It’s 337 pages and we’ll dig into portions of it today.
For instance, on page 139 we get the Combining Balance Sheet for Nonmajor Governmental Debt Service Funds.
What is a debt service fund?
It’s a cash “reserve established to service interest and principal payments on short- and long-term debt.” Sometimes they’re also called sinking funds.
In that section of the CAFR we learn of Missoula’s long-term bonding debt.
Get ready – it takes up nearly 20 pages and looks like this:
- SID Revolving Fund: $607,500
- 1998 Public Safety Go Bonds: $42
- 1996 Open Space Go Bonds: $81
- 1997 Open Space Go Bonds: $20
- 1994 Fire Equipment/City Halls Remodel: $61
- 1993 Fire Station Go Bond: $48
- Series 2012A Aquatics Refunding Bond: $32,900
- Series 2013A Go Refunding Bond: $60,100
- 2004 Refunding Bonds Debt Service: $862
- New Fire Station Go Bond: $123,700
- 2007 Refunding Bonds: $25,600
- Sidewalk & Curb Warrants Fund: $6,500
- FY99 Sidewalk & Curb Debt Service Fund: $18,900
- FY00 Sidewalk & Curb Debt Service Fund: $6,500
- Judgment Levies: $773
- FY04 Sidewalk Curb Debt Service Fund: $1,100
- SID 433 Debt Service Fund: $660
- FY05 Sidewalk & Curb Fund: $84,000
- FY06 Sidewalk and Curb Fund: $163,100
- FY07 Sidewalk and Curb Fund: $276,200
- Series 2008A Sidewalk and Curb Fund: $180,800
- Series 2009 Sidewalk and Curb Fund: $353,000
- Series 2010 Sidewalk and Curb Fund: $417,900
- FY12 S/C Debt Service Fund: $571,600
- FY13 Sidewalk/Curb Debt: $307,200
- FY15 Sidewalk/Curb Debt: $548,400
- SID 498 Debt Service Fund: $618
- SID 501 Debt Service Fund: $139
- SID 510 Debt Service Fund: $118,000
- SID 511 Debt Service Fund: $700
- SID 512 Debt Service Fund: $240,400
- SID 517 Debt Service Fund: $875
- SID 520 Debt Service Fund: $560,000
- SID 521 Debt Service Fund: $1,100
- SID 524 Debt Service Fund: $1,969,000
- SID 525 Debt Service Fund: $342,000
- SID 526 Debt Service Fund: $718,000
- SID 532 Debt Service Fund: $226,000
- Gilbert St Sewer SID Debt Fund: $107,000
- Lincolnwood Sewer Phase I Debt: $160,000
- Slant Street Traffic Calming Fund: $103
- Lincolnwood Sewer Phase II: $264,000
- South 4th Street W Traffic Debt: $75
- SID 540 Debt Service Fund: $1,023,000
- SID 541 Debt Service Fund: $552,000
- SID 543 Debt Service Fund: $16,000
- SID 544 Rattlesnake Debt: $1,564,000
- SID 545 Debt Service Fund: $7,000
- SID 546 Debt Service Fund: $6,000
- SID 548-5th, 6th & Arthur Debt: $955,000
All told, those 50 debt service funds total $12.6 million.
Remember, a lot of that money is going to interest. Such is the nature of debt.
I wouldn’t be surprised if most of those funds only hold enough to pay the interest, with the principle just sitting there collecting dust.
I just wouldn’t be surprised, knowing how dysfunctional our city government is.
A year ago tommorrow I told you that the City of Missoula was $88 million in debt, and that was before we ‘paid’ $90 million for the water company.
So that’s nearly $200 million…but hold on.
We didn’t bond for $90 million when it comes to the water company.
We actually bonded for $140 million…$50 million more than we needed.
According to Mayor Engen, in case anything “spectacularly wrong” happened, and they needed the money.
Don’t expect that money to be returned, either.
So there’s $88 million plus $140 million plus that $12 million we just counted there…giving us $240 million in debt.
A quarter of a billion dollars of debt for a city with 71,000 people and a median income of $43,000.
That comes out to $3,380 of debt that every Missoulian would be responsible for if they had to pay it off themselves.
And what’s the city’s rationale for all this debt?
Mainly to fight off stagnation.
“When a city stagnates,” a 2012 article called How much debt should a city risk? told us, “the costs of running a city are spread across a shrinking tax base, which can send a city’s employers looking elsewhere to invest. Children and grandchildren grow up and leave because there aren’t any jobs left.”
We know from a Hill report in March that American city governments currently have $1.2 trillion in debt, and that’s expected to go up to $1.75 trillion by the end of the year.
The Hill article blames underfunded pensions as the main source of this debt.
That's an article for another day.
They also mention the fact that “municipal systems more easily default on debt and face downgrades from credit rating agencies – which makes borrowing more expensive for them.”
We saw a bit of this issue crop up when the City of Missoula had problems securing short-term bonds for the water purchase.
And let’s not forget a very simple concept, either – the more debt you have, the less you have to spend on other things.
Missoula gets over that problem by simply taking on more debt.
It’s a symptom of one-party control of the city’s government…despite the charade that elections are non-partisan.
We just don’t have the checks and balances like we used to, with our legislative branch (the City Council) challenging the executive (the mayor).
And so we get the situation we have today.
$250 million in debt and no end in sight.