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• December 26, 2009 6:10 PM Tona wrote:
  Dear Mr. Walker,
  I would like to know what you plan to do over the next four (4) years to reduce the enormous county debt. Do you realistically think the tax payers will be able to pay this debt in the next 20 years without large property tax increases?
  To freedom,
  Tona
  Reply to this
  1. December 28, 2009 2:13 PM Commissioner Walker wrote:
     Below you will find just a few things that I will be proposing.  As for the paying of the debt over the next 20 years without a large property tax increase, I suppose not, unless there is an attempt to refinance as has been the past practice.
     
     Please see the few items proposed below.
     
     

     Issuance of Debt

     1. The County will strive to issue bonds no more frequently than once in any fiscal year. The scheduling of bond sales and installment purchase decisions and the amount of bonds to be sold and installment financing to be sought will be determined each year by the County Commissioners. These decisions will be based upon the identified cash flow requirements for each project financed, market conditions, and other relevant factors. These factors will be ascertained from the school systems and County departments. If cash needs for bond projects are insignificant in any given year, the Board may choose not to issue bonds. Instead, the Board may fund up from project costs and reimburse these costs when bonds are sold. In these situations the Board will adopt Reimbursement Resolutions prior to the expenditure of project funds.
     2. The County will seek level or declining debt repayment schedules and will avoid issuing debt that provides for balloon principal payments reserved at the end of the term of the issue.
     3. The County will avoid over-reliance on variable rate debt. Variable rate debt will only be considered when market conditions favor this type of issuance. When variable rate debt is considered, careful analysis will be performed and techniques applied that will ensure that the County’s sound debt position will be maintained. At no time will variable rate debt exceed 20% of the County’s total outstanding debt.
     4. The County is required by Statute to issue general obligation debt through a competitive process. The competitive process will also be used for other debt issuance unless time factors, interest rates or other factors make it more favorable to the County to use a negotiated process.
     5. In the planning process for debt issuance the County will assess the need to maintain it’s "Bank Qualification" if installment purchase financing is being considered.

      

     Level of Debt

     • The County will strive to maintain its net bonded debt at a level not to exceed three percent of the assessed valuation of taxable property within the County.
     • The County will strive to maintain its annual debt service costs at a level no greater than fifteen percent of general fund revenues, including installment purchase debt.

      

     Undesignated Fund Balance

     • The County will strive to maintain undesignated balance in the general fund at a level sufficient to meet its budgeted goals, to be determined annually. The amount of undesignated fund balance maintained during each fiscal year should not be less than eight percent of budgeted general fund operating expenditures that fiscal year.
     • To the extent that undesignated fund balance exceeds the budgeted goals the balance in excess would be used to pay toward the balance of a outstanding debt of the County.
     While these are general ideas that have already been presented to the current administration and would be subject to the approval of the Commission as a whole atleast it would be a starting point.
     
     Respectfully,
     
     Mike
     
     
     Reply to this
     1. December 28, 2009 2:44 PM Tona wrote:
        Hi Mike,
        I am glad to see this information and do hope that you will stick with it, but it is not enough to resolve the issues facing this county. What you posted primarily deals with debt management along with the level of debt. What do you plan to do to get this County out of debt? How do you plan to pay this enormous debt off?
        
        Do you think it's fair to the future generations of Blount Co. to thrust this kind of debt onto them? This is an enormous debt, for children to pay in the future (as adults), for a high school diploma.
        
        BTW, I am not picking on your personally, but since you asked for questions, I will surely ask.
        
        To freedom,
        Tona
        Reply to this
        1. December 30, 2009 2:07 PM Commissioner Walker wrote:
           Tona,
           
           You are asking a question you and everyone else knows the answer to. 
           
           There is only one way to pay off debt, stop incurring more and focus on paying the debt one has off. 
           
           Will it be simple, easy or fair?  No. 
           
           However, unless a majority of the commission moves as a consolidated group it doesn't matter who has what plan it will not happen. 
           
           Let me turn the tables, how would you get the County out of the debt it is currently in?  Remember, you have to do it in a way to convince 10 other commissioners to see and agree with the points you are to present. 
           
           
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