CITY NOW LOOKING ABOVE HORIZON

'Build Our Future' plan unveiled

By TIM SINIARD
Posted 2/12/20

With continued growth on the horizon, the city of Cleveland will be developing a long-range strategic plan to tackle large-scale projects without raising taxes.

During the Cleveland City …

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CITY NOW LOOKING ABOVE HORIZON

'Build Our Future' plan unveiled

HEAVY TRAFFIC clogs the Paul Huff Parkway area regularly during the end of the work day in this file photo prior to the Thanksgiving holidays last year. Alleviating some of Cleveland's traffic issues has been named a priority by city leaders, and will be a part of the city's "Build Our Future" strategic plan study that will focus on the next 15 years.
HEAVY TRAFFIC clogs the Paul Huff Parkway area regularly during the end of the work day in this file photo prior to the Thanksgiving holidays last year. Alleviating some of Cleveland's traffic issues has been named a priority by city leaders, and will be a part of the city's "Build Our Future" strategic plan study that will focus on the next 15 years.
Banner file photo, DANIEL GUY
Posted

With continued growth on the horizon, the city of Cleveland will be developing a long-range strategic plan to tackle large-scale projects without raising taxes.

During the Cleveland City Council’s work session earlier this week, City Manager Joe Fivas introduced the city’s Build Our Future Initiative, which will provide a framework for major infrastructure projects over the next 15 years.

Fivas said the initiative is still in the planning stages.

“A lot of it is looking above the horizon, to try to figure out some of the needs of the community,” he said. “We've had some sessions internally with staff. We’ve also had a number of conversations with individual residents and are trying to determine how do we walk above the horizon and figure out what we need to do.”

Fivas said the city has been successful in making critical key investments regarding public safety, schools and the Cleveland Regional Jetport, for example.

Last year, the approximately $14-million Candy’s Creek Cherokee Elementary School was opened. The city also opened a new fire station, purchased four fire engines, and also constructed a new $500,000 fire tower.

However, as the city grows, there will be continued stresses on roads that will require large amounts of capital to fund.

“The question that we're trying to work with is how are we going to fund them, and in what priority are we going to fund them?” he said.

The key tenants for the initiative include:

• No tax increases for major infrastructure investments.

• Decreasing debt by 50%, while continuing investment in infrastructure improvements.

• Continue to shed city debt over the next 15 years.

Last year, the city generated more than $5 million in savings after it restructured some $56 million in taxpayer and utility-funded debt.

Prior to the restructuring, the city carried $44,051,938 fixed-rate debt, $37,832,000 in fixed-rate debt with upcoming rate resets, $12,200,000 in variable-rate debt with a rate reset, and $1,132,000 in variable-rate debt, totaling $95,215,938.

After the restructuring took place, the city had $62,306,938 in fixed-rate debt, $14,459,000 in fixed-rate debt with rate resets, $12,200,000 in variable-rate debt with rate resets, and $1,132,000 in variable-rate debt, totaling $90,097,938.

The restructuring generated $5,429,185 in savings.

In addition, 69% of the city’s debt consisted of fixed-rate bonds, ensuring the city’s policy of requiring that at least 50% of its debt was tied to fixed rates. As of the restructuring, just 47% of its debt consists of fixed-rate bonds.

Fivas said the council will later discuss creating a debt reduction and capital investment fund which will be used to provide funding for future projects. The fund would be essentially capitalized by future savings generated by debt reduction over the next 15 years.

For example, if the city needed to invest in a $10 million road project, it would be in a favorable financial position to tackle such projects needed in the future.

And such projects are on the minds of residents, who sometimes ask how the city will invest in infrastructure projects without raising taxes.

“Someone will ask, 'Well, how we going to fund [a project] and how do we know it fits into our budget in the future?'" Fivas said. “How do we get $5 million to fix this or $10 million to fix that?"

Cleveland already enjoys some of the lowest property tax rates among Tennessee cities with K-12 schools, with combined city and county property taxes totaling $3.84 per $100 of assessed value, followed by Johnson City's $4.27, Kingsport's $4.51, Bristol's $4.71, Maryville's $4.74, Tullahoma's  $5.01, Dyersburg's $5.02, Oak Ridge's $5.13, and Collierville's $5.88.

The mean for nine cities is $4.79.

Fivas said large transportation projects can take five to 10 years just to get off the ground.

As a result, Fivas said design planning, as well as financing, are integral to being proactive regarding transportation-related issues the city envisions will be needed in  the future.

“So, we're trying to look at what those solutions are and have the funding in place and give the council and the community assurance that that we can afford to do this while keeping taxes low and keep  continuing to decrease our debt,” he said.

Fivas said further discussion of the initiative will take place during the next several city council meetings, with city staff and the council developing a draft BOF Initiative project plan over the next several months, followed by a validation and test draft of the BOF project plan through community meetings and surveys in the spring. 

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