Published: August 22, 2008 09:49 am      

Clinton’s bonding capacity could be greater, officials say

CLINTON — City Administrator Gary Boden says the city of Clinton is at 68 percent of its bonding capacity, but through negotiations of current debts, the general obligation debt could be lowered to as much as 40 percent.

The Internal Operations Committee discussed the city’s bonding capacity this week, when Boden said the recent bond issues approved by the City Council have added about 10 percent to the city’s debt load. He noted the city currently has a debt load of approximately $23 million, with a capacity of up to nearly $65 million. Mayor Rodger Holm said the city can bond up to 5 percent of its assessed value.

Boden stated that commitments have been made in recent years to Tax Increment Financing rebates, but due to newly instituted regulations following a ruling by the Supreme Court, those amounts — though not actual debt — must be figured into the debt obligation load.

Boden said some of the city’s debt has a quick retirement schedule and within the next two years, the debt amount could reduce from 68 percent to 51 percent. He added the city may have some opportunities to renegotiate some of the TIF rebate contracts so the amounts can be considered an annual appropriation and will not be included in the debt percentage. Boden said the city has seven contracts that could be renegotiated and noted any future contracts would include the appropriation clause.

Boden stated the city’s debt load points out a need to look at broader sources of funding to shoulder the burden of economic development projects, saying many projects the city has committed to benefit the entire county. He said the city is looking to work with county officials, calling on them to be a more committed player in both future and current economic development projects in the region. Boden advised he believed the county has a bonding capability of up to $150 million, but said he thinks the county currently shoulders no debt. County Auditor Charlie Sheridan said Thursday the county’s bonding capability is $141,731,812 and the county has not had outstanding debt since 1987 when the bond issue for the county home was paid off.

The IOC also discussed remodeling ideas for City Hall. City officials are looking to examine the current usable space and determine how it can be used more efficiently and house more city personnel, such as Public Works Department employees. Officials hope to renovate areas vacated by the Planning and Engineering Departments, which moved to a new building on Fifth Avenue South as part of a streamlining process for the Community Development Department.

Boden said that prior to moving the departments, the building was over the capacity of 22 to 23 employees per the available square footage under usable space standards as determined by the American Institute of Architects.

He said the building is under that capacity now, but with the addition of new personnel, such as the recent hiring of a human resources director and the city looking to employ an additional administrative assistant, the building could be restored to capacity. Boden said the city has $25,000 set aside for remodeling the building, but he thinks the project could cost as much as $170,000.

Public Works Director Gary Schellhorn said the renovation project costs depend on what the city would like to do. He said many non-load bearing walls could be reconfigured, but said that also would require changing carpeting, HVAC, electrical and ceiling configurations. Boden said the 30-year-old building’s design has outlived the functions of the city and he would hesitate putting a great deal of money into renovating the building. He said that if the city spends approximately $150,000 to redesign the building “reasonably right,” it would address immediate space issues and should be looked at as an investment.

Boden noted that security measures need to be incorporated into the new design, including a second exit for the council chambers.

When asked if a design concept had been proposed, Boden said city staff members are beginning to look at the potential options, figuring in departmental needs, efficiency, storage options and personnel.

Some committee members remarked they would like to see the building be as functional as possible, but would like to see proposed plans and estimated costs.