PORTLAND — The fiscal year 2016 capital improvements budget will have a second public hearing before the City Council Finance Committee at 6 p.m. Tuesday, Feb. 24.
An initial draft of the plan for bonds totalling $14.25 million for municipal, school, public art, and land bank projects, has at least $7 million of the $13.1 million in municipal bonds going to replace the city’s aging emergency communications system.
The plan presented by acting City Manager Sheila Hill-Christian also includes $3.4 million in sewer projects, from bonds that are repaid through sewer fee revenue.
In her cover letter to the committee chaired by Councilor Nick Mavodones Jr., Hill-Christian said at least $1 million in vehicle replacements has been deferred, along with other sidewalk and street projects, in an attempt to minimize the effect of debt service on the property tax rate.
The full estimate on replacing the hardware and software for emergency communications is $9 million, with the city of South Portland required to pay 30 percent because of shared services, Hill-Christian said.
Now at $20 per $1,000 of assessed value, the municipal debt service of $14.3 million adds 1 cent to the tax rate. However, the assessment increases to 10 cents when $12 million in debt service on the bond to meet current and future pension obligations is added.
Overall, the city has $219 million in debt service for issued bonds, with $70 million in debt outstanding on sewer bonds. The debt service, including a pension bond retired in 2027, is expected to add 26 cents to the tax rate in fiscal year 2017.
As required by the City Charter, Hill-Christian also projected capital needs over the next five years, which showed a reduced need for bond funding through fiscal year 2020. For fiscal year 2017, Hill-Christian estimates the city will have to borrow a total of $12.6 million. The current budget contains $12.5 million in bonded spending.
Hill-Christian and her assistant, Ian Houseal, were praised by the committee, which includes Councilors Jill Duson, Jon Hinck and Ed Suslovic, for creating spreadsheets with greater detail of how future city projects, including a possible bond for elementary school construction, will alter the financial picture.
Hinck emphasized the need to measure the debt burden against the tax rate, while cautioning councilors against “passing what doesn’t hurt us now, but will affect other future councilors.”
Before the public hearing on capital spending, councilors will meet to discuss their priorities for future spending and invite public comment on priorities.
Elementary schools, the Department of Public Services move from Bayside, restoration of Capisic Pond, and the future of Congress Square were already topics for consideration when Houseal showed how estimated costs would fit into the bottom line for future debt service.
“I don’t have a lot of energy for funding Congress Square, given what the other priorities are,” Mavodones said.
Duson agreed, adding she would like to see any work to return State and High streets to two-way traffic in the near future removed from consideration.
The City Council is expected to have a first reading on the CIP budget in mid-March, and a final vote by the end of March.
Updated Feb. 20 to change meeting date to Tuesday, Feb. 24.