Report: City can take on $11.3 million in debt
May 03, 2013 · Jennifer Pandich
Property value and the availability of debt were topics at a recent Mount Vernon City Council meeting.
Larry Burger from Speer Financial, the firm that handles much of the city's finances, gave a recent report to the city council about how much debt, through the selling of bonds, the city can yet accrue while following state and federal laws.
The city can borrow up to five percent of the total property value in city limits. According to a report from Burger, for fiscal year 2013-14 the total property value for the city is about $225.8 million. That means the city can borrow up to $11.29 million. Of that, the city has outstanding debt of $6.7 million. That includes the anticipated $1.2 million debt for Hwy. 30 work that includes roundabouts.
Twenty percent of the debt capacity is set aside by the city, leaving a reserve in case of emergencies. The amount set aside of the remaining capacity is about $2.25 million.
This amount is important when planning for future projects, such as the community/wellness center.
Burger also noted that interest rates for borrowing are extremely low, with the rates being offered on bonds around 1.5 percent. This makes borrowing at this time rather than in the future less expensive.