Westerville's bond limit
City may refinance debt to avoid credit pinch
Westerville will come close to its bond limit under state law in 2018, and city officials said they would like to find ways to lessen that pinch.
City Manager Dave Collinsworth discussed the credit crunch with City Council during a Jan. 29 work session.
Three limits govern how much the city can issue in bonds, Collinsworth said.
* Council policy dictates that the city does not issue more than 40 percent of its general capital improvement fund reserves in debt;
* The Ohio Revised Code states that the city cannot issue more than 10.5 percent of its assessed property value in debt; and
* Under the Ohio Constitution, the total debt issued by all overlapping jurisdictions can not exceed 10 mills, Collinsworth explained.
In 2018, the total combined millage will be 9.3 mills in Delaware County and 9.4 mills in Franklin County, Collinsworth said.
"We have the potential that our general government needs could be negatively impacted if we don't do anything differently in regards to our utility needs," Collinsworth said.
To avoid that, Collinsworth said the city will look to pay for more projects from the Electrical Division in cash and complete projects for the water and electric divisions with Ohio Water Development Authority, EPA or Ohio Public Works Commission loans.
The city also could issue debt for Electric Division projects using revenue bonds, a type of bond the city never has used before, Collinsworth said.
The best way to lessen the pending crunch, Collinsworth said, would be to refinance $13.9 million in existing debt.
"We can free up substantial capacity as part of that," he said.
If those measures were taken, the city could undertake all of the capital-improvement projects planned over the next five years and still would have $750,000 remaining toward the debt limit, Collinsworth said.
The city again will have ample room toward the 10-mill debt ceiling after 2018, when the debt that helped finance the Community Center will be paid off.
The overlapping debt for all of the jurisdictions in Westerville in 2019 will drop down to 5.9 mills, Collins-worth said.
"Obviously it's something to be watchful of and concerned with, but we do have management strategies to effectively be able to deal with that," Collinsworth said.