Smoke and mirrors
Recently the city finance director submitted a letter to the editor, I assume with the approval of the city administrator and the city council. This letter states that our “debt” in fiscal year 2018 is $6,787,981 which is comprised of $3,009,983 in user fees + $3,778,049 in property taxes. In fact, this is NOT our “debt.” It is our “debt payment” for ONE YEAR only. It consists of $5,497,206 in principle + $1,283,775 in interest + $7,000 in agent fees. This information can be found in the Feb. 12, 2018 city council packet on page 148, which is available on the city’s website.
The city’s complete debt picture can be found on page 56 of the Comprehensive Annual Financial Report available on the state’s website https://auditor.iowa.gov. The city’s total debt is $45,419,175. The repayment of this debt spans every year from now until 2032 (14 years). The interest rates on this debt vary from 0 to 3 percent. We will pay $5,959,351 in interest on this debt.
It does not matter if our bond rating is Aa2, or that we have only used 68 percent of our legal credit limit. The city taxpayers’ “debt” is $51.4 million. Our “debt payment” for FY2018 is $6.8 million. Our debt payment for FY2019 will be a similar amount.
As the city’s debt and operating expenses continue to exceed property tax revenues, new user fees like the 911 commission will be created, and existing user fees like sewer and water rates, as well as storm water utility fees will continue to increase. It does not matter if the money to make the debt payment comes from our property tax bill or our water bill (a use fee), it still come out of the pockets of the people of this city. This needs to stop! Using smoke and mirrors will not hide the facts. Our wallets are not stupid.