Major capital projects planned over the next four years, including a recreational complex, will result in more than $150 million in taxpayer-backed debt and a debt service rate of 15%, the city’s cap, by 2027. It will soon rise.
Revenue from development fees and an expanded tax base are expected to cover a significant portion of the construction cost of the $108 million new recreation complex by 2026.
But with a new sports complex and three other major capital projects moving forward at a fast pace, the city’s taxpayer-funded debt will reach $52.5 million over the next 10 years.
The city’s proposed 2024 budget details expenses expected to affect tax increases through 2028.
The other three major projects are the Riverside Dam reconstruction, Black Bridge Road improvements, and Townline Road widening.
The City’s total debt financing for these projects is $139.7 million, supported by existing tax revenues, development fees, and anticipated tax revenues from future growth.
Of this planned debt, $87.8 million is included in next year’s budget for the construction of a recreation complex and the reconstruction of Blackbridge Road and Bridge.
The remaining $51.9 million through 2028 includes $19.3 million for Riverside Park Dam rehabilitation, $21 million in growth support debt for the North Cambridge and Southeast Galt development projects, and $5.8 million in growth support debt and $580 in tax support debt. Includes $1,000,000. Townline Road Reconstruction Project.
Development costs from residential and industrial growth planned between Riverside Drive and Fountain Street North and around a recreation complex on the city’s south end will help soften the blow for ratepayers. In 2024 alone, DC’s earnings are expected to exceed his $40 million.
More than $60 million in additional tax revenue next year will allow the city to borrow even more for capital improvements.
But these debts will affect the city’s financial stability for the next 10 years.
The state’s Ministry of Local Government and Housing regulates the amount of debt local governments can take on.
The ministry’s standard for annual repayment limits is 25% of a municipality’s own net income.
To ensure fiscal sustainability and minimize risk, the City of Cambridge’s unique debt policy increases its debt tolerance by an additional 10% of own-funded income on tax-supported debt (and (including 15% of fiscal revenue).
Cambridge already has $67 million in outstanding debt.
In addition, the city has $49.1 million in debt that was approved but not issued due to the timing of capital project funding needs.
According to the city’s proposed budget, the debt repayments issued by the city represent about 3.17% of the city’s own financial resources, well within the debt burden policies established by the city and state.
Once the $49.1 million in additional debt comes due, the city’s debt service rate will increase to 6.92 percent.
However, with approximately $140 million in additional debt coming due over the next six years, the city’s debt service rate will reach 12% by 2025, rise to 13% by 2027, and leave the remaining 10%. It is expected to exceed %. 10 year forecast.
Officials say they will review the city’s debt policy, the need for growth financing relative to D.C.’s revenue projections, and the timing of debt capital projects to ensure the city remains in a strong financial position. .
“If growth and consolidation does not meet the goals identified in the DC Background Study, taxes and water and wastewater rates to fund required debt payments as they become due may be impacted,” the budget proposal states. It is written that there is a gender.
“Staff will continue to proactively manage the timing of the City’s growth capital needs by forecasting D.C.’s revenue and ensuring sufficient funds are available to support projects.”
