City Debt

About City Debt
Cities issue debt for a variety of purposes and projects.  A city may issue debt as a general obligation of the city or secured by a specific revenue source.  City debt normally is then repaid over a number of years.  
                
On this page the City of Coralville’s debt is categorized in two basic ways:
  • Purpose: What the debt was issued to finance
  • Repayment source: What type of funds will repay the debt
Purpose
The graph characterizes the currently outstanding debt of the City by the type of expenditure financed by its issuance.
Debt purpose pie chart 2-12-19
Debt Repayment

Source


When debt is issued, a source is designated for repayment.  The sources available to cities include, but are not necessarily limited to:
  • PILOT (Payments in Lieu of Taxes)
  • Property taxes
  • Tax Increment Financing (TIF) revenues
  • Utility revenues (e.g., revenues from a water or wastewater enterprise fund, parking, etc.)
For any city debt issued a source of repayment is designated at the time of issuance.  That provides the security that investors require and facilitates the analysis that investors and the credit rating agencies do to evaluate the plan in place for repayment of the debt.

Speed of Repayment


The speed of repayment of debt is based upon a number of factors, including:
  • Type of project financed
  • Useful economic life of the project financed
  • Fund source available for repayment
  • Prevailing interest rates at the time of borrowing
  • Repayment pattern of already existing debt

Balance


The following chart shows the projected outstanding principal balance of existing direct City debt, its intended source of repayment, and the percentage of principal repaid at key points in the future.

Chart updated October 31, 2019

Chart of principal balance of Coralville debt. 2020 $340 millon with 98% repaid by 2039

Credit Rating

Management


In 2013, the City of Coralville engaged Springsted, Incorporated, a public sector advisory firm, to advise the City in credit rating agency management strategies. The work of Springsted, Inc., includes recommendations for adoption and implementation of policies and procedures and improved communication with credit rating agencies such as Moody’s Corporation and Standard and Poor’s Financial Services.

Additional Information