2008 Annual Comprehensive Financial Report

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Long -term Debt No new debt was issued in 2008. Principal payments of $1.9 million were made during the year on the City's general obligation and special revenue debt (Figure 8). Figure 8 Net Change in Long -Term Debt (millions) Additional information on the City's long -term debt is provided in Note 8 to the financial statements. Bond Ratings Since 2000, the City's general obligation bonds have been rated Al, upgraded from A3. The 2004 Library Limited Tax General Obligation Library Bonds were issued with an insured rating (MBIA) from Standard Poor's of "AAA" and an underlying rating of AA In 2007, Standard Poor's affirmed the underlying rating of AA Limitations on Debt The state limits the amount of general obligation debt the City can issue to 3 percent of the actual value of all taxable property within the City's corporate limits. The current debt limit is $94.2 million. Economic Factors and Next Year's Budgets and Rates After a 12% decline in 2006, sales tax revenue increased by 3.3% in 2007 and remained steady in 2008 with a 0.6% decline. Due to the national and regional recessions, sales tax revenue for 2009 is expected to decline by 5 Sales tax revenue is projected to increase at an average annual rate of approximately 0.5% from 2010 through 2015. Assessed valuation and related property tax revenue increased by 7.3% in 2008 and, due to 2009 being a non reassessment year, are projected to increase by only 0.4% in 2009. Property tax revenue is projected to increase at an average annual rate of approximately 2.2% from 2010 through 2015 Water Utility rates, Sewer Utility rates, and Storm Water Utility rates were increased by 3 3 and 22 respectively, effective January 1, 2009. Similar annual rate increases are expected for the next five years. 19 Total Governmental Business -type Of Activities Activities Total Change 2668 2667 2668 2667 266}8 2007 2008 -2007 General Obligation Bonds 6,0 6.3 1.0 12 7.0 7.5 -6.7 %a Revenue Bonds Notes 2.0 2.4 13.4 14.4 15.4 16.8 -8.3% Total 8.0 8.7 14.4 15.6 22.4 24.3 -7.8% Additional information on the City's long -term debt is provided in Note 8 to the financial statements. Bond Ratings Since 2000, the City's general obligation bonds have been rated Al, upgraded from A3. The 2004 Library Limited Tax General Obligation Library Bonds were issued with an insured rating (MBIA) from Standard Poor's of "AAA" and an underlying rating of AA In 2007, Standard Poor's affirmed the underlying rating of AA Limitations on Debt The state limits the amount of general obligation debt the City can issue to 3 percent of the actual value of all taxable property within the City's corporate limits. The current debt limit is $94.2 million. Economic Factors and Next Year's Budgets and Rates After a 12% decline in 2006, sales tax revenue increased by 3.3% in 2007 and remained steady in 2008 with a 0.6% decline. Due to the national and regional recessions, sales tax revenue for 2009 is expected to decline by 5 Sales tax revenue is projected to increase at an average annual rate of approximately 0.5% from 2010 through 2015. Assessed valuation and related property tax revenue increased by 7.3% in 2008 and, due to 2009 being a non reassessment year, are projected to increase by only 0.4% in 2009. Property tax revenue is projected to increase at an average annual rate of approximately 2.2% from 2010 through 2015 Water Utility rates, Sewer Utility rates, and Storm Water Utility rates were increased by 3 3 and 22 respectively, effective January 1, 2009. Similar annual rate increases are expected for the next five years. 19