Minutes 10/13/1987 - Laserfiche WebLink

Home Browse Search

October 13, 1987 87-449 Letter from the City Manager recommending adoption of a resolution approving the Capital Improvement Program. "On October 13, 1987, you are scheduled to adopt the annual five year Capital Improvement Plan for the City. The approval process this ~a~~ has emphasized detailed discussion with the Council. Overall, I think the process is the best since I have been City Manager. As always, there are differing viewpoints, but I think you have provided a forum for healthy public discussic and debate which assists in the establishment of public policy. These discussions have been educational for Council members, staff and citizens. I have recommended to you a Capital Improvement Plan whidh would authorize $8 million in General Obligation Bonds per year, plus an additional $2 million in 1988-89 and 1989-90. That recommendation represents an increase from previous CIP~, which anticipated no more than $8 million in General Obligation Bonds in any of the five years. The increase is needed because of the necessity to build a new high school in Churchland, which is estimated to cost more than 518 million, while still maintaining progress in other areas. Due to the magnitude of the high $~4~ project, even the $2 million per year increase in the years of school construction is not enough to meet all our needs. Thus, there are many worthwhile projects which are delayed or eliminated in my recommended CIP. However, there are several reasons why I did not recommend to you a higher level of spending. First, there is the reduction or elimination of some Federal funding, particularly General Revenue Sharing. Second, due to the reduction in rea.1 estate taxes, it was not possible to ~ransfer funds from the General Fund to the Capital Improvement Fund this year. Third, as you know, at the time of Portsmouth's l~s~t sale of General Obligation Bonds, the City's bond rating was increased to AA by Standard and Poor' Corporation. This was a notable achievement which could save the City thousands of dollars in [nteres~ payments, and it was awarded in recognition of our success ~n carefully keeping out total out- standing debt within our ability to pay. It is quite possible that a higher spending limit could jeopardize the bond rating, and increase the interest rate on subsequent bond issues. I would remind y~u that as recently as 1~83-84, the City's Capital Improvement Program authorized less than $6 million in General Obligation Bonds. Finally, spending at a higher level could require a ta~ increase, and I would not want to recommend such a measure to you after the Council was able to decrease the real estate tax rate by 8¢ to $1.22 this year. You also have a recommendation from the Municipal Finance Commission, which discussed the pr~pcsed Capit~l Improvement Plan on September 15. Their consensus was that much of the City's success in attracting ~usmnesses and private developers is due to ,~hn~proYements downtown and in PortCentre and River Pointe. The Finance Commission concluded that the City's commitment to suc projects has been largely responsible for improving the economic dlimate in Portsmouth, and that these projects produce a return on our investmen~ in the form of higher tax revenue and new jobs for our citizens. By continuing our inducements to economic renaissance, the Municipal Finance Commission £e~ls that the increased economic returns to the City will, in the long run, support an increased level of expenditure. Based on this reasonin the Commission recommended an annual authoriztion of $10 million in General Obligation Bonds, with priority emphasis to be placed on projects which foster economic development.