FAQ Friday: How is the City Affording this Project? Will We Involve a Partner?
If our bonding capacity is $15 million dollars, how are we affording this project? Why not involve a private partner to shoulder some of this debt, especially for the non-parking elements in the development, like the transfer floor, office space, residential and retail?
The City’s total capital improvement bond capacity in 2017 is estimated to be about $35 million. Major credit ratings agencies such as S&P and Moody’s encourage municipalities to keep a reserve amount in capacity. Taking into consideration the prescriptions of the credit rating agencies and updates from our bond attorneys, a fiscally responsible target for the W. Troy project was to cap the bond amount at $20 million. The other important factor in determining the amount of bond issuance is the cash flow generated by the parking system and potential mixed-use components. The impact of positive growth on the value of the City’s tax base has resulted in an increase of our project bonding capacity.
On Fridays, the City of Ferndale and the Ferndale DDA answer common questions by residents and business owners. Have a question you’d like answered? Contact us at email@example.com.