change has been recommended by the Council's Charter Committee. I recommend your approval Please note that this item appears on the agenda for purposes of scheduling a public hearing. I would recommend that the hearing be set for the August 7, 1995 meeting. / EI.(/J6.41 City Messner Associated Information: Order Budget Approval: Direct regal Approval: ea rvty col ;c: Introduced For Passage First Reading Page_of Ref _ Referral aoYk 95-337 Aeipue to mwdw Saucy July 24, 1995 CITY OF BANGOR (TITLE.)Wrber...... ......... Rzopoaing- Amendmentto.. the. Bangor. City Charter, Article VI, Section 13(d) --Issue of Bonds and Notes Be al city Chased of W Cite ofBoup'. ORDERED, THAT WHEREAS, the Bangor City Charter currently requires that general obligation bonds which are expected to be paid from the City's general fund be repaid on the basis of equal annual principal payments; and WHERHAS, this provision results in early year bond payments being the highest with declining payments thereafter; and. wHHEEAS, at times, this approach to debt repayment does net take into account the timing of collection of designated revenues required to repay such debt, particularly debt associated with municipal Development Districts; and WHEREAS, greater flexibility in structuring debt repayment can be useful in managing the City's debt and minimising the Impact of such debt on the City's tax rate; NOW, THEREFORE, BY THE CITY COUNCIL OF THE CITY OF BANGOR, ex IT ORDERED, THAT: the following amendment to Article VI, Section 13(d) of the Bangor City Charter be placed on the ballot of the next regular municipal election to be held on November 7, 1995, for approval by the qualified voters of the City of Bangor in accordance with Title 30-A, N.R.S.A. Sections 2104(1) and 21051 ARTICLE VI BUSINESS AND FINANCIAL PROVISIONS SECTION 13 ISSUE OF BONDS AND NOTES Sec. 13 Issue of Bonds and Notes. A General Fund Debt. This subsection 13(d) applies to 'general fund debt" which means bonds or notes that are expected to bepaid from the City's general fund. Bondsor 95-33] ARD BB IT FURTHER ORDERED, THAT: pursuant to 30-A H.R.S.A. Sections 2104(6) and 2105 (2), the form of the question to be submitted to the voters shall be as follows: QUESTION (CITY CHARTER AMENDMENT) 'Shall the proposed City Charter Amendment summarized below be approved and adopted by the City of Bangor?" "3g®Axy: The proposed amendment to Article vl, Section 13(d) of the City Charter would delete existing provisions requiring that the general fund debt of the City be repaid in equal annual principal payments. The revised Charter provisions will allow the City Council to continue to structure principal repayment on either an equal annual principal basis or any other repayment schedule the Council 95-33] may determine. Interest payments are required on a current annual basis with the first such payment due within 15 months of the date the general fund debt is incurred." The City Clerk is hereby directed to take all necessary action consistent with this Order. (Statement of eactst Deletions from the existing Charter provisions are struckout.The intent of this amendment is to remove the current Charter�requiresont that general fund debt be social structured on an equal sal principal basis). New ma}trM f5 onderime4 IN CfTY�"COUNCIL 95-337 July 24, 1995 - - 0 R D E R Passed Public Hearing Set Title, Proposing Amendment to the Bangor for ugaust 14, 1995'. City Charter, Article vI. Section 13(d) I f Bonds d — .Notes .... LERK ......�.......,..../...........!l....... 4...... ' A®iVed to ......i ............. Councilman 0