Governmental Debt Increases On Local Level
An ambitious bonding project for road construction and repairs in Palo Alto County helped triple the outstanding debt obligations for local government entities in Palo Alto County for fiscal year 2008. The total outstanding governmental debt for Palo Alto County and all governmental entities totaled nearly $30 million, according to figures released recently by Iowa State Treasurer Michael Fitzgerald. All political subdivisions, instrumentalities, and agencies of the state disclosed this information for the 2007 Outstanding Obligations Report.
“A majority of debt is issued to finance public building or schools, while much is issued for utilities or sewers. Although debt did increase in the last year, a large portion of the existing debt has been used to either build new schools or fix up the aging infrastructure,” according to Fitzgerald. “State and local governments report $10,945,367,532 in outstanding obligations as of June 30, 2008. This is $591,758,921 greater than the $10,353,608,611 reported for fiscal year 2007, for an increase of 5.72% in total outstanding obligations.”
When talking about debt, there are two ways the governmental entities can pay off those debts – general obligation bonds and revenue obligation bonds. General obligation bonds are generally repaid through property tax levies and general revenues. Revenue obligation bonds are repaid from money generated by a specific facility or project.
Looking at the statewide trends, Iowa’s cities report the greatest amount of outstanding obligations with $4,112,136,361 outstanding as of June 30, 2008. This is a 3.32% increase from the fiscal year ending June 30, 2007. Counties report $571,312,651 in outstanding obligations as of June 30, 2008, for an increase of 9.03% over the last year.
Palo Alto County issued some $11 million in bonds to embark on a secondary road program featuring the reconstruction and repairs to county roads, including reconstruction of County Roads N60 and B53.
School districts and area education agencies have a total of $2,195,023,634 in outstanding obligations as of June 30, 2008. This is $18,342,485 or .83% less than fiscal year 2007.
Community colleges report $424,711,642 in outstanding obligations as of June 30, 2008. This is $61,215,365 or 16.84% greater than fiscal year 2007.
In Palo Alto County, just three communities have no public debt obligations. Curlew, Cylinder and Rodman reported no outstanding obligations, while the city of Emmetsburg reported outstanding debt of $6.5 million. The community of Ayrshire reported an outstanding debt obligation of $17,500, while Mallard reported a debt of $786,500. The community of Ruthven reported debt obligation of $926,352 and the city of West Bend reported obligations of $2.4 million.
Overall, the communities in Palo Alto County reported outstanding debt totaling $10.8 for Fiscal year 2008.
Palo Alto County, as a governmental entity, reported outstanding debt obligations totaling $11.9 for fiscal year 2008. An independent non-profit agency, the Graettinger Municipal Light Plant, reported outstanding obligations totaling $150,000 for fiscal year 2008.
Of the four school districts located in the county, the Emmetsburg Community School District listed outstanding debt of $7.1 million, while the West Bend-Mallard, Graettinger and Ruthven-Ayrshire school districts reported no outstanding debt in the period. Iowa Lakes Community College reported total outstanding debt of $9.5 million and the Prairie Lakes Area Education Agency Eight reported obligations totaling $2.4 million. All told, educational agencies serving Palo Alto County reported $19.2 in obligations.
The complete report of governmental debt is available in its entirety on the Treasurer’s website at www.treasurer.state.ia.us.