About $55 million — that's the short, simple answer to the question of how much debt the city of Newton has.
The full answer is a bit more complicated. The city has various types of debt for a variety of projects. Some apply to the state's debt limit for cities, some don't. Certain types of bonds are funded by property taxes, while others rely on special assessments or utility revenues.
About $44 million of the city's debt is classified as general obligation bonds. According to information supplied by Lunda Asmani, assistant city manager for budget and finance, general obligation debt is a common type of municipal bond secured by a local government's pledge to use legally available resources — including tax revenues — to repay bond holders.
The city's general obligation debt is further broken down into three subcategories:
Special assessments are paid for by the beneficiaries of the improvement, typically homeowners. The city borrows money and collects debt payments from special assessments. This type of debt is exempt from the state's debt limit for cities.
General obligation revenue debt is issued for water and wastewater projects. The debt service is paid from water and wastewater funds, not from tax revenues. It also is exempt from the state's debt limit for cities.
Non-exempt general obligation debt is used for citywide improvements, such as streets, traffic lights, public buildings and bridges. The debt service for these bonds is paid from property tax revenues and does count toward the state debt limit.
Examples of special assessment debt and revenue debt projects are the Sand Creek Residential Addition (storm, sewer, water, streets), Industrial Park sewer and water, and the Meridian Center construction. Tax revenues were not used for these projects.
Non-exempt general obligation debt projects that are paid for from property tax revenues include airport hangar and runway improvements, Athletic Park improvements, and the Sand Creek pedestrian/bike path.
Back in 2005, the city had between $10 to $20 million in general obligation debt. The city's debt level peaked in 2010 with about $50 million in debt and then declined slightly in 2011.
The city has another type of debt, known as non-general obligation debt, that is not primarily secured from tax revenues.
Non-general obligation revenue debt is typically for utilities; the repayment is pledged against the potential revenue of the utility. An example would be $1.2 million in water infrastructure improvements in 2000.
The city also has received loans from the Kansas Department of Health and Environment and the Kansas Department of Transportation. These low-interest loans are used to finance improvements. Between 1999 and 2009, the city received $17 million in loans from the two entities, with an outstanding balance of $10.9 million as of December 2012.
Finally, the city can issue debt through the Public Building Commission in order to construct buildings and facilities. Once the facilities are built, the commission leases them to the city, and the city pays a lease equal to the debt service payments. Some recent Public Building Commission projects include $2.6 million in 2004 for Fischer Field; $6.6 million in 2005 for Sand Creek Station Golf Course; and an additional $975,000 in 2006 for Sand Creek Station Golf Course.
Page 2 of 2 - Debt timeline
As of Dec. 31, 2012, the oldest debt the city of Newton is paying down dates back to 1999, for "Kansas Public Water Supply." If the city issues no new debt, all the debts on the list will be paid off by 2030.
The largest outstanding debt is for $12.6 million, issued in 2008 for airport/water/sewer. The bond will mature in 2028.