Cincinnati Council Reviewing City's Increasing Debt
Cincinnati council members are expected to get more information this month on the city's debt policy—a debt that has increased by more than $207 million since 2010.
The group could be asked to approve that document in August.
Administrators said the increase is primarily for economic development projects, judgment bonds for the pension system, streetcar, MLK interchange, Smale Park, and the Capital Acceleration Plan.
The same report said the city's total outstanding debt is likely to increase to $1,207,255,000 during the fiscal year which started on July 1st. That number includes general obligation debt, economic development and water works revenue bonds.
The city's general obligation debt is re-paid using property and income tax revenues. One of the city's policies is that total long-term tax supported debt will not exceed 12.5 percent of revenues. It is estimated to be at 12 percent for the 2017 fiscal year.
Still the city's increasing debt is concerning to some council members. Council member Chris Seelbach said the issue deserves a "larger conversation."
"It's fine for the administration to say this is low for a city our size," Seelbach said. "But the fact is we have burdened taxpayers with over $200 million in new debt in the last several years and that's not something I think we should think of lightly."
Even as new debt is being added, the city projects about $220 million in debt will be maturing during the next five to ten years.
"Some of the new debt that we are issuing today will replace debt that's falling off and maturing within the next ten years," Zeno said.
The current debt policy in the city's administrative code was adopted in October 2015. Finance officials want city council to approve it too before meeting with bond rating agencies, which set the city's bond ratings. That determines the amount of interest the city has to pay bond holders. The better the bond ratings, the lower the interest rates.