Mayor – News – October 2019 – City Updates Residents on Spending Priorities for $500M Bond Sale and 3 Mill Maintenance Proposition


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Here are the Bond Sale benefits/goals


  • Does not increase millage rate to the public
  • Closes gap on unfunded FEMA capital infrastructure projects
  • Every bond dollar and associated project requires city council approval
  • Reduces payroll requirements on the city’s general fund
  • Provides additional business development / job opportunities
  • Achieves tax exempt status


Here is the language for Bond Proposition, Resolution No. R-19-285:


“Shall the City of New Orleans, Louisiana (the “City”), incur debt and issue up to $500,000,000 of bonds, in multiple series, each series to run not exceeding thirty (30) years from the date thereof and bearing interest at a rate not exceeding eight percent (8.00%) per annum, for the purpose of making capital improvements in the City permitted by the City’s Home Rule Charter, including constructing, renovating, acquiring, and/or improving (i) roads, streets and bridges; (ii) public buildings, affordable housing facilities, libraries, and parks and recreational facilities; (iii) surface and subsurface drainage systems and storm water management facilities; and (iv) public safety equipment, including acquiring all necessary land, equipment and furnishings for each of the foregoing, which bonds will be general obligations of the City, payable from ad valorem taxes to be levied and collected in the manner provided by Article VI, Section 33 of the Constitution of the State of Louisiana of 1974 and statutory authority supplemental thereto, with no estimated increase in the millage rate to be levied in the first year above the 22.5 mills currently being levied to pay General Obligation Bonds of the City?”


3 Mill Maintenance Proposition


In November 2018, the Board of Liquidation voted to reduce the mills levied for the payment of general obligation bond debt service in 2019 to 22.5 because the City was not spending its bond revenue fast enough. Since coming into office, the Cantrell Administration has been more efficiently managing and spending its bond proceeds. The proposed 3.00 mills fills that gap between the 22.5 mills levied in 2019 and the 25.5 mills levied from 2010-2018. The intention of this millage is to dedicate the revenue to maintain the infrastructure that has been built since Hurricane Katrina as well as the upgrades the City is making now.


 


The estimated annual revenue ($10.25 million) would be allocated as follows:


 


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Here is the language for Bond Proposition Resolution No. R-19-286


“Shall the City of New Orleans, Louisiana (the “City”) be authorized to levy a special tax of 3.00 mills on all property subject to taxation in the City (“Tax”) for a period of twenty years, beginning January 1, 2020 and ending December 31, 2039 ($10,250,000 currently estimated to be collected from the Tax for an entire year), with the proceeds to be dedicated solely to public infrastructure in the City and to be used for the purposes of repairing, improving, maintaining and operating (i) roads, streets, and bridges (ii) surface and subsurface drainage systems and storm water management facilities, and (iii) public buildings and public safety facilities of the City, including purchasing related equipment and vehicles for any of the foregoing, provided that a portion of the monies collected shall be remitted to certain state and statewide retirement systems in the manner required by law?”


Here are the millage benefits


  • Funded by transferring a reduction of 3.00 mills from bond debt service to this millage –  the City is essentially paying down its debt and using tax dollars to more wisely fund your priorities and maintain the city’s infrastructure.
  • A dedicated revenue source for maintaining our capital infrastructure investments.



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