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at least a portion of the capital preservation needs, they do not provide a comprehensive solution that <br />addresses O&M needs. <br /> <br />Debt Policies: The City’s debt management guidelines, which were last reviewed and approved by the <br />budget committee in February 2004, limit net direct debt to 1% of real market value. At the current time, <br />the City has about $130 million of additional capacity for debt issuance within policy limits. The recently <br />passed $27.5 million PROS bond measure will reduce this capacity. The proposed City Hall project is <br />likely to be funded in large part through G.O. bonds. The draft CIP also includes a range of projects for <br />which G.O. debt may provide full or partial funding. Any discussion of the use of G.O. bonds to finance <br />transportation capital preservation must also address other, competing uses of available G.O. debt <br />capacity. <br /> <br />Estimated Cost to Taxpayers: An early, rough estimate is that a $10 million bond issue would cost a <br />median-value home about $12 a year for 15 years. If $100 million worth of debt were issued to address <br />the existing backlog of needed street repairs, the median value homeowner would see additional property <br />taxes of about $125 per year. <br /> <br />Potential Motion 5: Move to direct the city manager to bring back for discussion after the first of the <br />year a proposal to refer to the voters a general obligation bond measure to generate additional funding to <br />offset the amount that would otherwise be generated from a TSMF for pavement preservation capital <br />funding needs. <br /> <br />Providing Assistance for Non-Profit Agencies <br /> <br />Concerns over the impact of the proposed TSMF on non-profit agencies have been raised through public <br />outreach efforts, public hearing comments and council discussion. The primary concern is that a possible <br />effect of the TSMF on non-profit agencies would be to reduce available funding for delivery of social <br />services that benefit the community. While it is critical to the community to address transportation <br />funding needs, social services to the community provided by non-profit agencies are also of vital <br />importance. <br /> <br />The council may wish to consider a mechanism to offset or mitigate impacts to non-profit agencies while <br />preserving the integrity of the TSMF as a funding source. A waiver or exemption of the TSM fee for a <br />selected class of customers could undermine the integrity and legal defensibility of the fee. A more <br />appropriate mechanism would be to create a credit program to offset or reduce fee payments for non- <br />profits from another funding source. Establishing a funding source to wholly offset non-profit TSM fees <br />is estimated to require $150,000 annually. This could be accomplished within the proposed ordinance <br />framework via the annual budget process and administrative rule-making authority of the city manager. <br /> <br />Potential Motion 6: Direct the city manager to bring back options in the FY08 budget committee <br />discussions for funding a TSMF offset program to reduce or eliminate TSM fee charges to non-profit <br />organizations that are providing social services to the community. <br /> <br /> <br /> <br /> <br />Attachment A for TSMF AIS/Council Action 112706 - 4 <br />