Finance Committee Agenda and Packet 2021 09 27

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SUBJECT: PRELIMINARY ASSESSED VALUATION DATE: SEPTEMBER 27, 2021 PAGE 2 OF 4 Beginning with the 2018 collection year, the City certified a mill levy 2.785 mills for the payment of principle, interest, and miscellaneous fees on the Recreation Center Bonds. The levy was lowered to 2.750 mills in 2019 and has remained at that level through 2021. The following chart summarizes the revenue, expenditures, and ending fund balances in the Recreation Center Debt Service Fund for 2017 through 2021. The projected ending fund balance for 2021 is roughly 23% of annual expenditures. Before certifying the mill levy for the 2022 collection year, staff would like to discuss two options for setting future mill levies. Option 1: Annually set the Recreation Center Bond levy to the minimum amount necessary to pay principal, interest, and miscellaneous fees during the year. This option would maintain a fund balance of approximately 20%-25% of annual expenditures. Staff is recommending Option 1, which is assumed in the City Manager's Recommended Budget for 2022. Option 2: Maintain the 2.750 mill levy regardless of the changes in assessed value. This option would continue to increase the fund balance until the 2026 call date. At that time, the City would begin the process of early redemptions and pay down the debt as quickly as possible. This option was selected for the 2004 General Obligation Library Bonds, which were completely paid in 2018. CITY COUNCIL COMMUNICATION 15