Agenda - Council - 06/12/1984 - Laserfiche WebLink

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I I I i I I I I I I I the case. The use of SAC funds has increased (and is projected by the I~/CC to increase) as follows (in millions of dollars): 1979 $ 3.7 1980 4.4 1981 5.3 1982 6.1 1983 5.6 1984 7.6 1985 9.2 1986 10.0 1987 10.2 1988 10.5 SAC funding is received by a connection charge to the sewage system. The program was initiated in 1973 with a fee of $275 per connection. Since that time, the rate increased at $25 per year until it reached $425, at which level it has been stabilized for a number of years. The additional borrowing planned may require the rate to be increased for 1985. A decision will be made at the time of the review of the 1985 MWCC budget. The Investment Framework chapter calls for the review of development programs by two measures--the regional agency debt indicator and the debt service indicator. The debt indicator has been placed at $650 million. If that level of out- standing indebtedness were exceeded, it is expected that the credit rating of the Council may drop below AA. A lower credit rating would lead to higher interest costs and the possibility of shorter debt retirement schedules, thus increasing the annual debt service costs. On Dec. 31, 1983, the outstanding indebtedness of the metropolitan agencies was $307.3 million. By adding the proposed program as indicated, the outstanding debt would increase to a high of $330.4 million on Dec. 31, 1985, 50.8 percent of the debt indicator (see Figure 1). The Council has encouraged the metropolitan agencies to plan their debt programs so that the annual principal and interest payments are relatively level. To measure these payments, the debt service indicator was adopted. The indicator relates to the regional income index, which consists of Minnesota gross individual income and 10 percent of the market value of taxable real estate and personal property in the seven counties of the Metropolitan Area. The index then "floats" as changes occur in the market value of taxable property and in personal income. The indicator has been established at one- fourth of one percent of the index. The index was at its highest level, 0.176 percent, in 1976. Since then it has decreased as the annual debt service payments have decreased in its relation to the index. The high interest payments of the bond issues of the 1980s drove the index up again in 1981 to 1983, but they decrease thereafter so that the 1980 level and the 1989 level are approximately the same (see Figure 2). The proposed new debt will require higher payments that will peak in approximately 1986 to 1988 at 0.166 percent. That peak is estimated to be below the levels of 1972 to 1976. FINDINGS OF FACT AND CONCLUSIONS 1. The Metropolitan Waste Control Commission has submitted a 1982-1986 Development Program in accordance with the Metropolitan Reorganization Act.